Ravel Singh v. Allstate Insurance Company of Canada et al., 2001 ONFSCDRS 74

Neutral Citation: 2001 ONFSCDRS 74

FSCO A97-000710

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

RAVEL SINGH

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

and

WELLINGTON INSURANCE COMPANY (Now ING Halifax Insurance Company)

Insurer

DECISION ON EXPENSES

Before:

Nancy Makepeace

Heard:

Telephone conference call on March 30, 2001.

Written submissions were received by April 24, 2001.

Appearances:

Kevin Doan for Mr. Singh

Thomas H. Clemenhagen for Allstate Insurance Company of Canada

Mark Wilson for Wellington Insurance Company

Issues:

The Applicant, Ravel Singh, was injured in a motor vehicle accident on April 21, 1995. In a decision dated January 6, 1999, I dealt with his claims for statutory accident benefits under the Schedule.¹ I made the following orders, while reserving on the issue of expenses:

1. The Applicant's application for further weekly benefits, medical and rehabilitation benefits and a special award is dismissed.

2. The Insurers shall reimburse the Applicant for his arbitration expenses incurred. Allstate may deduct the net amount of collateral disability benefits of $3,750 (gross) from its share of the expenses owing. I may be spoken to if the parties are unable to agree on the amount owing.

Mr. Singh appealed my decision. In a decision dated March 17, 2000,² Director's Delegate Draper made the following orders:

1. The appeal is dismissed and the arbitration order dated January 6, 1999 is confirmed.

2. Ravel Singh will pay the appeal expenses of Allstate Insurance Company of Canada and Wellington Insurance Company (now Halifax Insurance Company) fixed at $500, all inclusive, for each insurer.

The issue in this further hearing is:

1. To what amount is Mr. Singh entitled for reimbursement of his arbitration expenses from Allstate and Wellington?

Result:

1. Allstate shall pay Mr. Singh $3,569.45, and Wellington shall pay him $6,381.95, forthwith.

EVIDENCE AND ANALYSIS:

The Expenses Assessment Process:

Expenses Assessment Pending Appeal:

On April 23, 1999, Mr. Doan submitted Mr. Singh's expenses claim to the Insurers. Mr. Wilson responded on Wellington's behalf on May 18, 1999, stating that Wellington would not consider the expenses claim pending the outcome of the appeal. During the expenses assessment hearing, Mr. Clemenhagen took the same position on Allstate's behalf, arguing that notice of appeal automatically stays the order appealed. That is the normal rule in the courts, although the rule does not normally affect costs assessments.³ The Rules of Civil Procedure do not apply to arbitration and appeal proceedings,⁴ which are governed by the Statutory Powers Procedure Act ("SPPA”) and the Insurance Act and regulations made under it. Subsection 283(6) of the Insurance Act states:

An appeal does not stay the order of the arbitrator unless the Director decides otherwise.

This principle is also set out in Rule 46.3 of the Dispute Resolution Practice Code - Third Edition, April 15, 1997 ("the Code”), made under section 21 of the Insurance Act and section 25.1 of the SPPA. The criteria for granting a stay were recently reviewed by Director's Delegate McMahon in Guardian Insurance Company of Canada and Armstrong.⁵ They are the bona fides of the appeal, the merits of the appeal, and the hardship to the respective parties if the stay is granted or refused.

The Director's Delegate did not order a stay of my expenses order in this case. Indeed, it would have been odd if the Insurers had moved for a stay, because the appeal was brought by Mr. Singh. The Insurers did not cross-appeal the expenses order. The Delegate's decision, dated March 17, 2000, does not address arbitration expenses except to say that "Mr. Singh was awarded his arbitration expenses despite his lack of success." The Delegate's order that Mr. Singh pay the Insurers' appeal expenses reflects his unfavourable assessment of the merits of Mr. Singh's appeal. However, because the Commission takes a different approach to appeal and arbitration expenses,⁶ the Delegate's findings with respect to appeal expenses do not necessarily indicate any disapproval of my order for arbitration expenses. Nor does the Delegate's decision to order a set-off of appeal expenses against arbitration expenses provide retrospective rationale for the Insurers' non-compliance with my order. If the Insurers wanted to challenge my expenses order, they should have moved for a stay of that order. In the absence of a stay, my expenses order was binding and enforceable pursuant to section 19 of the SPPA, subject to resolution of the assessment dispute in accordance with the Code.⁷

Exchange of Documents prior to Expenses Assessment:

The Commission's procedure for resolving expenses assessment disputes is described in Rule 77 of the Code as follows.

77.1 Where expenses are awarded, and the parties cannot agree on the amounts to be paid, a party may request an assessment of expenses, as follows:

(a) within 30 days from the date of the decision awarding expenses, the party awarded expenses must provide the other party with an account describing each of the expenses claimed, services received and the costs;

(b) the party paying expenses must promptly provide the other party with a written response to the account, identifying the items in dispute and the reasons for the dispute;

(c) the party awarded expenses must promptly provide the other party with copies of supporting documentation, such as invoices, receipts, computerized dockets or cancelled cheques;

(d) if a dispute remains, the parties shall file the above materials, together with a written request for an assessment of expenses;

(e) the Commission shall notify the parties whether the assessment will be conducted by way of written submissions, an oral or electronic hearing, and shall notify the parties of the date, time and if necessary, the location of the assessment hearing;

(f) neither party shall be charged a fee for an assessment of expenses.

In this case, the parties did not comply with FSCO practice. They exchanged correspondence about arbitration expenses after the release of the appeal decision, but it appears that the Insurers never identified areas of agreement and dispute, as required by paragraph 77.1(b), and Mr. Singh did not provide documentation in support of disputed items, as required by paragraph 77.1(c), until after the expenses assessment hearing. The expenses assessment was prolonged because of the need to give the parties additional time to comply with these requirements.

The Assessment:

Legal Fees:

The Insurers agreed to Mr. Doan's bill for $2,144 for hearing attendance (4 days or 32 hours at $67 an hour), but disputed his claim for 96 hours of hearing preparation.

Mr. Doan submitted that a 3:1 ratio of preparation to hearing attendance was appropriate, considering that Mr. Singh was involved in two accidents involving two insurers and two benefit schemes, Mr. Singh does not speak English, and the dispute concerned a lengthy period of time (the first accident occurred in 1993). He also pointed out that this was a post-156 week claim and that he raised an issue concerning the termination process, which necessitated research about section 64 of the Schedule. However, he admitted that he had not kept "detailed dockets" of his time. Allstate questioned whether Mr. Doan had actually spent 96 hours preparing for the hearing. On behalf of Wellington, Mr. Wilson pointed out that the interpreter's invoices indicate Mr. Doan spent 15 hours interviewing Mr. Singh, and argued that allowing a further 17 hours for the remaining hearing preparation was a reasonable estimate. This would result in a 1:1 ratio of hearing preparation to hearing attendance, which the Insurers submit is more appropriate.

In Henri and Allstate,⁸ I reaffirmed the Commission's longstanding approach to assessing arbitration expenses in stating that "[t]he overriding consideration in fixing arbitration expenses is reasonableness"⁹ and that "[a] line-by-line assessment of the expenses claimed is not appropriate. Rather, the Arbitrator should make a global assessment of reasonable expenses."¹⁰

I concluded that assessing preparation time on a ratio with hearing attendance may provide a reasonable basis for estimating reasonable preparation time. Arbitration decisions have generally followed this approach, awarding from one to four hours of preparation time for every hour of hearing attendance, depending on the complexity of the issues in the case, the volume of documentary evidence, the number of witnesses, and any other factors bearing on reasonable preparation time. However, in appropriate cases, arbitrators have allowed preparation time based on dockets showing the actual time spent, especially where additional preparation time resulted in a more cost-effective hearing.¹¹ I have no basis for making such a finding in this case. Use of a ratio is intended to preclude the need to conduct a time-consuming examination of detailed dockets. Nevertheless, an expenses award is intended to reimburse a party for "expenses incurred' by the insured person, and the party claiming expenses bears the onus of proving the expenses claimed. If detailed dockets are not available, less detailed records accounting for time may be sufficient in some cases.

This hearing lasted four days. Mr. Singh called five other witnesses, and the Insurers called four. There was a moderate amount of documentary evidence. The claim involved two insurers and two accidents under different benefits schemes. This raised legal issues about Wellington's responsibility in respect of the second accident. Also, Mr. Singh claimed post-156 week benefits, which requires consideration of vocational suitability as well as disability. In the absence of any documentation as to the time spent to prepare for the hearing, I am prepared to allow 1.5 hours of preparation time for each hour of hearing attendance, for a total of 48 hours. The allowable expense is $3,216.

Allstate submitted that the one hour Mr. Doan claimed for review of the arbitration decision goes to Mr. Singh's appeal expenses, which were denied. The Expenses Schedule allows for payment of a party's legal fees for services before, during and after an arbitration hearing.¹² Regardless of appeal considerations, I accept that Mr. Doan needed some time to review my 36-page decision in order to explain the adverse result to his client. The amount claimed is reasonable and will be allowed.

An expenses assessment is a "hearing" under the Insurance Act, and legal fees relating to an expenses assessment are allowable. Mr. Doan claimed three hours. I find this excessive, considering that few original documents were provided and much of the required preparation work was clerical. However, the Insurers' failure to respond to Mr. Singh's initial bill of costs necessitated more work on Mr. Doan's part. The teleconference lasted an hour and 15 minutes. I am prepared to allow a further 45 minutes for correspondence and preparation of documents before and after the teleconference, for a total of two hours.

To summarize, I allow legal fees for 83 hours at $67 per hour. The allowable amount is $5,561, plus GST of $389.27, for a total of $5,950.27.

Disbursements:

Conduct Money:

The Insurers disputed Mr. Singh's claim for conduct money for his wife and for Dr. Bateman. Both were subpoenaed and testified at the hearing. Subsections 5(1) and (2) of the Expenses Schedule allow for an attendance allowance to the maximum allowed under Rule 58.05 of the Rules of Civil Procedure. Although a friendly witness need not be subpoenaed, counsel often take this precaution. The Insurers provided no authority for the proposition that an attendance allowance cannot be paid to a friendly witness. These items are allowed.

Dr. S.S. Sira:

Mr. Singh claimed $750 for Dr. Sira's attendance at the hearing. Dr. Sira testified for two hours, and Mr. Doan explained that he spent an hour preparing Dr. Sira before the hearing. Dr. Sira billed at the rate of $250 per hour. The Expenses Schedule allows a maximum for $200 per hour, to a maximum of $1,600 per day, for attendance of an expert witness.¹³ Dr. Sira is entitled to $400 for attending the hearing. An expert's hearing preparation time may be compensated to a maximum of $500.¹⁴ I heard no submissions on the appropriate amount in this case. Although an hour's preparation for two hours of testimony seems generous, it is not unreasonable. A further $200 will be awarded for Dr. Sira's preparation time, for a total of $600.

The Insurers questioned whether Dr. Sira's report of August 14, 1996 was an eligible medical-legal report, since it was prepared almost two years before the hearing. Mr. Doan explained that it was prepared immediately after the failed mediation in this matter, and it was important for deciding whether to proceed to arbitration. The report is six full pages long, and provides a comprehensive history of Dr. Sira's treatment of Mr. Singh. I found it helpful, and I am satisfied it was necessary for the conduct of the hearing. The maximum allowable for an expert's report is $1,500. I find Dr. Sira's invoice of $760 reasonable. This amount is allowed.

Dr. B.S. Sehmi:

The Insurers did not contest the amounts claimed for preparation of Dr. Sehmi's reports, but questioned the $1,128 billed for hearing attendance and related travel expenses. Dr. Sehmi's invoice indicates he attended between 9:00 and 12:00 on the morning of April 22, 1998. My notes confirm that he testified between 10:00 and 12 noon. Mr. Doan advised that he prepared Dr. Sehmi between 9:00 a.m. and 10:00 a.m. As with Dr. Sira, I find the preparation time reasonable, if a little generous. Mr. Singh is entitled to $400 for Dr. Sehmi's attendance and a further $200 for preparation, for a total of $600.

Dr. Sehmi invoiced Mr. Singh for a parking fee of $12 and travel allowance of $66. A note on the invoice indicates that the round-trip between Dr. Sehmi's home and the FSCO hearing rooms is 66 km. I allow a travel allowance of 30 cents per kilometre, for a total of $19.80, as well as the parking expense. The total payable to Dr. Sehmi is $631.20.

Dr. James E. Bateman:

After assessing Mr. Singh on March 30, 1998, Dr. Bateman prepared two eight-page reports, one for each accident. I was offered no explanation for Dr. Bateman's decision to produce two overlapping reports, and I treat the two reports as one. The reports were comprehensive, but I did not rely on Dr. Bateman's evidence because I found it partisan. I allow $800 as a reasonable expense for the two reports.

Dr. Vlasta Hajek:

Mr. Singh claims $1,050 for a report by Dr. Hajek, a physiatrist, dated March 20, 1998. The report was not introduced in evidence at the hearing, and it was not produced to the Insurers until shortly before the expenses assessment hearing. Dr. Hajek concluded that Mr. Singh "has been probably substantially unable to perform the essential tasks of his previous occupation until present time. However, I believe that with appropriate support, Mr. Singh should now be able to re-enter the work force." The general tenor of the report does not provide strong support for Mr. Singh's case.

The Insurers submit that a party cannot claim costs of a report that was "buried." I agree. Paragraph 5(1)3 of the Expenses Schedule allows for payment for "a report prepared by an expert, provided to the other parties to the arbitration or hearing and necessary for the conduct of the arbitration or hearing . . .".¹⁵ This item is denied.

Rehabilitation Network Canada:

Mr. Singh claimed $1,200 for a functional abilities evaluation and $1,050 for a work site analysis, as well as $600 for travel time and $66.50 for mileage relating to the work site analysis. The Insurers submitted that the claim is excessive, and questioned whether the reports were requested in connection with the arbitration, since no one from Rehabilitation Network testified at the hearing. The Insurers also argued the reports were duplicitous, as Allstate already had reports prepared by TOTA and Vocational Pathways.

I find that it was reasonable for Mr. Singh to commission the Rehabilitation Network reports in response to the Insurers' reliance on reports by TOTA and Vocational Pathways. Mr. Singh's decision not to call Ms. Wong, the occupational therapist who prepared the reports, has no bearing on my assessment of the expenses claim, because FSCO encourages parties to rely on filed expert reports in order to facilitate the most cost-effective hearing process, and the Insurers did not require Ms. Wong's presence for cross-examination. Although the report, prepared on April 3, 1998, was not received by the Insurers until April 13, 1998, only seven days before the first day of the hearing, I am not persuaded this should affect the expenses assessment in this case.

Ms. Wong met with Mary Christie, Mr. Singh's supervisor, to prepare a job analysis and obtain information about Mr. Singh's employment status and opportunities for return to modified work. Her five-page report was accompanied by colour photographs illustrating the manufacturing process. She also helped Ms. Christie prepare a Job Capability Analysis, a chart categorizing the job demands in terms of strength requirements, frequency of demand, and whether the task is essential. The report, photographs and chart provided detailed and impartial evidence, which I accepted, about Mr. Singh's pre-accident job. I find that the report was necessary for the conduct of the hearing and that the claim for $1,050 for its preparation is reasonable.

The offices of Rehabilitation Network are in Scarborough, and AluminArt is located in Brampton. The Expenses Schedule does not provide for reimbursement for an expert's travel time.¹⁶ Although there is no specific provision for a travel allowance relating to conducting an assessment, I am prepared to award a travel allowance of 30 cents per kilometre for 190 km., totalling $57, under subsection 5(5).

Ms. Wong performed a Functional Abilities Evaluation between 10:00 a.m. and 1:30 p.m. on April 8, 1998. The assessment included an interview and physical assessment. The ten-page report was detailed and comprehensive, and I accepted Ms. Wong's conclusion that Mr. Singh could not return to his pre-accident job unless modifications were made. An interpreter was present, but Rehabilitation Network did not invoice this amount separately, so it is not possible to know what part of the $1,200 billed for the FAE went to the interpreter. In any event, as the report was necessary for the conduct of the hearing, and the amount billed is reasonable, it will be allowed.

Other:

The Insurers agreed to pay for the arbitration filing fee, Dr. Sood's report, the Peel Memorial Hospital Records, the Health Recovery Clinic records, Dr. McDonald's notes and records and report, and photocopy fees charged by Mr. Clemenhagen's firm.

Interpreters:

Mr. Singh claimed $735 for an interpreter's services at his lawyer's office and at the offices of Dr. Bateman and Dr. Hajek. The Insurers disputed only the invoice with respect to the attendance on Dr. Hajek. I agree that this part of the claim fails given my ruling that Dr. Hajek's account is not recoverable. The remaining interpreters' fees are allowed as an out-of-pocket expense under section 4.4 of the Expenses Schedule.

Quick Law Research:

Mr. Doan claimed $304.41 for Quick Law research on behalf of his client. Quick Law invoices produced after the teleconference confirm that this amount was incurred on Mr. Singh's behalf. I find it a reasonable amount, considering the issues in this case, and it will be allowed.

Photocopies:

Mr. Doan claimed $515.36 for photocopying the Applicant's Brief. The Insurers agreed to pay this amount if invoices were provided. After the teleconference, four invoices were provided totalling $420.74, inclusive of PST and GST. Another invoice was identified in the amount of $110.70, bringing the total to $531.44. No details were provided relating to the missing invoice, apart from an invoice number. A party claiming reimbursement for arbitration expenses is expected to be able to produce invoices or dockets for disputed items. A total of $420.74 is allowed.

Fax Services and Postage:

No invoices were provided for these services, which were likely provided by Mr. Doan's firm. However, as they totalled only $16, a reasonable amount, they will be allowed.

Courier Services:

This is reasonable and will be allowed.

Assessment Brief:

Mr. Doan claimed $20 for photocopying this brief at his firm's office, plus $21 (plus GST of $1.47) for couriering the brief. This is allowed.

For convenience, the following chart shows the expenses claimed and allowed.

EXPENSES CLAIMED AND ALLOWED

Legal Fees

Amount Claimed

Amount Allowed

Hearing Attendance: 4 days (32 hours) @ $67/hour

$2,144.00

$2,144.00

Hearing Preparation: 96 hours @ $67/hour

$6,432.00

$3,216.00

Reviewing Arbitration Decision: 1 hour @ $67/hour

$ 67.00

$ 67.00

Expenses Assessment: 3 hours @ $67/hour

$ 201.00

$ 134.00

Legal Fees: Subtotal

$8,844.00

$5,561.00

GST @ 7%

$ 619.08

$ 389.27

Legal Fees: Total

$9,463.08

$5,950.27

Disbursements:

1. Arbitration Filing Fee

$ 100.00

$ 100.00

2. Conduct money: $53.00 x 8

$ 424.00

$ 424.00

a. Marlene Buckley b. Advance Tech Rehab c. Helen Wong d. Mary Christie e. Dr. Bateman f. Lakhwinder Kaur g. Dr. Sira h. Mike Tolan

3. Dr. S. Sira: a. Report, August 14, 1996: $760 b. Attendance: $750

$1510.00

$1,360.00

4. Dr. B. Sehmi a. Report, December 18, 1996: $200 b. Report, October 21, 1997: $150 c. Reviewing chart: $150 d. Attendance and Travel: $1,128.

$1,628.00

$1,131.80

5. Dr. J. Bateman Two reports dated March 30, 1998

$1,680.00

$ 800.00

6. Dr. V. Hajek Report, March 20, 1998

$1,050.00

Not allowed

7. Dr. Sood Report, August 11, 1997

$ 100.00

$ 100.00

8. Peel Memorial Hospital: Records

$ 120.00

$ 120.00

9. Health Recovery Clinics

$ 113.50

$ 113.50

10. Rehabilitation Network Canada: FAE and Worksite Analysis

$3,120.66

$ 2,307.00

11. Dr. Glen A. McDonald a. Clinical Notes and Records: $25. b. Report: $125.

$ 150.00

$ 150.00

12. Paid to Mr. Clemenhagen's firm

$ 64.69

$ 64.69

13. Translation Services: 18 hours @ $35/hour

$ 735.00

$ 630.00

a. Dr. Bateman, April 3, 1998, 3 hours b. Mr. Carranza's office, April 14, 1998, 4 hours c. Mr. Carranza's office, April 15, 1998, 4 hours d. Mr. Carranza's office, April 17, 1998, 4 hours e. Dr. Hajek, March 20, 1998, 3 hours

14. Quick Law Research

$ 304.41

$ 304.41

15. Photocopies

$515.36 / $531.44

$ 420.74

16. Fax services

$ 8.00

$ 8.00

17. Postage

$ 8.00

$ 8.00

18. Courier

$113.75

$ 113.75

19. Photocopies ($20) and courier ($27) for assessment brief

$ 47.00

$ 47.00

Disbursements Subtotal:

$11,792.37

$ 8,202.89

Legal Fees Subtotal:

$ 9,463.08

$ 5,561.00

Total

$21,255.45

$13,763.89

Calculation of the Amount Owing

I find no reason to depart from a 50/50 split between the Insurers with respect to arbitration expenses, since both were active participants in the hearing and each raised separate defences to which Mr. Singh was obliged to respond. Accordingly, the starting position is that each Insurer is responsible for $6,881.95, which is half the total assessed expenses.

The parties agreed that Allstate is entitled to a set-off for collateral benefits I found were available to Mr. Singh. However, I was unable to calculate the net amount for set-off purposes based on the evidence I received at the arbitration hearing. Singh and Allstate now agree that the appropriate amount is $2, 812.50. After set-off, the amount owing from Allstate is $4,069.45.

Pursuant to the appeal decision, both Insurers are entitled to a set-off of their appeal expenses, fixed at $500 each. Accordingly, Allstate shall pay $3,569.45 and Wellington shall pay $6,381.95.

May 18, 2001

Nancy Makepeace Arbitrator

Date

Neutral Citation: 2001 ONFSCDRS 74

FSCO A97-000710

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

RAVEL SINGH

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Allstate shall pay Mr. Singh $3,569.45, and Wellington shall pay him $6,381.95, forthwith.

May 18, 2001

Nancy Makepeace Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule —Accidents after December 31, 1993 and before November 1, 1996, Ontario Regulation 776/93, as amended by Ontario Regulations 635/94, 781/94, 463/96 and 304/98.
2. 2(FSCO Appeal P99-00008).
3. 3Rules 63.01 and 63.03(2) of the Rules of Civil Procedure.
4. 4Rule 1.02.
5. 5(FSCO Appeal P00-00037, July 20, 2000).
6. 6Dominion of Canada General Insurance Company and Guzman (OIC Appeal P-007209, January 18, 1996).
7. 7See Halifax Insurance Company and Reith (FSCO Appeal Order P98-00037, July 16, 1999).
8. 8(OIC A-007954, August 8, 1997)
9. 9See also Ahmadi-Nadoushan and Allstate Insurance Company of Canada (OIC A-008488, May 14, 1996), Lunn and State Farm Mutual Automobile Insurance Company (OIC A-013960, March 15, 1996), and Milevski and State Farm Mutual Automobile Insurance Company (OIC A-010292, February 7, 1997).
10. 10Lunn and State Farm Mutual Automobile Insurance Company (OIC A-013960, March 15, 1996).
11. 11Argirovski and Allstate (FSCO A98-000816, December 7, 2000).
12. 12The Expenses Schedule is a schedule of Ontario Regulation 664, R.R.O. 1990, as amended by Ontario Regulation 464/96 made under the Insurance Act. It is appended to the Code.
13. 13Subsection 5(3).
14. 14Subsection 5(4).
15. 15This is consistent with Paragraph 26 of Tariff A under the Rules of Civil Procedure, R.R.O 1990, Regulation 194, as amended, made under the Courts of Justice Act, R.S.O. 1990, chap. C.43.
16. 16Donohue and State Farm Mutual Automobile Insurance Company (OIC A-006756, February 7, 1995).