Neutral Citation: 2003 ONFSCDRS 81

FSCO A99-000033

BETWEEN:

MOHAMED RASHID

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before: Judith Killoran

Heard: April 28, 2003, at the Offices of the Financial Services Commission of Ontario in Toronto.

Appearances: David Levy for Mr. Rashid Robert S. Franklin for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Mohamed Rashid, was injured in a motor vehicle accident on March 19, 1997. I conducted an arbitration hearing on September 25, 26, 27 and 28, 2000 and May 7, 8 and 9, 2001. Written submissions were received on June 25, July 20, August 7 and 13, 2001. I dealt with Mr. Rashid's claims for statutory accident benefits under the Schedule.¹ I made the following orders, while reserving on the issue of expenses:

Mr. Rashid is not entitled to receive a non-earner benefit pursuant to section 12 of the Schedule.
Mr. Rashid is not entitled to receive payment of the treatment accounts for Drs. Sarrafian, Filsoofi and Ally.
Mr. Rashid is not entitled to receive a medical benefit for transportation expenses for trips to Dr. Filsoofi's office.
Mr. Rashid is not entitled to receive payment of attendant care benefits from March 19, 1997 to March 19, 1999.
Mr. Rashid is not entitled to receive payment for housekeeping and home maintenance services from March 19, 1997 to March 19, 1999.
As no benefits are due, Mr. Rashid is not entitled to any interest on overdue payments, pursuant to subsection 46(2) of the Schedule.
Mr. Rashid is not entitled to receive payment of a special award, pursuant to subsection 282(10) of the Insurance Act.

The issue in this further hearing is:

Is either party entitled to expenses incurred in respect of the arbitration hearing, pursuant to subsection 282(11) of the Insurance Act?

Result:

Both parties shall bear their own expenses.

EVIDENCE AND ANALYSIS:

Under subsection 282(11) of the Insurance Act, an arbitrator may award expenses to an insured person or an insurer, if the arbitrator is satisfied that such an 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 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.²

In my decision on the merits, I found that the motor vehicle accident did not significantly or materially contribute to Mr. Rashid's impairment. I also found that the treatment sessions provided by the treatment providers were not reasonable and necessary. Mr. Rashid testified that he experienced very little relief as a result of his sessions with various treatment providers. I found that the treatment providers were not in a position to determine the extent of any impairment caused by the 1997 accident because they were not aware of Mr. Rashid's pre-accident level of impairment nor the extent and number of his other treatments. As I stated in my decision: "By March 1997, Mr. Rashid had a long medical history of receiving no significant benefit from any treatment (whether to improve function or give pain relief) with the exception of the nerve blocks he was receiving from Dr. Rothbart's Pain Management Clinic for many years pre-accident."

State Farm reviewed each of the applicable criteria for awarding expenses. First, State Farm pointed out, and I agree, that Mr. Rashid was not successful with any of his claims.

Second, State Farm submitted that as Mr. Rashid's conduct both before and during the hearing was a source of a good deal of confusion, he prolonged the proceeding, although he did comply with all undertakings and orders. He also called a number of contradictory witnesses. I agree that Mr. Rashid appeared to be less than candid when dealing with his many treatment providers although I was not certain if that was deliberate or a consequence of his various pre-accident disabilities. Mr. Rashid submitted that I should distinguish between someone who is an inaccurate historian by virtue of deception, and his situation, which was a result of his medical condition. For that reason, Mr. Rashid claimed that he made statements against his own interests and gave erroneous dates for important events in his life, such as the death of his wife. I find that Mr. Rashid's conduct tended to prolong the proceeding.

Looking at the third criterion, State Farm asserted that Mr. Rashid took positions which were manifestly unfounded. For example, two years before the 1997 accident, Dr. Pflug, a neurologist, reported to the Workers' Compensation Board that Mr. Rashid was unable to function at home or in the community. Dr. Pflug concluded by saying: "From a rheumatological point of view, I do not have anything to add to his management at this time. He is totally and permanently disabled." Despite such medical evidence, Mr. Rashid asserted that he had completely recovered prior to the 1997 accident. As well, although Mr. Rashid made a claim for housekeeping and home maintenance expenses, I concluded that Mr. Rashid did little housekeeping or home maintenance before the accident. In my decision, I found that the evidence of Mr. Rashid and his son was contradictory, inconsistent and unreliable. So, too, with the claim for a special award which had little merit yet took a good deal of hearing time. Although Mr. Rashid was, at times, not reasonable in his claims, I do not find that the claims were manifestly unfounded, frivolous, vexatious, fraudulent or an abuse of process.

With respect to the fourth criterion to be considered when awarding expenses, State Farm submitted that there was nothing complex or novel about the issues in this case. In Mr. Rashid's opinion, this case was complex due to the complicated nature of his medical history. I find that there was some complexity in this case due to the amount and nature of the medical evidence, some of which was contradictory.

I will not be considering the fifth criterion as there were no written offers to settle from either party.

Mr. Rashid relied principally on two cases: Morelli and Zurich³ and Jimenez v. Cumis⁴ Mrs. Morelli was modestly successful in obtaining minimal travel expenses and the arbitrator found that she had a legitimate claim that entitled her to apply for arbitration. The arbitrator also stated:

I find that the awarding of expenses at arbitration is not based on the results approach of the courts, but is based on the underlying purpose of the statutory accident benefits scheme, namely, to facilitate access to inexpensive, speedy and informal adjudication of disputes. It is for this reason I find that applicants like Mrs. Morelli should not be discouraged from applying to arbitration by being penalized in expenses where their conduct has been reasonable and they have been unsuccessful in a legitimate dispute for benefits.

I was the arbitrator in Jimenez where the issue between the parties was the degree of Ms. Jimenez' impairment. I concluded that this issue was properly taken to hearing. I also considered the issue of accessibility. I stated that I was mindful that the fear of expenses being awarded against applicants could deter them from bringing forward meritorious claims which could jeopardize reasonable accessibility to the dispute resolution system.

I distinguish this case from Morelli and Jimenez. I find that, at times, Mr. Rashid's conduct has not been reasonable.

CONCLUSION

Although I agree that an important principle underlying the awarding of expenses is facilitating access to the dispute resolution system, it must be balanced with the findings on the merits of claims, particularly regarding credibility and conduct. I have a broad discretion under Rule 73 of the Dispute Resolution Practice Code - Third Edition (April 15, 1997) to consider all relevant factors when awarding expenses.

Case law at the Commission has established that an applicant's lack of success at a hearing does not mean that an applicant cannot be awarded expenses. The principle set out by Arbitrator Alves in her expense decision in Gray and Zurich Insurance Company,⁵ upheld on appeal, has been followed generally. That is, the applicant's need for access to relatively inexpensive, speedy and informal adjudication of disputes must be balanced with a "relatively mild deterrent to undeserving claims or undesirable behaviour." I agree with this principle.

I rejected all of Mr. Rashid's claims. I found that his testimony was confusing, inconsistent and unreliable. I did not consider Mr. Rashid's case particularly complex or novel and I believe that Mr. Rashid was self-serving when presenting his evidence. Therefore, I find that a relatively mild deterrent is to deny Mr. Rashid's claim for expenses.

Although I find that Mr. Rashid is not entitled to his expenses of the arbitration, his conduct was not so unacceptable that he should pay the insurer's expenses. Therefore, I find that both parties should bear their own expenses incurred in the arbitration hearing.

May 21, 2003

Judith Killoran Arbitrator

Date