FINANCIAL SERVICES COMMISSION OF ONTARIO
Neutral Citation: 2004 ONFSCDRS 124 FSCO A03-000609
BETWEEN:
ESTATE OF SALVATORE BUCCELLATO Applicant
and
ALLSTATE INSURANCE COMPANY OF CANADA Insurer
DECISION ON EXPENSES
Before: David Muir Heard: July 16, 2004, by telephone conference call.
Appearances: Patrick DiMonte for Mr. Buccellato Donald Harvey for Allstate Insurance Company of Canada
Issues:
Salvatore Buccellato was injured in a motor vehicle accident on June 17, 1998. In a decision dated April 14, 2004, I dealt with the claims of his Estate for non-earner as well as attendant care benefits under the Schedule.1
In the result, I dismissed both claims and left it to the parties to resolve the issue of expenses. They have been unable to do so.
The issue in this further hearing is:
Is either party entitled to their reasonable expenses incurred in respect of this arbitration hearing?
Result:
The Estate of Mr. Buccellato is not entitled to its expenses. Allstate is entitled to its expenses in the amount of $2,171.40.
EVIDENCE AND ANALYSIS:
An arbitrator may award expenses to a party if the adjudicator is satisfied that the award is justified having regard to the criteria set out in the Expense Regulation:
- Each party's degree of success in the outcome of the proceeding.
- Any written offers to settle made in accordance with subsection (3) [and Rules 76 and 77 of the Dispute Resolution Practice Code].
- Whether novel issues are raised in the proceeding.
- The conduct of a party or a party's representative that tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders.
- Whether any aspect of the proceeding was improper, vexatious or unnecessary.
Having regard to these criteria, I find that Allstate is entitled to its reasonable expenses of the arbitration.
Little was said by the parties about the effect of recent amendments to these criteria, in particular, to what extent the changes move us along a continuum where the outcome of the arbitration is largely determinative of which party is entitled to expenses.2 I find pursuant to the appeal decision in Pembridge Insurance Company (Pafco Ins. Co.) and Howden, (FSCO P02-00031, May 17, 2004),3 that these new criteria are the ones I must consider in determining the issue. However, I find that it would not have made much difference to the result in this case had the prior criteria applied.
As indicated earlier, the claims of the Estate were dismissed.
The claim for attendant care was dismissed because the Estate failed to establish what services were provided to Mr. Buccellato, and for what period of time. While it was clear that Mr. Buccellato may well have been in need of some attendant care services for some period of time, particularly when he was in a cast and using a wheelchair, there was absolutely no evidence of what attendant care services were provided.
As regards the claim for a non-earner benefit, the evidence did not approach the level of disability required to establish entitlement. The test - a complete inability to carry on a normal life - is a difficult one to meet and the Estate was unable to produce any evidence in support of its position on this issue.
Both parties dealt with the issues in the hearing with reasonable dispatch. However, Allstate submits that the Estate, by failing to seriously grapple with the real issues in the case, made the resolution of it more protracted than it needed to be. In particular, Allstate submits that the failure of the Estate to comply with an undertaking to provide willsays deprived it of an opportunity to assess the claims made and deprived both parties of the opportunity to perhaps resolve the matter on an informal basis without the need for a hearing.
I agree that if the Estate had made a greater effort to crystallize its evidence concerning these benefits, it might have highlighted the weaknesses in its evidence, or alternatively, have provided Allstate the opportunity to assess the claim without the need for a hearing.
There are risks inherent in forcing a matter to hearing. The evidence often does not come out the way either party expected. Indeed, this was the submission of the Estate on the expenses issues - that the evidence of at least one of its witnesses may have been misstated. This may or may not be the case, however, I must decide the case based on what the evidence was, not what it might have been or should have been. Equally, in determining a party's entitlement to its expenses, in most circumstances I am bound to consider what happened in the hearing room, not what either party intended to happen or not.
That said, I do not consider (and Allstate did not state otherwise) that any position taken by the Estate was improper, vexatious or unnecessary.
Allstate states and I agree that there was nothing complex, novel or legally significant about the issues in this proceeding.
Finally, Allstate advised that it made a written offer to settle seven (7) days before the hearing, for the amount of $750. It was not clear if this was for a full and final settlement, but I will assume that it was in these circumstances.
The Estate submits that it ought to be entitled to its expenses, however, its support for this proposition are not based on any of the criteria set out above. It was suggested that Mr. Buccellato, before he passed away, believed he had been promised a sum of money to resolve all of his claims. Mr. Buccellato's understanding was taken forward by the Estate to mediation and arbitration in the form of claims to particular statutory accident benefits, long after his passing. Taking these background circumstances into account, it was submitted that I ought to exercise my discretion to not penalize the Buccellato family by requiring them to pay Allstate's expenses.
None of these background facts are in evidence. Even assuming that they were established, it would not assist the Estate in its claim for expenses, but merely highlight the problem with the approach the Estate has taken. The dispute resolution process at the Commission is intended to adjudicate disputes respecting statutory accident benefits - it is not intended to vindicate a family's sense of obligation to a deceased family member. I appreciate and sympathize with the motivations of the Buccellato family in pursuing this matter, however, it is not clear to me why Allstate should be required to bear the burden of my sympathy.
I find, therefore, that Allstate is entitled to its reasonable expenses of the arbitration.
There were no submissions made with respect to the reasonableness of the expenses claimed by Allstate.
Allstate claims reimbursement for 33.5 hours of legal fees at the rate of $75 per hour. The fee is more than reasonable given Mr. Harvey's experience level. Arbitrators have developed a rule of thumb in assessing the reasonableness of the amount of preparation time is compensable of between one and four hours of preparation for every hour of hearing time. The hearing lasted no more than 7 hours over two days. This was an extremely straightforward case. There was no significant medical issue. I find that the 12.5 hours of preparation time devoted to this matter by Allstate to be somewhat excessive and I would reduce it to 7 hours. Otherwise, I find no fault with the fees sought by Allstate.
As for its disbursements, I note that Allstate is seeking reimbursement for travel expenses at the rate of $0.35/km and not the rate provided for in the Regulation of $0.30/km. In addition, reimbursement for parking is sought - the Regulation does not allow me to order that Allstate be reimbursed for this expense.
Adjusting the account submitted, as set out above:
Legal Fees:
27.5 hours at $75/hour
$2,062.50
Disbursements:
Photocopying
76.50
Travel (108 km at $0.30/km)
32.40
Total
$2,171.40
Accordingly, the Estate shall pay to Allstate Insurance Company of Canada its reasonable expenses in the amount of $2,171.40.
August 27, 2004
David Muir Arbitrator
Date
Neutral Citation: 2004 ONFSCDRS 124 FSCO A03-000609
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
ESTATE OF SALVATORE BUCCELLATO 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:
- The Estate of Mr. Buccellato shall pay to Allstate Insurance Company of Canada its reasonable expenses in the amount of $2,171.40.
August 27, 2004
David Muir Arbitrator
Date
The new criteria, introduced on October 1, 2003, continue the move toward a more results-based approach to expenses. The list of criteria have been changed to some extent, but more significantly, the criteria are now the only factors that can be considered and there is no longer a broad, "any other matter" criterion.
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.
- Regulation 664 was amended by O.Reg 275/03 effective October 1, 2003. The prior listing of criteria included a final provision which required the arbitrator to consider any other matter related to the hearing that he or she considered relevant. Many arbitrators interpreted this provision to include a requirement that in assessing entitlement to expenses, access to justice concerns should be addressed.
- In Howden, the Director offered the following thoughts on the effect of the change to the criteria for determining entitlement to expenses: