Joanne Abela v. Wawanesa Mutual Insurance Company, 2004 ONFSCDRS 125

FINANCIAL SERVICES COMMISSION OF ONTARIO

Neutral Citation: 2004 ONFSCDRS 125 FSCO A03-000905

BETWEEN:

JOANNE ABELA Applicant

and

WAWANESA MUTUAL INSURANCE COMPANY Insurer

DECISION ON EXPENSES

Before: David Leitch

Heard: Written submissions received June 23, 2004 and July 16, 2004, and oral submissions heard by telephone conference on July 23, 2004.

Appearances: Joseph Campisi Jr. for Ms. Abela Ian D. Kirby for Wawanesa Mutual Insurance Company

Issues:

In a decision dated May 3, 2004, I ordered Wawanesa to pay Ms. Abela housekeeping benefits¹ from June 2, 2003 to September 15, 2003 at the rate of $30 per week. I reserved on the issue of expenses. The issue in this further hearing is:

1. Is either party entitled to recover her/its expenses and, if so, in what amount?

Result:

1. Neither party is entitled to recover expenses from the other.

ANALYSIS:

Assessments

During the course of argument, it became clear that the parties did not seriously dispute the assessment of each other's claim for expenses. Mr. Campisi initially claimed expenses for the Applicant in the amount of $6,844.05. However, he acknowledged Mr. Kirby's concern that since Wawanesa had already paid $1,000 for expenses in respect of a settled issue, the Applicant's expense claim should be reduced to $5,844.05. Mr. Kirby had no other concerns about the assessment of the Applicant's expenses and Mr. Campisi also agreed that the amount claimed by Mr. Kirby, $5,540.95, was a reasonable assessment of the Insurer's expenses.

Access to the Dispute Resolution System

Mr. Campisi submitted that my expense decision should reflect concern about access by insured persons to the dispute resolution system. However, since the amendment to the Expense Regulation by Ontario Regulation 275/03, it appears that arbitrators no longer have the authority to consider this factor.

This was made clear in the case of Pembridge Insurance Company (Pafco Ins. Co.) and Howden, where the Director of Arbitrations provided the following history of the law of expenses before this tribunal.

The expense provisions have gone through two major revisions since 1990. Originally, expenses could only be awarded to insured persons, not insurers. Under this legislation, arbitrators and appeal adjudicators typically awarded expenses to the insured person, win or lose, as long as the claim was legitimate and the proceedings were conducted in a reasonable manner.

This changed in November 1996. Subsection 282(11) of the Insurance Act was amended to allow expenses to be awarded to either the insured person or the insurer. In addition, a list of criteria was added to the regulations.² The adjudicator was to award expenses "having regard to" these criteria. I discussed these changes in Gray and Zurich Insurance Company, (P98-00047, June 11, 1999), as follows:

In my view, the new expense provisions signalled a change. Although most of the criteria have been discussed in earlier decisions, the analysis was affected by the fact that only one party could be awarded its expenses. Arbitrators now have an obligation to consider the legislated criteria, including the result, applying them to both parties. However, I agree with the arbitrator that the criteria do not reflect a move to the kind of results-based approach used by the courts. Success is only one criterion in an open-ended list and, therefore, must be weighed against the other relevant considerations. I also agree with the arbitrator 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 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.³ (my emphasis)

Each Party's Degree of Success

I turn then to the first criterion which is still recognized by the amended Expense Regulation, each party's degree of success.

In his opening statement at the hearing, Mr. Campisi stated that his client sought housekeeping benefits at the maximum rate of $100 per week throughout the two year period from June 12, 2002, when she was injured in the accident, to June 12, 2004. It is clear that the Applicant fell well short of this objective: she only recovered benefits to September 15, 2003 at the rate of $30 per week.

On the other hand, I rejected Wawanesa's contention that the Applicant was not entitled to housekeeping benefits after June 2, 2003. I found the medical evidence relied upon by Wawanesa in support of that contention unconvincing and I accepted the reports of the Applicant's treating doctors as supportive of her claim.

In short, while neither party achieved her/its ultimate objective, both enjoyed some measure of success. Based on this criterion, I would find that each party should bear its own arbitration expenses.

Written Offers to Settle

The second criterion identified by the Expense Regulation pertains to written offers to settle. Mr. Campisi sought to rely upon his client's written Offer to Settle dated March 4, 2004, approximately ten days before the commencement of the hearing. According to the terms of this Offer, the Applicant agreed to accept $6,000 in satisfaction of all claims for accident benefits.

At the time this Offer was made, the Applicant advanced three types of "claims for accident benefits": one for chiropractic treatment under section 14 of the Schedule, another for housekeeping benefits under section 22 of the Schedule, and a third for meal expenses, under Part VI of the Schedule.

However, on the Friday before the hearing was to commence, March 12, 2004, the parties settled the Applicant's claim for chiropractic treatment. This left the housekeeping and meal expense claims, as Mr. Campisi's letter of that date to Mr. Kirby confirmed.⁴ Then, on the day the hearing commenced, March 15, 2004, I was informed that the meal expense claim had been withdrawn, thus leaving only the housekeeping claim.

I find that these post-Offer events vitiated the original Offer and did so during the critical period just prior to the commencement of the hearing. In my view, Wawanesa cannot have been expected to deduce from the original Offer what the Applicant's new offer might have been with respect to the single claim finally advanced at the hearing. It was for the Applicant to formulate such an offer, preferably at least five days before the commencement of the hearing in keeping with Rule 76.1(b) of the Dispute Resolution Practice Code.

While made in connection with Rule 49 of the Rules of Civil Procedure, I agree with the following comments of Justice Macdonald in the case of Yepremian v. Weisz (1993) 1993 CanLII 5483 (ON CTGD), 16 O.R. (3d) 121:

Settlement can only be contemplated and accomplished if there is something fixed and determinable to contemplate and accept.

This Plaintiff could not have known what was there to accept. This offer was not consistent with the intention of Rule 49 to foster settlement by means of fixed and determinable offers, which can be either accepted or rejected, and to attach cost consequences to those which are made at least seven days before the commencement of the trial and remain outstanding until trial, thereby permitting reasonable settlement discussions and more orderly operation of the court system.

I therefore disregard the Applicant's Offer to Settle of March 4, 2004 in determining her entitlement to expenses.

Mr. Kirby acknowledged that his client made no written Offers to Settle in accordance with the Expense Regulation.

I conclude that the Offers to Settle criterion has no application to the determination of expenses in this case.

The Other Criteria Specified by the Expense Regulation

This was not a case which involved novel issues. Nor did either party prolong, obstruct or hinder the proceeding by failing to comply with undertakings or orders or by engaging in any improper, vexatious or unnecessary conduct or behaviour.

These criteria do not, therefore, influence my decision on expenses.

Conclusion

Based on the criteria identified by the Expense Regulation, as amended, I find that each party must bear her/its own arbitration expenses.

August 30, 2004

David Leitch Arbitrator

Date

Neutral Citation: 2004 ONFSCDRS 125 FSCO A03-000905

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

JOANNE ABELA Applicant

and

WAWANESA MUTUAL 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:

1. Neither party is entitled to recover expenses from the other.

August 30, 2004

David Leitch Arbitrator

Date

Footnotes

1. 1Section 22 of 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.
2. 2R.R.O. 1990, Regulation 664, s. 12.
3. 3Appeal (FSCO P02-00031, May 17, 2004).
4. 4Applicant's Brief for the Expense Hearing, Tab 5.