Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2005 ONFSCDRS 109

FSCO A02-001360

BETWEEN:

RUBAN THANGARASA

Applicant

and

GORE MUTUAL INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before:

John Wilson

Heard:

December 8, 9, 10 and 11, 2003, May 31 and June 1, 2004, and June 28, 29 and 30, 2004 and June 20, 2005, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Linda Wolanski for Mr. Thangarasa

Anna-Marie Castrodale for Gore Mutual Insurance Company

The Applicant, Ruban Thangarasa, was injured in a motor vehicle accident on March 31, 1998. He applied for and received statutory accident benefits from Gore Mutual Insurance Company ("Gore Mutual"), payable under the Schedule.¹ Gore Mutual terminated weekly income replacement benefits and the parties were unable to resolve their disputes through mediation, and Mr. Thangarasa applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended. An arbitration hearing was held December 8, 9, 10 and 11, 2003, May 31 and June 1, 2004, and June 28, 29 and 30, 2004, at the offices of the Financial Services Commission of Ontario in Toronto, and an interim decision was issued on April 1, 2005. Further submissions were received on June 20, 2005.

The issues in this hearing are:

What amount is Mr. Thangarasa is entitled to receive as arrears of his weekly income replacement benefit from February 5, 2001, until April 1, 2005 as claimed pursuant to section 4 of the Schedule?
What amount is Mr. Thangarasa is entitled to receive as arrears of his weekly income replacement benefit from February 5, 2001, until April 1, 2005 as claimed pursuant to section 4 of the Schedule?
What amount is Gore Mutual liable to pay as a special award pursuant to subsection 282(10) of the Insurance Act because it unreasonably withheld or delayed payments to Mr. Thangarasa?
Is Gore Mutual liable to pay Mr. Thangarasa's expenses in respect of the arbitration under section 282(11) of the Insurance Act and, if so, what is the quantum to be awarded?
Is Mr. Thangarasa liable to pay Gore Mutual's expenses in respect of the arbitration under section 282(11) of the Insurance Act and, if so, what is the quantum to be awarded?

Mr. Thangarasa is entitled to an amount of $64,177 as past-due weekly income replacement benefits owing from February 5, 2001 to April 1, 2005 (the date the award was originally made), as claimed pursuant to section 4 of the Schedule. Mr. Thangarasa is entitled to continue to receive $340.53 as the amount of weekly income replacement benefit pursuant to section 6 of the Schedule from April 1, 2005
The parties have agreed that the amount of interest payable as of April 1, 2005 is $48,096.
Gore Mutual is liable to pay a special award pursuant to subsection 282(10) of the Insurance Act because it unreasonably withheld or delayed payments to Mr. Thangarasa, in the amount of $39,295.
Gore Mutual is ordered to pay Mr. Thangarasa's expenses in respect of the arbitration under section 282(11) of the Insurance Act which I have fixed at $42,908.
Mr. Thangarasa is not liable to pay Gore Mutual's expenses in respect of the arbitration under section 282(11) of the Insurance Act.

Background:

Mr. Ruban Thangarasa was born in 1972 in Sri Lanka, the oldest of four children. Around 1995 he left Sri Lanka to join the growing Tamil diaspora, ultimately arriving in Canada. Following his arrival here he worked at a variety of jobs, finally ending up working as a general labourer at Teknion Furniture Systems, an office furniture manufacturer.

In addition to his factory work, Mr. Thangarasa began a part-time business renting out videos, principally to the Tamil community.

On December 8, 2003, I began to hear the arbitration arising out of Mr. Thangarasa's 1998 motor vehicle accident. Following the completion of the scheduled hearing days, I issued an interim decision which recognized an ongoing entitlement to income replacement benefits. I requested further submissions on various issues.

I also found that I had insufficient documentation to fix the exact amount of the special award which I tentatively located in the higher end of the permissible spectrum.

Largely, this latter portion of the hearing was about setting the amount of the special award and fixing the amount of expenses payable.

The parties were able to agree on many issues including calculation of interest and the total quantum of benefits. They were also able to agree on the issue of an award of expenses, but were unable, as in the case of the special award, to reach a consensus on quantum.

Amount of Outstanding Income Replacement Benefits

The parties have now agreed that the amount of income replacement benefits outstanding as of April 1, 2005 is $64,177.

Amount of Interest Outstanding

The parties have agreed that the amount of interest payable as of April 1, 2005 is $48,096. Interest continues to run at the statutory rate of 2% per month, compounded monthly, as long as provided for by section 46(2) of the Schedule.

Since section 3(1) of the Schedule provides for statutory accident benefits to "be provided under every contract of insurance", it follows that any delays in honouring the payment obligations²should continue to attract the interest rate provided for in the contract, even after the decision has been rendered, until paid.³

Amount of Special Award

At the beginning of the hearing, the parties were reminded that the issue of the quantum of special award was still open. The 40% remark contained in the interim decision was an indication of the apparent seriousness of the conduct as it appeared to me at that time and nothing more. Subsection 282(10) of the Insurance Act provides the legislative foundation for special awards against insurers.

If the arbitrator finds that an insurer has unreasonably withheld or delayed payments, the arbitrator, in addition to awarding the benefits and interest to which an insured person is entitled under the Statutory Accident Benefits Schedule, shall award a lump sum of up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule.

As noted, an arbitrator's discretion with regard to a special award relates mainly to the quantum. The Insurance Act mandates such an award once there is a finding that benefits were unreasonably withheld. Once such a finding is made, the only element of discretion is as to the amount of the award that an arbitrator decides is appropriate to the conduct in question. The amount can vary from a token dollar amount to a maximum of 50% of outstanding benefits including interest.

The Insurer has taken the position that, if a special award must be made, the amount should be minimal, since it claims that it was entitled to rely upon the opinions of experts, including members of the DAC teams, that Mr. Thangarasa was not entitled to benefits. It also points out the it was not advised and had no reason to suspect that Mr. Thangarasa's employment in the video store following the accident amounted to a sheltered workshop and could not be considered as competitive employment.

Mr. Thangarasa, on the other hand, believes that the overall conduct of the Insurer, in terminating benefits as it did, in the face of contradictory knowledge that challenged its position, breached the duties owed by an insurer to its insured and should have its actions characterized as egregious by the award of the maximum amount permitted. He conceded, however, that he would view the imposition of a 40% special award, as suggested in my interim decision, as a reasonable outcome.

I have already stated in an earlier observation that my initial impression was that the actions of the Insurer would probably justify a special award in the upper end of the spectrum. The parties have agreed that the total of outstanding benefits and interest at the time of my decision was $112,273 - 50% of this amount, $56,136, defines the upper limits of any special award.

My conclusions in my interim decision focussed on the actions of the Insurer in denying Mr. Thangarasa's claim in the face of evidence that the Insurer's fundamental assumptions might not be tenable. My reasons were summarized as follows:

I prefer to focus on the vast, and generally consistent, range of evidence of Mr. Thangarasa's impairments and disabilities that it had collected, and had available to it at a time when it chose to rely on the few, weak opinions which flew in the face of this collective wisdom.

In the overwhelming presence of credible evidence in support of Mr. Thangarasa's ongoing cognitive impairment, I find that it was not reasonable to cease paying income replacement benefits at the time Gore gave notice.

The calculation of the amount of a special award is more art than science. Having heard the further submissions of both parties, I am not inclined to change my initial impression that the Insurer's position on the termination of benefits was untenable.

As noted in the earlier decision, there has been much discussion about the nature of special awards. In particular, the current Director of Arbitrations in Persofsky attempted to establish the parameters of this unique remedy. He stated:

The purpose of s. 282(10) is to punish insurers that unreasonably fail to pay accident benefits promptly, as required by the SABS, and to deter that company and others from acting similarly in the future. The size of the special award should be aimed at that purpose. While I am not prepared to say that special awards must be "modest," whatever that means, it is not obvious that they should exceed the amounts typically awarded in bad faith claims involving more serious misconduct.⁴

While this analysis appears to focus particularly on the "bad faith" aspect of a special award, there are other important considerations that enter into the crafting of a special award. It should be remembered that the legislature has specifically mandated a wider and less focussed mandate for special awards than bad faith alone. In fact, the conduct of the insurer⁵ may be a lesser consideration than the effect on the insured of the withdrawal of benefits, provided only that the pre-condition that "an insurer has unreasonably withheld or delayed payments" has been met.

The purpose of the accident benefit legislation has been characterized as follows by Cameron J. in Youden v. Economical:

This is remedial legislation. The "no fault" legislation deprived the plaintiff of his common law right to sue for damages for loss of income due to another's negligence. The Regulation provides for prompt payment of an income benefit to replace income lost due to the accident without need to prove fault and in lieu of any amount the plaintiff might have been awarded and recovered at common law.⁶

Likewise, Gonthier J., in Smith v. Co-operators General Insurance Co., speaking in connection with an accident benefit matter, stated:

There is no dispute that one of the main objectives of insurance law is consumer protection, particularly in the field of automobile and home insurance.⁷

A key concept in accident benefits is "prompt payment of an income benefit." This is reflected in the wording of section 282(10) dealing with special awards. The lack of prompt payment is not only undesirable under the scheme of the Act, but also frequently has serious ramifications for the insured as well.

One does not have to read many arbitration decisions to extract the information that a significant portion of the "clientele" claiming accident benefits is drawn from the less privileged portions of society. There is a strong representation of recent immigrants, and persons with low income or limited attachment to the work force.⁸ Similarly, Mr. Thangarasa's fragile economic roots and his position as a recent immigrant inevitably made him more vulnerable to arbitrary actions by his insurer.

As Arbitrator Blackman stated in Murray and Wawanesa Mutual Insurance Company,⁹ "The effect of the Insurer's unreasonable withholding or delaying of payments on the Applicant is also a factor to be taken into consideration in making a special award."

Indeed, in Persofsky, the Director actually recognized this element in setting a special award.

To paraphrase, the award should be proportionate to: (i) the blameworthiness of the insurer's conduct; (ii) the vulnerability of the insured person; (iii) the harm or potential harm directed at the insured person; (iv) the need for deterrence; (iv) the advantage wrongfully gained by the insurer from the misconduct; and (vi) should take into account any other penalties or sanctions that have been or likely will be imposed on the insurer due to its misconduct. [emphasis added]

It is clear that the Director's list of elements to be considered in assessing a special award are not listed in any order of importance, nor is one a pre-condition for moving on to a consideration of the applicability of the next on the list.

In the context of the Act - reflecting the scheme of the Act as identified above -¹⁰ addressing the consequences to an insured of undue delay is at least as important as an examination of considerations of blameworthiness or intent to delay or frustrate the insured.¹¹

Since I have found no evidence of any concerted plan to deprive Mr. Thangarasa of his rightful benefits, nor of any fabrication of evidence, the analysis of this special award must necessarily focus on the quality and the effect of the decisions taken by Gore.

Vulnerability:

Prior to the accident, Mr. Thangarasa's un-contradicted evidence was that he was a hard worker, holding down a full-time labouring job at the same time as attempting to establish a video rental business. Following the accident his physical and ability to multi-task was much more limited. Dr. Doxey, in his testimony, commented on Mr. Thangarasa's post-accident employment.

I did note, however, that he had, approximately a year after the accident, returned not to the job at the factory, he couldn't do that, and apparently there is compelling medical support for him not being able to do so, but he had managed to return to his job as -- running his -- or working in his video business. However, because of his fatigue, he had never been able to increase his hours beyond six per day. And this is a man who used to work two full-time jobs, including across weekends. And he had never been able to return in more than an assistive capacity. His brother had basically taken over management, not only of the business but, in a sense, management of Mr. Thangarasa himself. And I believe, when I first saw him, he still had a friend who would help out in the business. So he was working in a kind of assistive sheltered capacity in his video store, and felt at that time that this was about as good as he was going to get.

In his September 21, 2003 report, Dr. Doxey stated:

With respect to issues pertaining to his employability, our opinion remains unchanged from when we last saw him. We continue to believe that he will never be able to work as a factory labourer again, nor, for that matter, ever again perform heavy physical work of any kind. His functional capacity, and hence his working capacity, has not improved, and he is still unable to work more than six hours per day in his store, and he still is unable to assume any managerial or ownership responsibilities. He continues to be limited by his poor endurance and stamina. We continue to believe that his physical restrictions, secondary to his orthopaedic injuries, are the cause of his inability to perform his former factory job or other physically demanding work, and we continue to believe that the erosion of his employability in non-physically demanding areas, such as running his store, is more attributable to his closed head injury and to his quite severe executive functioning deficits and fatiguability.

When Gore terminated income benefits to Mr. Thangarasa, he was particularly vulnerable. He remained physically unable to resume the physically challenging work that had constituted his principal employment and income prior to the accident.

He possessed limited alternative skills which, in turn, were circumscribed by his limited English skills and the lingering sequelae of the head injury. But for the generosity of his brother the video business would have failed¹², and he would have had no means of paying for food and lodging.

Assuring even the survival of the business, however, meant the loss of ownership and control of the video business he had founded.

Gravity of the Conduct of the Insurer:

In the earlier decision I found that:

It is striking just how much information the Insurer had, and how diligent it had been in amassing that information from all sources, up to and including the date of termination. Yet it chose to rely, to the exclusion of all others, on those few reports that favoured its position.

I also commented:

I do not accept that Gore continued to treat Mr. Thangarasa fairly throughout all his qualification period. While there are possible inferences that may be drawn from the apparent failure of Gore to send Dr. Reznek reports that were unfavourable to its position, and its puzzling refusal to retain Dr. Scher for a second IME, or the circumstances surrounding the termination of Ms. Dies' OT services, I prefer to focus on the vast, and generally consistent, range of evidence of Mr. Thangarasa's impairments and disabilities that it had collected, and had available to it at a time when it chose to rely on the few, weak opinions which flew in the face of this collective wisdom.

While I pointedly did not find any evidence of malice nor of an intention to fabricate a case against Mr. Thangarasa, implicit in my finding is a conclusion that Gore and its employees inexplicably ignored consistent, credible evidence that would support Mr. Thangarasa's ongoing disability in favour of lesser evidence that would support termination of benefits.

In R. v. Sansregret¹³, the doctrine of wilful blindness was outlined.¹⁴

...wilful blindness arises where a person who has become aware of the need for some inquiry declines to make the inquiry because he does not wish to know the truth. He would prefer to remain ignorant. The culpability in recklessness is justified by consciousness of the risk and by proceeding in the face of it, while in wilful blindness it is justified by the accused fault in deliberately failing to inquire when he knows there is reason for inquiry.

Of course, wilful blindness is not strictly a criminal concept. In Fidler v. Sun Life Assurance Co. of Canada¹⁵, Finch C.J.B.C found that, in an action for punitive damages, wilful blindness could be the equivalent of malice or intent in founding a claim.

I accept that the insurer's conduct may not evidence "malice" if by that is meant conduct deliberately or intentionally designed to inflict harm. But at the very least, Sun Life was wilfully blind to its good faith duty and the consequences of a breach of that duty on the insured.

In my earlier decision, I pointed to several key notations contained in the Insurer's own file notes that suggested that available and probative information was ignored or discounted by Gore. I commented:

I based this observation, inter alia, on the following circumstances, which, from the Insurer's records filed, one can clearly infer knowledge:

It would have known that Mr. Thangarasa was in a serious accident and sustained a closed head injury. It would have known the contents of his hospital records and the opinions of Drs. Oryema and Ouchterlony, all of which accepted the seriousness of his head injury.
It would have known that Dr. Freedman's report was premised on minimising the severity of the head injury suffered by Mr. Thangarasa, and ignoring his own low test scores.
It would have also known that Dr. Reznek made his psychiatric conclusions based on limited exposure to other medical reports, since the Insurer neglected sending him many relevant, available, reports, including that of Dr. Scher.
It would have known that there was a major difference of opinion between Dr. Scher and Dr. Freedman concerning Mr. Thangarasa's disability, a fact its own adjusters had commented on in their notes.
It would have known that there was also a great divide between Mr. Thangarasa's treatment providers and Drs. Freedman and Reznek concerning the seriousness and duration of Mr. Thangarasa's disability and his employability.
It would have known that Ms. Dies, the O.T. who had worked closely with Mr. Thangarasa, in trying to integrate him into work, strongly disagreed with the Insurer's opinion that there were no cognitive impairments.
It would know that despite the efforts of private investigators and much, repeated surveillance, they had been unable to catch Mr. Thangarasa out doing things inconsistent with his stated condition. Nor did it find anything "funny" about his employment or his claim.

The termination of Mr. Thangarasa's benefits, in the face of this knowledge, could easily be construed as a situation where "a person who has become aware of the need for some inquiry declines to make the inquiry because he does not wish to know the truth¹⁶" or, in other words, wilful blindness.

This is made even more clear when examined in the context of an insurer's obligation to fairly investigate any claim by its insured. As noted in my earlier interim decision at footnote 35:

(A) n insurer in fulfilling its contractual obligations may give consideration to its own interests. However, the insurer must give as much consideration to the welfare of the insured as it gives to its own interests.¹⁷

Gore has repeatedly stated that it was entitled to rely on the DAC assessment that supported its decision. It submits that it cannot be faulted for reliance on an officially sanctioned assessment process.

During the hearing I heard and accepted evidence that individual DAC assessors may have had weaknesses in logic and evaluative techniques, or relied on faulty assumptions. I also accepted that the DAC may not have fully carried out the spirit of consultation that should characterize such a multi-disciplinary report. A special award, as I noted, is not made against a DAC, but against the insurer for unreasonably failing to pay the benefits owed.

As noted earlier, there is some logic to assuming that an insurer should not be found to be acting unreasonably if what it is doing is in accordance with the conclusions of the DAC assessors and their report. A DAC report, however official, is just that - a report. Its conclusions are not interim orders shielding parties from all and any claims of interest, nor, indeed, claims for special awards.

I found, however, that there were patent flaws in the DAC that should have stimulated some enquiry by Gore.

I also found that given the specific knowledge and the expertise which must be attributed to Gore's adjusters, there were other problems that should have raised red flags for them.

An adjuster in reading the DAC recommendations should be required to consider them in the context of all the evidence available to it on Mr. Thangarasa's disability. He or she should know that the consensus of treating practitioners was that Mr. Thangarasa had suffered an important closed head injury, and was observed to have significant, long-term cognitive impairments. He or she should have been aware that cognitive impairment was and is the critical element of Mr. Thangarasa's disability. Consequently, the Insurer should have carefully read the DAC assessment, and particularly Dr. Morris' report before deciding on whether or not to rely on its conclusions.

Such an examination would include looking at the assumptions made by the examiners to see whether they are in accord with the available evidence, and checking that the conclusions and recommendations are consistent with the observations of other examiners when the conclusions straddle one or more disciplines.¹⁸

Had Gore made these necessary further enquiries, the dissonances in the DAC reports and the IE reports relied upon would have been apparent.

Since the beginning of special awards at the Commission, efforts have been made to pin down the basic standard of reference for the conduct of an insurer's adjuster in handling a claim.

In Plowright¹⁹, Arbitrator Palmer enunciated the classic statement of an insurer's standard of conduct in dealing with accident benefits:

The standard expected of an insurer's examiner and her supervisors is one of sound and moderate judgment.

I have already found that Gore's file handling did not meet this standard.

Likewise Senior Arbitrator Rotter in Erikson²⁰ clarified the parameters for placing the conduct of an insurer in the spectrum of a special award:

I find that the criteria for punitive damages, that is wilful and deliberate misconduct or bad faith, goes considerably beyond the Insurance Act standard of simple unreasonableness. It is clear that conduct may be unreasonable, but still not deliberately or wilfully injurious, or motivated by bad faith. I find that wilful or deliberate misconduct or bad faith are additional factors in the conduct of the Insurer, beyond unreasonableness, which should be taken into consideration when assessing the quantum of a special award.

It is interesting to note that the British Columbia Court of Appeal in Fidler²¹ found wilful blindness to be equivalent to malice in founding an award of punitive damages. Given my finding that the glossing over of difficulties in this file, and the continuation of the relentless progress towards termination in the face of "red flags" in the form of information that contra-indicated termination, constituted wilful blindness, then Gore's conduct could rightly be seen to merit the upper end of the scale of a special award as envisaged in Erikson (supra).

Quantum of order

Acknowledging that there were DACs, however flawed, which supported the Insurer's position, and that Mr. Thangarasa's own overly-optimistic reports of his own progress in the video store may have influenced the Insurer's conduct, I reduce the award some 15% from the maximum permissible under the Schedule. Based on the numbers agreed to by the parties, the quantum of the special award would be $39,295, as of April 1, 2005.

The Director in Persofsky²² outlined the following caution concerning the relative amounts of special awards:

In my view, there should be some relationship between special awards and the level of damages awarded in bad faith claims. Arbitration and the courts are alternative forums for dealing with disputes about entitlement to accident benefits, including insurer misconduct. While the remedies differ in important respects, the conduct under review can be similar and the purposes for imposing a penalty overlap. Any court decision quantifying punitive damages on a principled basis will be of interest, particularly if it involves accident benefits. The most productive approach, in my opinion, is for arbitrators and judges to exercise their discretion within their particular authority, but with an eye on the approach taken in the other forum.²³

"Keeping an eye" on broadly similar circumstances, in Fidler²⁴ the British Columbia Court of Appeal awarded $100,000 as punitive damages, plus $20,000 aggravated damages. Likewise, in much more egregious circumstances, the Supreme Court in Whiten²⁵, confirmed an award of $1,000,000 made for punitive damages alone. Within those parameters, a special award of $39,295. seems unexceptional.

EXPENSES:

No offers to settle having been brought to my attention, it is appropriate that Mr. Thangarasa should have an award of expenses made in his favour. He was successful on all issues in this arbitration, and carried on with the arbitration in such a manner as to avoid any finding that would disentitle him to costs. He is entitled to have his expenses paid by the Insurer.

Ms. Wolanski filed a bill of costs, and both parties made submissions on its appropriateness. The total amount claimed was $53,908.24, including fees, disbursements and G.S.T.

The traditional approach to dealing with expenses at the Commission has not been to deal with the Bill of Costs on a line by line basis. At times this is difficult to avoid, when, as in this case, a party makes principled objections to specific disbursements based on monetary limits contained in the Practice Code.

What is payable as expenses?

The Expense Regulation uses the term "expenses" instead of the more usual word "costs" in the context of a reimbursement of legal expenses incurred by a party to an arbitration. While "costs" generally refers to the practice of providing an allowance to a successful party, based on known scales or tariffs, to indemnify him or her for some of the expenses incurred, "expense" seems to have a more simple meaning. The Canadian Oxford Dictionary describes "expense" as:

1 cost incurred; payment of money. 2 a costs incurred in doing a particular job etc. (will pay your expenses) b an amount paid to reimburse this....

Clearly, the legislature in using the word "expense" meant to indemnify a party for its actual incurred expenses up to any statutory limit.

Rule 78 of the Practice Code provides for maximum amounts to be allowed for legal services, based on the legal aid tariff, and an exception for experienced applicant's counsel, limits on the fees to be charged by expert witnesses for reports, and for the transportation and preparation of expert witnesses. The limits with regard to legal fees do not form part of either the primary or subsidiary legislation.²⁶ They exist, rather, as a presumptive guideline, subject to the ultimate discretion of the arbitrator to set aside under the wide-ranging provisions of Rule 81. There is no such flexibility permitted, however, with regard to charges for expert testimony and reports.

Although the length and complexity of this hearing and the critical role played by the evaluations might have justified going beyond the normal parameters for an expense award, I received no request to dispense with the application of the relevant rule to permit an award in excess of the amounts set out by the Practice Code.

That being said, I accept that the hourly rates claimed for Ms. Wolanski and Mr. Bogoroch are in the appropriate range. Both are experienced lawyers, appropriately removed in time from the year of their respective calls to the bar. No justification, however, was given for claiming the $150 per hour rate for Emma Holland, a much more junior lawyer.

The disbursements for expert witnesses and reports are also problematic. For example, the amount listed for Kaplan and Kaplan totals some $13,078.21. The attached bills seem to indicate that $3,300 of this amount represents professional fees for Dr. Kaplan, being the assessment of Mr. Thangarasa, the preparation of his report and the preparation and attendance at the hearing. A further $400 was billed for an O.T., plus the reasonable costs of a translator.

While Dr. Kaplan's work was important to Mr. Thangarasa's case, the amount recoverable in expenses should be relative to the preparation of his report, the preparation for hearing, and his presence for a day of hearing. I am prepared to allow a maximum of $4,600 for these expenses, and would disallow the balance of Dr. Kaplan's account.

Likewise, Dr. Doxey's account of $6,375.16 is restricted to about $5,200 for the preparation of two reports, preparation for the hearing and for his availability to testify at the hearing.

Ms. Castrodale also made a point of objecting to the charges for Quicklaw use, since she pointed out that arbitration decisions are available free of charge on-line. Accident benefits are dealt with both by the courts and by arbitrators. Some of the most important recent decisions in this area have been issued in the context of court proceedings.²⁷ Arbitrators, as non-judicial decision-makers, are influenced by and, indeed, bound by relevant decisions of section 96²⁸courts.²⁹

It is in the nature of arbitration that counsel are expected to be well-prepared and in a position to speak authoritatively and succinctly on the issues in arbitration. Parties may be subject to cost penalties if their conduct tended to delay the arbitration process. Not being on top of the relevant jurisprudence would, especially in a complex matter such as this, have such an effect. It is entirely appropriate that Quicklaw charges incurred be payable as a necessary disbursement.

Without doing a detailed analysis of the bill of costs presented, I would fix the Applicant's costs at $42,908, including GST, which represents an adjustment of some $11,000 downward to account for the matters discussed above.

August 9, 2005

John Wilson Arbitrator

Date