Neutral Citation: 2002 ONFSCDRS 131
FSCO A00-001259
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
MARSHA CAMPBELL
Applicant
and
KINGSWAY GENERAL INSURANCE COMPANY
Insurer
DECISION ON EXPENSES
Before:
William J. Renahan
Heard:
Written submissions received by May 29, 2002.
Appearances:
Ms. Campbell did not make submissions
Jamie Pollack for Kingsway General Insurance Company
Issues:
The Applicant, Marsha Campbell, was injured in a motor vehicle accident on January 21, 2000. The hearing opened on October 15, 2001. The main issue was whether Ms. Campbell was entitled to $3,300 for the cost of medical assessments. Ms. Campbell did not appear at the hearing. At that time, she was represented by Mr. Rod Hare and Mr. Mark Rowe. At the opening of the hearing Mr. Hare asked for what he termed an "order for production requests." I found no merit in the request and ruled that I would not order the production of any document. Mr. Hare asked for an adjournment, which I declined. Mr. Hare and Mr. Rowe left the hearing without answering my direction that he advise me whether they would return. I concluded the hearing.
By letter dated November 7, 2001, the Director of Arbitrations advised me that he had received an application under subsection 282(12) of the Insurance Act for an order appointing a new arbitrator on the grounds that I was biased. The Director directed me not to release any formal orders.
By decision dated December 18, 2001, the Director concluded that there was no basis to prevent me from continuing to act in this case and revoked his previous direction that I not issue any formal decisions.
In a decision dated January 25, 2002, I gave written reasons for my rulings dealing with Ms. Campbell's requests for productions and an adjournment. I postponed issuing a final order until February 15, 2002, pending written submissions by either party for an order that I reopen the hearing.
By letter dated January 23, 2002, and received by the Commission on January 31, 2002, Ms. Campbell advised the Commission that Mr. Hare and Mr. Rowe no longer represented her.
I received no submissions for an order that I reopen the hearing and on May 14, 2002 I issued an order dismissing the application for arbitration. I invited the parties to make written submissions within 45 days on the issue of entitlement to and amount of expenses of the arbitration proceeding.
I received written submissions from Mr. Pollock on May 29, 2002. Among other things, he asked for an award against Ms. Campbell pursuant to subsection 282(11.2) of the Insurance Act. I have not received any submissions from Ms. Campbell.
The issues in this further hearing is:
Is either party entitled to expenses incurred in respect of this arbitration hearing, and, if so, in what amount?
Is Kingsway entitled to an award pursuant to subsection 282(11.2) of the Insurance Act.
Result:
Ms. Campbell shall pay Kingsway expenses assessed in the amount of $1,000.
Ms. Campbell shall pay Kingsway an award of $3,000 pursuant to subsection 282(11.2) of the Insurance Act.
EVIDENCE AND ANALYSIS:
Entitlement:
The criteria for determining entitlement to expenses of the arbitration proceeding are set out in subsection 12(2) of Ontario Regulation 664, R.R.O. 1990 as amended by Ontario Regulation 464/96 ["Expense Regulation"]. I set out each criteria with my comments.
- Each party's degree of success in the outcome of the proceeding.
Kingsway was completely successful.
- 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.
In an adversary process, the conduct of a person under examination is often the conduct of their representative. The conduct of Ms. Campbell's counsel, Mr. Hare, tended to obstruct and hinder the proceeding. He did not understand the difference between "production requests," "production agreements" and "production orders"and, as a result, excessive time was spent trying to understand what Mr. Hare wanted and was entitled to. As well, he was argumentative, left the hearing and refused to indicate whether he would return.
- 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.
Kingsway was put to the unnecessary expense of preparing for a hearing in which the applicant, did not present any evidence concerning the merits of her claim. The proceeding was an abuse of process.
- The degree of complexity, novelty or significance of the factual or legal issues raised in the proceeding.
The issues were not unusually complex, novel or significant. I heard no submissions that matters of principle were involved. The arbitration dealt with a relatively small claim of $3,300.
- 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.
In his written submissions, Mr. Pollack referred to an attached offer to settle made by Kingsway. I could not find the offer in the file. An offer to settle made by Kingsway would not assist Ms. Campbell and after reviewing the evidence, I considered it unnecessary to ask Mr. Pollack to provide me with a copy of the offer. I do not take this criteria into consideration.
- Any other matter related to the proceeding that the arbitrator considers relevant to the issue of whether an award of expenses is justified.
Before November 1, 1996, the principle that applicants with legitimate claims, conducted reasonably, could expect to recover their allowable expenses, win or lose, was adopted in numerous decisions1.
However, as noted by Director Draper in Gray and Zurich Insurance Company, (P98-0047, June 11, 1999) the rules for expenses changed with the Automobile Insurance and Rate Stability Act, S.O. 1996, c.21. Section 282(11) of the Insurance Act now allows expenses to be awarded to either the insured person or the insurer.
In, considering the expense criteria, Director Draper agreed:
that the criteria, specifically clause 6, leave room for concerns about the access to the dispute resolution system. One aspect of accessibility is that insured persons should have a reasonable opportunity to raise novel issues of interpretation, particularly those of general importance.
Having regard to these criteria, I find that Ms. Campbell should pay Kingsway its expenses of the arbitration proceeding.
Under subsection 282(11.2) of the Insurance Act, an arbitrator may order the insured person to pay the insurer up to $3,000, which is the amount the insurer paid to respond to the application for arbitration, if the arbitrator finds that the insured commenced an arbitration that was frivolous, vexatious or an abuse of process. In view of my finding that Ms. Campbell commenced an arbitration which was an abuse of process, I further find that Ms. Campbell should pay Kingsway $3,000.
Amount of expenses:
Section 3 of the Expense Regulation sets out those legal fees which I may award.
3(1) The legal fees payable by the insured person or the insurer for the following matters may be awarded:
For all services performed before an arbitration, appeal, variation or revocation hearing.
For the preparation for an arbitration, appeal, variation or revocation hearing.
For attendance at an arbitration, appeal, variation or revocation hearing.
For services subsequent to an arbitration, appeal, variation or revocation hearing.
(2) The number of hours for which legal fees may be awarded shall be determined by the arbitrator, having regard to the criteria set out in subsection 12(2) of this Regulation.
Mr. Pollack submitted a bill of expenses including GST of $2,807.33 which included $2,238.78 for 29.7 hours of his time billed at $75.38 per hour. He also submitted his computer-generated dockets.
Although I recognize that the legal aid rate of $75.38 is less than Mr. Pollack charges his client, the expense assessment does not necessarily compensate a party for every hour that is docketed in the preparation for and attendance at the hearing.
I find the fourth criteria significant in this case and reduce the bill of expenses to reflect the fact that only $3,300 was in issue.
Having regard to all the criteria, I assess expenses at $1,000.
August 22, 2002
William J. Renahan
Arbitrator
Date
Neutral Citation: 2002 ONFSCDRS 131
FSCO A00-001259
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
MARSHA CAMPBELL
Applicant
and
KINGSWAY GENERAL INSURANCE COMPANY
Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- Marsha Campbell shall pay Kingsway General Insurance Company $4,000.
August 22, 2002
William J. Renahan
Arbitrator
Date