Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2003 ONFSCDRS 111
Appeal P02-00020
OFFICE OF THE DIRECTOR OF ARBITRATIONS
NGAR LEE ALICE POON
Appellant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Respondent
Before:
Stewart M. McMahon
Representatives:
Harvey S. Consky for Mrs. Poon
Greg Houser for State Farm
Hearing Date:
December 18, 2002
APPEAL ORDER
Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- The appeal is dismissed.
July 21, 2003
Stewart M. McMahon
Director’s Delegate
Date
REASONS FOR DECISION
I. NATURE OF THE APPEAL
Mrs. Poon appeals from an arbitration order dated June 27, 2002, dismissing her claim for arbitration expenses.
II. BACKGROUND
Mrs. Poon was injured in a motor vehicle accident on April 3, 1999. Approximately three months later, she began to receive acupuncture treatments from Mr. Ming Fai Chan, a practitioner of traditional Chinese medicine. Mr. Chan administered 51 treatments over three months. He delivered an account for these services to State Farm Mutual Automobile Insurance Company (“State Farm”) totaling $5,737.50. Mr. Chan also prepared two treatment plans at an additional cost of $75 each, and two reports for which he charged $150 and $200 respectively. In addition, Mrs. Poon submitted a claim for transportation expenses of $267 that she paid to a private company that drove her back and forth to Mr. Chan’s office.
State Farm denied the claims, prompting Mrs. Poon to file for mediation. When the mediation failed, Mrs. Poon filed an Application for Arbitration. The hearing was conducted over three consecutive days. Mrs. Poon testified and called Mr. Chan and Dr. Li, her family physician. State Farm’s counsel cross-examined each of these witnesses extensively, but did not call any of his own. Mrs. Poon had very limited success at arbitration.
Mrs. Poon’s claim for transportation expenses was dismissed because she did not explain why she could not have driven herself back and forth, or walked to Dr. Chan’s office, as she did to other appointments that were a similar distance from her home.
Mrs. Poon’s claim for the cost of the treatment plans was dismissed on the basis that Mr. Chan is not a member of a regulated health profession, and hence was not authorized to prepare treatment plans.
The Arbitrator allowed the claim for the reports, but reduced the account from $350 to $200.
With respect to the principal claim, the Arbitrator accepted Mrs. Poon’s subjective evidence that the acupuncture treatments were helpful. He also accepted the evidence of Dr. Li that the treatment was useful. However, he awarded Mrs. Poon only $1,773.53 of the $5,737.50 that was claimed. There were two reasons for this sizeable reduction. The first related to the complaints that Mr. Chan treated. The second related to the per-session fee charged by Mr. Chan.
Mr. Chan treated Mrs. Poon’s neck, shoulders, left arm, low-back and knees. However, the Arbitrator found that her left arm and knee complaints were unrelated to the accident. Because Mr. Chan treated all of Mrs. Poon’s ailments on each visit, the Arbitrator reduced the per-visit charge by 50 per cent to reflect the fact that only half of the treatment was accident-related. In addition, the Arbitrator found that the rate charged by Mr. Chan was far beyond what was recommended by the association representing acupuncturists. He reduced the rate from $112.50 per visit, to $65 per visit. Once these factors were accounted for, the Arbitrator awarded Mrs. Poon roughly 30 per cent of her treatment expenses.
The Arbitrator was unimpressed with Mr. Chan. He found that Mr. Chan attempted to inflate his professional credentials by claiming to be a physician. He also found that when Mr. Chan learned that Mrs. Poon’s knee and left arm complaints pre-dated the accident, he withheld this crucial information. The Arbitrator’s view of Mr. Chan no doubt took on added significance in light of Mrs. Poon’s evidence that she only continued to see Mr. Chan on the understanding that she would not have to pay for the treatments, and Mr. Chan’s concession that he would “sue” the insurance company if they refused to pay.
The Arbitrator’s comments on the question of arbitration expenses are very brief:
Mrs. Poon’s partial success on this claim must be weighed against her participation in the considerable waste of Commission time during the three hearing days. My admonitions to each representative to cease their irrelevant repetitive questioning and overly technical objections during the arbitration went unheeded. In my opinion, the hearing could have been completed in half the time.
Considering the Expenses Regulation, criteria, I am not prepared to award either party any of their arbitration expenses.
III. ARGUMENT
Mrs. Poon argues that she was successful on at least half of the issues submitted to arbitration, and, therefore, the Arbitrator erred in not awarding her the expenses associated with the first day and a half of the hearing, and the disbursements associated with calling Dr. Li. In addition, Mrs. Poon submits that a review of the transcript of the hearing reveals that most of the “irrelevant repetitive questioning and overly technical objections” were made by State Farm’s counsel, and hence it was unfair to penalize her.
State Farm makes three principal arguments. One, it submits that it is well established that expense orders will not be disturbed lightly on appeal. Two, it argues that Mrs. Poon has employed some “poetic license” when she suggests that she was successful on half of the issues submitted to arbitration. Three, it submits that a more careful reading of the transcript reveals that it is not fair to lay the blame for an overly long hearing solely at its feet. In short, State Farm submits that the Arbitrator was well within his authority when he decided to award neither party expenses.
IV. ANALYSIS
On its face, Mrs. Poon makes a sympathetic argument. She was at least partially successful, but was not awarded any of her expenses. This is an uncommon result following an arbitration proceeding at the Commission. However, I am not convinced by Mr. Poon’s submission that the decision should be overturned.
First, Mrs. Poon’s argument that the Arbitrator erred in finding that she contributed in a significant way to the “wasted time” is a direct attack on the Arbitrator’s findings of fact. I am satisfied that there was evidence to support the Arbitrator’s findings, and hence they are not reviewable on appeal.
Second, and more generally, the awarding of expenses is a matter within the Arbitrator’s discretion and accordingly, should not be interfered with lightly. See Gray and Zurich Insurance Company, (FSCO P98-00047, June 11, 1999). In Allison and Markel Insurance Company of Canada, (OIC P-001231, August 21, 1996), Director’s Delegate Naylor indicated that this deference is due in part to the fact that “the arbitrator is able to consider the evidence in totality, including observing and hearing any witnesses, and usually is in the best position to assess the merits of the case and the way it was handled by the parties.” In this case, the idea that expenses are based on an overall view of the case is particularly germane.
Mrs. Poon reads the Arbitrator’s comments in relation to expenses as though his only concern was the finding that the case could have been concluded in half the time. I do not read the decision in the same way. After commenting on the length of the hearing, the Arbitrator concluded with a sentence set apart in a separate paragraph, which reads: “Considering the Expense Regulation criteria, I am not prepared to award either party any of their arbitration expenses.” This suggests to me that the Arbitrator considered other factors. It would have been helpful if the Arbitrator had referred to these factors in this portion of his reasons, if even in a summary fashion. However, reading the decision as a whole, it is clear to me that the Arbitrator took a very dim view of significant parts of Mrs. Poon’s case and this influenced his decision on expenses.
I read the Arbitrator’s comments about Mr. Chan’s conduct as suggesting that he thought the claim for the treatment of the non-related ailments was more than an honest disagreement over a causation issue. Similarly, I believe the Arbitrator thought Mr. Chan was inflating his per-session fees in a way that went beyond the bounds of propriety. When these factors are combined with the dismissal of the claim for travel expenses, and the claim for the cost of the treatment plans, the Arbitrator could have awarded State Farm a portion of its expenses. His ultimate conclusion that neither party should be awarded expenses, represents a balancing of these factors against the fact that Mrs. Poon enjoyed some success. I am satisfied that this outcome was within the Arbitrator’s discretion, and hence cannot be disturbed on appeal.
V. APPEAL EXPENSES
As noted earlier, the decision to deny an insured person who enjoyed some success, all of her expenses, is an uncommon result. In addition, the brevity of the expenses portion of the reasons made the decision more difficult to comprehend. In addition, it is clear from Mr. Consky’s bill of costs that the legal expenses incurred at arbitration will more than wipe out the amount recovered. Both parties bear some blame for this. In these circumstances, I think that the most just disposition of expenses on appeal is to leave each party to bear their own quite limited expenses.
July 21, 2003
Stewart M. McMahon
Director’s Delegate
Date