Neutral Citation: 2003 ONFSCDRS 124
FSCO A02-000418
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
VAN TUYET TRAN
Applicant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Insurer
DECISION ON EXPENSES
Before:
David Leitch
Heard:
Written submissions received prior to a telephone conference on August 8, 2003.
Appearances:
Karen Kwan Anderson for Mrs. Tran
Jonathan B. Schrieder for State Farm Mutual Automobile Insurance Company
Issues:
In a decision dated March 20, 2003, I issued the following arbitration order:
Ms. Tran is entitled to income replacement benefits from August 22, 2001 to November 16, 2001.
Ms. Tran received income replacement benefits at a higher rate than she was entitled to. The parties will determine the correct rate in accordance with this decision, the amount of the resulting overpayment, the interest owing on this amount under section 47(6), if any is claimed, and the method of Ms. Tran's repayment. I will remain seized of these issues in the event the parties are unable to resolve them and so notify me within 30 days of the issuance of this decision.
Ms. Tran is not entitled to housekeeping benefits.
I am now required to decide the following additional issue:
- Is Ms. Tran entitled to hearing expenses?
Result:
- State Farm will pay Ms. Tran's hearing expenses in the amount of $2,211.96.
ANALYSIS:
Ms. Tran claimed expenses in the amount of $5,093.02, exclusive of her counsel's attendance at the expense hearing. State Farm submitted that each party should bear its own expenses. I must resolve this dispute in accordance with the criteria stipulated by the Expense Regulation.1
Ms. Kwan-Anderson took the position that none of these criteria permitted me to take into consideration the conduct of counsel in awarding expenses. In support of this submission, she relied upon the decision in Hill v. Wawanesa Mutual Insurance Company2 where the arbitrator observed: "The Commission is not in the business of disciplining lawyers and, indeed, lacks any statutory mandate to do so."
Ms. Kwan-Anderson's submission ignored the fact that the arbitrator made this observation when dealing with the question of whether expenses could be awarded against counsel personally. Earlier in his decision, the arbitrator had stated: "...it is clear that under normal circumstances an individual is responsible for the actions of his or her agent." FSCO case law demonstrates that arbitrators may take the conduct of representatives into consideration in awarding expenses. As stated by the arbitrator in Docoute v. Zurich Insurance Company:
Unlike the Rules of Civil Procedure, the rules that govern FSCO's arbitration process do not provide for the imposition of expenses payable by a lawyer or a representative. I find however that a client must bear some responsibility to retain a representative who will provide proper representation and conduct himself or herself appropriately in an arbitration hearing.3
1. Each party's degree of success
Ms. Tran's claim for income replacement benefits beyond August 21, 2001 was successful but only for a few additional months. State Farm's demand for repayment of benefits was successful but only for half the amount claimed. The parties' partial successes on these issues left Ms. Tran with an agreed-upon recovery of $1,922.31. However, Ms. Tran's claim for housekeeping expenses in the approximate amount of $5,000 was entirely unsuccessful.
On balance, I find that Ms. Tran achieved no greater degree of success than State Farm.
2. Conduct of parties
Counsel blamed each other for the hearing time spent dealing with the preliminary issue regarding Dr. Beharry's report dated September 2, 2002. Mr. Schrieder submitted that this issue only arose because the report was not served in a timely manner. Ms. Kwan-Anderson relied upon my finding that late service did not result in any procedural unfairness.
It is true that I did not accept Mr. Schrieder's objection to the admission of this report. However, I stated that "Rule 39 [of the Dispute Resolution Practice Code, Fourth Edition, May 31, 2001] can certainly be read to support Mr. Schrieder's argument that I should have decided this issue solely by reference to the absence of 'extraordinary circumstances' beyond the control of the Applicant or her representative." In fact, Ms. Kwan-Anderson was unable to point to any "extraordinary circumstances" justifying her firm's failure to serve Dr. Beharry's report in a timely fashion. In other words, Mr. Schrieder's objection to the admission of the report, while dismissed, was far from groundless. He did not, for example, object to the admission of the report merely because it favoured the Applicant's case. He objected on the ground that Ms. Kwan-Anderson had failed to explain why the report was not served in a timely fashion. In my opinion, it was this failure, not the reasonable objection to this failure, which generated the preliminary issue.
Mr. Schrieder questioned Ms. Kwan-Anderson's decision to call the employer, Mr. Ron Grossman, as a witness with respect to the repayment issue. He maintained that Mr. Grossman's attendance was unnecessary because the correct income information was supplied to the parties prior to the hearing through Mr. Grossman's letter dated January 10, 2003.4 That was the Friday of the week before the hearing started but Mr. Grossman's letter still obviated the need to call him as a witness on Tuesday, January 14, 2003. Moreover, while I appreciate that Ms. Kwan-Anderson sought to establish that State Farm had obtained the incorrect income information from Mr. Grossman, and not from her client, she did not need to call Mr. Grossman as a witness to do so. His letter of January 10, 2003 also made that clear.
Furthermore, I must agree with Mr. Schrieder that Ms. Kwan-Anderson did not appear to understand the function of an opening statement. Rather than briefly describe the issues to be decided and the evidence to be called, Ms. Kwan-Anderson launched into a long and detailed recitation of "facts" which had not yet been proved in evidence.
In each of these three ways, I find that the conduct of the Applicant's representative unnecessarily prolonged the hearing.
3. Positions taken
As my decision indicated, Ms. Kwan-Anderson made two meritless legal arguments, one having to do with whether section 47 requires the author of the error causing the overpayment to be identified, and the other having to do with whether section 32(4) governs housekeeping claims.
In both cases, I find that Ms. Kwan-Anderson took manifestly unfounded positions on behalf of her client.
4. Degree of complexity or novelty
Despite Ms. Kwan-Anderson's attempt to describe her interpretation of section 47 as "novel", in my view, her interpretation was simply without merit. No aspect of this case was complex, novel or otherwise worthy of an extraordinary expense award.
5. Settlement offer
By letter dated December 19, 2002, State Farm offered to pay Ms. Tran $800 to settle the issues scheduled for arbitration at the hearing to commence on January 13, 2003.5 State Farm's letter said nothing about expenses. It has now been determined that Ms. Tran was entitled to recover more than double the amount offered by State Farm to settle these issues, exclusive of any expense award.
6. Other matters
Access to the dispute resolution system is a relevant consideration when dealing with the issue of expenses.6 In this case, while I dismissed Ms. Tran's housekeeping claim on its merits, I did not decide that her claim was fraudulent, dishonest or fabricated. I only decided that she had not presented "cogent evidence proving the reasonableness, the necessity and the cost" of the housekeeping expenses she claimed.
CONCLUSION AND ASSESSMENT:
Taking all of the above into consideration, I find that Ms. Tran is entitled to recover half her counsel fees and all of her disbursements.
The number of hours of counsel time is not 50.8, as stated in Ms. Kwan-Anderson's breakdown. It is rather the total of 16.5 hours (hearing), 21.5 hours (preparation) and one hour (expense hearing), for a total of 39 hours. Ms. Tran's counsel fees are, therefore, calculated and awarded as follows:
39 hours x $70.35 per hour = $2,743.65 plus $55.20 (law clerk) plus GST = $2,994.76 divided by two = $1,497.38.
I accept Ms. Kwan-Anderson's statement that Ms. Tran's disbursements were $714.58.
I, therefore, award Ms. Tran expenses in the total amount of $2,211.96.
August 25, 2003
David Leitch Arbitrator
Date
Neutral Citation: 2003 ONFSCDRS 124
FSCO A02-000418
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
VAN TUYET TRAN
Applicant
and
STATE FARM MUTUAL AUTOMOBILE 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:
- State Farm will pay Ms. Tran's hearing expenses in the amount of $2,211.96.
August 25, 2003
David Leitch Arbitrator
Date
Footnotes
- Ontario Regulation 664, R.R.O. 1990, as amended by Ontario Regulation 464/96.
- FSCO A01-000550, February 24, 2003.
- FSCO A00-000027, September 19, 2001, affirmed in Appeal P01-00036, July 29, 2002. See also Polyakov v. Allstate Insurance Company of Canada, FSCO A01-000344, September 24, 2002.
- Exhibit 4.
- Applicant's Expenses Brief, Tab 3.
- Gray v. Zurich Insurance Company, FSCO A97-001660, January 29, 1999, affirmed in Appeal P98-00047, June 11, 1999.