Anjum Dar v. Allstate Insurance Company of Canada, 2003 ONFSCDRS 83

Neutral Citation: 2003 ONFSCDRS 83

FSCO A02-000906

BETWEEN:

ANJUM DAR

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

DECISION ON EXPENSES

Before:

William J. Renahan

Heard:

Written submissions received by March 29, 2003.

Appearances:

Raj Napal, Barrister and Solicitor, for Mrs. Dar

Mark L.J. Edwards, Barrister and Solicitor, for Allstate Insurance Company of Canada

The Applicant, Anjum Dar, was injured in a motor vehicle accident on September 26, 1999. In a decision dated March 5, 2003, I dealt with her claims for statutory accident benefits under the Schedule.¹ At issue were entitlement to income replacement benefits, amount of any income replacement benefit, entitlement to housekeeping expenses and entitlement to a special award. I dismissed Mrs. Dar's Application for Arbitration, while reserving on the issue of expenses. Each party claimed expenses of the arbitration proceeding and made written submissions on the issues of entitlement and amount of expenses of the arbitration proceeding.

Mrs. Dar shall pay Allstate its expenses of the arbitration proceeding in the amount of $3,686.25.

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 criterion with my comments.

Each party's degree of success in the outcome of the proceeding.

Allstate was completely successful and Mrs. Dar was completely unsuccessful.

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.

Mrs. Dar called Dr. Eric Pierre and Dr. Pierre Kirwin to testify on her behalf. Dr. Pierre is a dentist with an interest in tempo mandibular joint disorders and Dr. Kirwin is a physiatrist. Both doctors treated Mrs. Dar. I upheld Allstate's objection to either of these doctors expressing an opinion on any disability Mrs. Dar might suffer because of Mrs. Dar's failure to comply with Rule 42 of the Dispute Resolution Practice Code (Fourth Edition, May 31, 2001). Although they both testified about the complaints they recorded and their treatment, neither added any relevant testimony on the issue of disability and I did not find their testimony helpful. Their attendance tended to prolong the proceeding.

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.

A major issue in this case was Mrs. Dar's claim that she paid over $23,000 to someone she identified as Sarah Nadeem to perform the work she could not perform because of her alleged disability. A month after the accident, in about October 1999, Allstate's accountants wrote to Mrs. Dar and asked for "evidence of payments made to replacement workers (i.e., copies of cancelled cheques) and the name and telephone number." The accountants repeated the request seven times up to June 29, 2000. Mrs. Dar never answered the request. Other than her own testimony, Mrs. Dar did not produce any evidence to prove the existence of Sarah Nadeem or one piece of source documentary evidence that she paid anyone anything to do her work. Even the income tax records that Mrs. Dar asked her accountant to create did not refer to payments to a replacement worker.

Mrs. Dar presented no reliable independent evidence on the crucial issue of alleged payments to a replacement worker in circumstances where Allstate's accountants persistently asked for such evidence so that they could determine whether it should pay benefits to Mrs. Dar. In these circumstances, one would normally expect to hear some independent evidence of these payments if Mrs. Dar was making such payments. I heard no reliable independent evidence or any reliable explanation for the complete lack of such evidence. The proceeding bordered on being frivolous.

The degree of complexity, novelty or significance of the factual or legal issues raised in the proceeding.

The issues were not unusually complex or novel. Although the issues were significant to Mrs. Dar, I heard no submissions that matter of principle were involved.

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.

Neither party made any written offer to settle.

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 decisions.²

However, as noted by Director Draper in Gray and Zurich Insurance Company, (FSCO P98-00047, 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.

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.

The parties may have resolved their dispute without access to this system if Mrs. Dar had provided Allstate with some believable evidence that she hired a replacement worker. Allstate's request for such information was reasonable. In these circumstances, the criterion of access to the dispute resolution system does not weigh in favour of Mrs. Dar.

Having regard to all the criteria, I find that Mrs. Dar should pay Allstate its expenses of the arbitration proceeding if demanded.

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.

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.

On behalf of Allstate, Mr. Edwards claimed 16.2 hours of preparation time and 22.8 hours of attendance time for the arbitration proceeding. Based on his years of experience, he claimed the maximum allowable hourly rate, which at the time of the hearing was $83.75 per hour. Rule 78.1 allows an adjudicator to award up to $150 per hour where "an adjudicator is satisfied that a higher amount for legal fees to an insured person is justified."

On behalf of Mrs. Dar, Mr. Napal claimed 75 hours for preparation and 18 hours for attendance at the hearing at $125 per hour.

Having regard to the criteria set out in the Expense Regulation, including Mr. Napal's assessment of what he considered reasonable preparation time, I find Mr. Edwards' claim for expenses reasonable and I allow Allstate the 39 hours claimed at the maximum hourly rate of $83.75 for a total counsel fee of $3,266.25.

As for disbursements, Mr. Edwards wrote: "Disbursement costs were kept to a minimum and the only disbursements for which the insurer is seeking reimbursement are two expenses incurred with OHIP, totalling $420." I found nothing in the documents which were filed to support any payment to OHIP.

Mr. Napal did not dispute the disbursements claimed by Allstate.

The correspondance from Allstate's accountants to Mrs. Dar were made exhibits and Mr. Edwards did not ask for compensation for any cost for services provided by the accountants it retained. Although I do not know why OHIP charged Allstate $420, Mr. Napal did not dispute the claim, and, in its totality, Allstate's disbursements are reasonable.

I therefore allow the $420 claimed by Allstate as disbursements.

The total allowable expenses of the arbitration proceeding are $3,686.25.

May 23, 2003

William J. Renahan Arbitrator

Date