FINANCIAL SERVICES COMMISSION OF ONTARIO
Neutral Citation: 2004 ONFSCDRS 75
FSCO A02-001401
BETWEEN:
BACHITTAR SINGH
Applicant
and
WAWANESA MUTUAL INSURANCE COMPANY
Insurer
DECISION ON EXPENSES
Before:
William J. Renahan
Heard:
By telephone conference call on May 14, 2004.
Appearances:
Michael J. Gillen for Mr. Singh
Ian D. Kirby for Wawanesa Mutual Insurance Company
Issues:
The Applicant, Bachittar Singh, was injured in a motor vehicle accident on May 10, 2001. In a decision dated October 17, 2003, I dealt with his claims for statutory accident benefits under the Schedule.1 I made certain orders, while reserving on the issue of expenses.
At the hearing, Mr. Singh claimed income replacement benefits over a period of about 34 weeks, in the amount of approximately $15,500, together with interest, a special award and expenses. I awarded Mr. Singh income replacement benefits for four days due to a deficiency in Wawanesa's notice of termination. The parties subsequently agreed that I miscalculated the notice period and that I should have awarded two days in the amount of $57.14. I also found that Wawanesa made payments late and I awarded interest on overdue payments. The parties agreed that the interest amounted to approximately $1,000.
The criteria which apply to determining entitlement to and amount of expenses in this case are set out in Ontario Regulation 664, R.R.O. 1990 as amended by Ontario Regulation 464/96. I set out each criteria with my comments.
- Each party's degree of success in the outcome of the proceeding.
Mr. Singh was successful in recovering approximately $1,000.
- 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.
Both parties conducted themselves in an efficient manner.
- 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.
Neither party took an unreasonable position.
- The degree of complexity, novelty or significance of the factual or legal issues raised in the proceeding.
I found the issue of what information about collateral benefits an insured must furnish its insurer in order to avoid a suspension of benefits under section 33 of the Schedule novel and significant.
- 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.
Four months before the hearing, Wawanesa offered to settle the issues of the arbitration upon a payment to Mr. Singh of $7,500. Mr. Singh rejected the offer. He recovered about $1,000 as a result of my decision. Consideration of settlement offers in determining expenses encourages the parties to resolve disputes on their own. A party who rejects an offer should know that they risk an award of expenses against them if the decision is less favourable than the offer. If I did not place some weight on this criteria, I would discourage settlement proposals.
- 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 decisions2.
However, as noted by Director Draper in Gray and Zurich Insurance Company, (P98-0047, 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.
In, considered the expense criteria, 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
Having regard to all the criteria, I find that Mr. Singh should pay Wawanesa one-half its expenses of the arbitration proceeding.
The hearing lasted three days. The bill of the insurer's expenses includes $3,422 in total fees. With disbursements and G.S.T. the total bill is for $5,037.98. Mr. Gillen conceded that the bill was reasonable except for $916.50 in disbursements for court reporter's fees. Mr. Kirby submitted that court reporter's fees are included under tariff item 4.4 "For other out-of-pocket expenses incurred in furtherance of the arbitration, appeal, variation or revocation hearing." Mr. Gillen argued that since court reporter's fees can be significant, it could not have been the legislature's intention to include them as "other out-of-pocket expenses" when it specifically placed a cap on less costly disbursements such as preparation of an expert witness for a hearing.
I agree that court reporter's fees are not covered as a disbursement in the tariff. I also agree that the bill of expenses is otherwise reasonable.
Mr. Singh shall therefore pay to Wawanesa $2,060.74. Wawanesa may set off the amounts it owes Mr. Singh against this amount.
May 18, 2004
William J. Renahan
Arbitrator
Date
Neutral Citation: 2004 ONFSCDRS 75
FSCO A02-001401
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
BACHITTAR SINGH
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:
- Mr. Singh shall pay Wawanesa $2,060.74.
May 18, 2004
William J. Renahan
Arbitrator
Date
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.
- director's Delegate Naylor in Allison and Markel Insurance Company of Canada, (OIC P-001231, August 21, 1996)