Neutral Citation: 2002 ONFSCDRS 154
FSCO A01-000344
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
ALKSANDER POLYAKOV
Applicant
and
ALLSTATE INSURANCE COMPANY OF CANADA
Insurer
DECISION ON EXPENSES
Before:
Deena Baltman
Heard:
Written submissions received by September 6, 2002; oral submissions by telephone conference call on September 17, 2002.
Appearances:
Vadim Malyshev for Mr. Polyakov
Ian D. Kirby for Allstate Insurance Company of Canada
Issues:
The Applicant, Alksander Polyakov, was injured in a motor vehicle accident on December 8, 1999. He applied for income replacement benefits or, in the alternative, non-earner benefits from Allstate Insurance Company of Canada ("Allstate"), under the Schedule.1 He also sought to recover the cost of various medical treatments that he incurred while attending the Integrated Health Recovery clinic (Integrated) following the accident.
Allstate denied income replacement benefits on the basis that Mr. Polyakov fabricated his pre-accident employment, and also rejected his claim for non-earner benefits. Allstate paid for some medical benefits, but denied others because Mr. Polyakov failed to attend a DAC2assessment and because it viewed the expenses as unreasonable or unnecessary.
In a decision dated August 23, 2002, I dealt with Mr. Polyakov's claims for accident benefits and made the following orders, while reserving on the issue of expenses of the arbitration proceeding:
Mr. Polyakov was not employed at the time of the accident.
Mr. Polyakov did not suffer a complete inability to carry on a normal life as a result of the accident within the meaning of section 12(1) of the Schedule, and was therefore not entitled to non-earner benefits.
Mr. Polyakov is barred from recovering expenses incurred at the Integrated Health Recovery clinic (Integrated) from March 15, 2000 onward.
For the period preceding March 15, 2000, Mr. Polyakov is entitled to recover expenses as specified in the decision.
The issues in this further hearing are:
Is either party entitled to its expenses incurred in respect of this arbitration proceeding?
If so, to what amount is the successful party entitled?
Result:
- Allstate is entitled to recover $6,428.10, being two-thirds of its expenses of the arbitration hearing.
Submissions and Findings:
A. Entitlement to Expenses
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. I set out each criteria with my comments.
- Each party's degree of success in the outcome of the proceeding.
Other than legal expenses, the hearing concerned three issues, as set out above. At least two-thirds of the hearing was devoted to the first two issues, namely whether Mr. Polyakov was entitled to IRBs or non-earner benefits. Mr. Polyakov was completely unsuccessful on both those issues. On the third issue, involving expenses incurred at Integrated, Mr. Polyakov achieved some modest success: out of the roughly $7,000 he was claiming, he recovered approximately $1,700. I therefore agree with the Insurer that it was almost completely successful at arbitration.
- 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.
Mr. Malyshev, Mr. Polyakov's representative at both hearings, argued that the Insurer prolonged the hearing by overly scrutinizing the expenses incurred at Integrated, particularly because other decisions at FSCO had permitted similar claims incurred at Integrated. I disagree; first, each applicant's injuries and treatment needs are unique, and must be assessed on their own merits; second, Mr. Polyakov's failure to recover many of the expenses in this case confirms that there was merit in the Insurer's opposition.
On the other hand, I find that the conduct of Mr. Malyshev tended to prolong, obstruct and hinder the proceeding. Some examples include:
At the beginning of the hearing Mr. Malyshev sought an adjournment on the exact same grounds that he had presented, without success, to another arbitrator only one week earlier. Even though I declined that motion, Mr. Malyshev renewed his request on several occasions throughout the hearing, without advancing any new or different grounds.
When arguing the issue of whether Mr. Polyakov was precluded from recovering medical expenses because of his failure to attend a DAC, Mr. Malyshev raised spurious arguments knowing he had no evidence to support them. For example, he suggested that the DAC was under a conflict of interest, but produced no evidence in support of that allegation. He also repeatedly argued that Mr. Polyakov's former representative "may" have sent a letter to Allstate asking for the DAC to be rescheduled, but never produced any such letter or any evidence that someone had authored such a letter.
Mr. Malyshev was poorly prepared and often disorganized in his presentation. He frequently belaboured irrelevant points or neglected to address important ones. His final submissions consisted of two hours of rambling, incoherent remarks in which he again raised issues on which I had already ruled, even though he had been warned that this was both fruitless and discourteous.
Mr. Malyshev attributed any shortcomings in his advocacy to the fact that he was retained only one month before the hearing. I note that this case had previously been adjourned at the Applicant's request, in part because he needed time to retain new counsel. He had nearly a year to do so, but failed to retain Mr. Malyshev until one month before the hearing. I therefore have little sympathy for the position in which Mr. Malyshev found himself. Moreover, with one exception (noted below), the issues in the case were not complex and could have been absorbed and presented much more effectively in the time available. This is particularly so given that Mr. Malyshev claims that he possesses significant experience and expertise in the field of accident benefits, from which, according to him, he "generates substantial revenues."
- 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 pivotal and most time-consuming issue in the case was whether Mr. Polyakov was employed at the time of the accident. As detailed in my decision, the evidence against Mr. Polyakov on this claim was extensive and very damaging. Contrary to Mr. Malyshev's assertion, Mr. Polyakov failed on this point not simply because of the absence of supporting documentation, but because of the inherent frailties of his evidence and other witnesses who he called on his behalf. I find that on the evidence, this claim was manifestly unfounded.
- The degree of complexity, novelty or significance of the factual or legal issues raised in the proceeding.
With one exception, the issues were not complex, novel or significant. The exception concerns the issue of whether Mr. Polyakov was barred from recovering expenses incurred at Integrated because of his failure to attend a DAC assessment. Specifically, the parties researched and argued the relatively novel issue of whether subsection 43(3) precludes an applicant from benefits for any period before he fails to attend a properly scheduled DAC. Mr. Polyakov succeeded on this legal issue, although it resulted in only a modest financial recovery when determining the merits of his medical expense claim.
- 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.
The parties did not ask me to consider any offer made.
- Any other matter related to the proceeding that the arbitrator considers relevant to the issue of whether an award of expenses is justified.
In this case, all the relevant matters related to expenses are set out in my discussion of the criteria above. In summary, I have found that the issues were, on the whole, straightforward, and the Insurer was successful on virtually all of them. Mr. Polyakov's key argument in the arbitration, namely that he was employed at the time of the accident, turned out to be manifestly unfounded. Moreover, his representative's conduct prolonged and hindered the proceeding. It is worth noting that, in accordance with FSCO's usual practice, Mr. Polyakov was advised in the pre-hearing letter, sent in August 2001, that he may be liable to pay Allstate's expenses of the hearing.
Given all these circumstances, I order Mr. Polyakov to pay the Insurer two-thirds of its expenses of the arbitration proceeding.
B. Amount of Expenses
On behalf of the Insurer, Mr. Kirby submitted a list of fees and disbursements being sought. Mr. Malyshev did not contest any of the items claimed.
The Insurer seeks legal fees of $5,092 for Mr. Kirby, consisting of 60.8 hours at $83.75 per hour. It also seeks $26.80 for .40 hours spent by a junior lawyer and $1,368 for 34.2 hours spent by a law clerk. Given the length of the hearing (four days), the productions involved, and the issues at stake, I find these sums reasonable.
I also find all the disbursements set out in Mr. Kirby's letter of September 6, 2002, to be fair and reasonable. The total bill comes to $9,642.16, of which Mr. Polyakov is liable for two-thirds, the net amount being $6,428.10.
September 24, 2002
Deena Baltman
Arbitrator
Date
Neutral Citation: 2002 ONFSCDRS 154
FSCO A01-000344
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
ALKSANDER POLYAKOV
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:
- Mr. Polyakov shall pay Allstate $6,428.10, being two-thirds of its expenses of the arbitration.
September 24, 2002
Deena Baltman
Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended by Ontario Regulations 462/96, 505/96, 551/96, 303/98, 114/00 and 482/01.
- Designated Assessment Centre