Neutral Citation: 2001 ONFSCDRS 92

FSCO A98-001087

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

BAKO JOHNSON

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

DECISION ON EXPENSES

Before:

Fred Sampliner

Heard:

By telephone conference call on March 23, 2001.

Appearances:

Thomas Wolf Zwiebel for Mr. Johnson

Todd J. McCarthy for Allstate Insurance Company of Canada

Issues:

The Applicant, Bako Johnson, was injured in a motor vehicle accident on July 15, 1997. In a decision dated April 27, 2000, 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:

Allstate shall pay $2,030 for Mr. Johnson's rehabilitation treatment plus interest under section 46 of the Schedule.
Mr. Johnson's claims for income replacement benefits, other rehabilitation benefits, housekeeping and transportation expenses are dismissed.

The issue in this further hearing is:

Is Mr. Johnson entitled his expenses of this arbitration proceeding?
What is the hourly rate for the party's counsel?
Is Allstate entitled to its expenses of this arbitration proceeding?

Result:

Mr. Johnson is entitled to 20% of his arbitration expenses.
Mr. Johnson is entitled to $73.38 per hour for his counsel's time in this arbitration proceeding.
Allstate is not entitled to its arbitration expenses.

EVIDENCE AND ANALYSIS:

The parties' expenses of the arbitration process are decided in accordance with the criteria in Ontario Regulation 464/96.²

(2) An arbitrator may award expenses to an insurer or insured person under section 282(11) of the Act if the arbitrator is satisfied that the award is justified, having regard to the following criteria:
Each party's degree of success in the outcome of the proceeding.
Conduct of the insurer or the insured person that tended to shorten or facilitate the proceeding or that tended to prolong, obstruct or hinder the proceeding, including failure to comply with undertakings or orders.
Whether the proceeding or any position taken by the insurer or the insured person during the proceeding was manifestly unfounded, frivolous, vexatious, fraudulent or an abuse of process.
The degree of complexity, novelty or significance of the factual or legal issues raised in the proceeding.
If the insurer or the insured person requests, any written offers to settle made after the conclusion of mediation and before the conclusion of the arbitration in accordance with the rules of practice and procedure applicable to the proceeding, including the terms of the offers, the timing of the offers and the responses to the offers, having regard to the result of the proceeding.
Any other matter related to the proceeding that the arbitrator considers relevant to the issue of whether an award of expenses is justified.

The issues in this case involved relatively straightforward facts. I find there were no complex legal or factual issues.

The Commission's file correspondence between the parties indicates that both cooperated to gather necessary information for the hearing. They each prepared for and presented the evidence at the hearing in an efficient and effective manner.

The parties submitted that neither made any written settlement offers in compliance with the Regulation. Thus, there are no settlement offers relevant to this expense issue.

It is undisputed that Mr. Johnson was relatively unsuccessful in this proceeding. Allstate contends Mr. Johnson should recover 25% of his expenses as against Allstate's recovery of 75% of its expenses. Allstate admits this proposal mimics the Courts. However, if the Legislature intended to utilize the Court's cost system, it would have explicitly set this system out in the Regulations respecting this system.³ Thus, I reject Allstate's position.

Mr. Johnson's disability claim lacked supporting expert opinion. While he and his counsel must have known that his evidence was weak at the commencement of the arbitration, there is no allegation that Mr. Johnson's claim was frivolous, vexatious, fraudulent or altogether unfounded.

Mr. Johnson was left with the decision to either take his chances in proving his claims, seek Allstate's consent to withdraw his claims or consent to Allstate's oral settlement offer to settle all his accident benefits for a lump sum. The $2,000 lump sum offer would not have covered Mr. Johnson's legal fees and disbursements, let alone his claimed treatment expenses. I find that Mr. Johnson was justified in proceeding with the arbitration hearing on his claims.

Mr. Johnson's minimal success, however, justifies reducing the amount of his expense.⁴Under these facts, I find that Mr. Johnson is entitled to 20% of his arbitration expenses, and that each party shall bear its own expenses for the variation/revocation proceeding.

Lawyer's Hourly Rate:

The simple straightforward issues in this case do not justify compensating Mr. Johnson's lawyer at more than the standard hourly rate under the legal aid tariff. Mr. Zweibel was called to the Ontario Bar in 1993, and I find that he is entitled to $73.38 per hour.⁵

June 20, 2001

Fred Sampliner Arbitrator

Date