Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2005 ONFSCDRS 120

FSCO A04-000115

BETWEEN:

VICTORIA MSUYA

Applicant

and

BELAIR INSURANCE COMPANY INC.

Insurer

DECISION ON EXPENSES

Before:

Rosemary Muzzi

Heard:

All written submissions received on August 12, 2005, and oral submissions heard by telephone conference on August 15, 2005.

Appearances:

Kellie Siegner for Ms. Msuya

Paul Muirhead for Belair Insurance Company Inc.

Issues:

In a decision dated July 14, 2005, I ordered Belair to pay Victoria Msuya for the services of a weight trainer, twice a week, from January 16, 2003, at the rate of $40 per session. I also ordered Belair to pay for the cost of a psychological assessment. I deferred a decision on expenses, inviting the parties to request an appointment before me should they be unable to agree on expenses. They were unable to agree on expenses and ask that I make an order.

Result:

Neither party is entitled to recover expenses from the other.

EVIDENCE AND ANALYSIS:

Both parties agree that I am to consider the criteria set out in Rule 75.2 of the Dispute Resolution Practice Code in making an award of expenses but mistakenly refer to the criteria as it was listed prior to the October 1993 amendment to the Expense Regulation. Before the amendment, the criteria numbered six and included "any other matter related to the proceeding that the arbitrator considers relevant to the issue of whether an award of expenses is justified."

As it stands now, section 12(2) of the Expense Regulation identifies only these criteria as relevant:

Each party's degree of success in the outcome of the proceeding.
Any written offers to settle made in accordance with subsection (3).
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.

Recently arbitral decisions have stated that the new criteria continue a move toward a more results-based approach to expenses. The specific listed criteria are now the only factors to be considered.

Ms. Msuya asks me to balance the applicant's need for access to relatively inexpensive, speedy and informal adjudication of these disputes with a relatively mild deterrent to undeserving claims or undesirable behaviour. She argues, in general, that it is appropriate to award her expenses because her claim for treatment was legitimate, the pursuit of her claim was sincere and her conduct did not unreasonably prolong the proceedings.

Belair argues that the only applicable criteria to this case are the first and second enumerated, the parties' degree of success in the outcome of the proceeding and an offer to settle which it made to the applicant on July 7, 2004. Belair appears to argue that Ms. Msuya was only successful in one of four of the substantive issues decided because Belair assumes that I was incorrect in finding an entitlement to weight training expenses. Consequently, Belair argues, she would not be entitled to the award as it stands now. With respect to payment of the psychological assessment, which Belair concedes that Ms. Msuya won, because the claim had originally been for $2,975 where the actual cost of the assessment was only $857, Belair argues that Ms. Msuya's success was marginal. When these factors are combined with the fact that Belair offered to settle the case for $5,000, I should find either that each party should bear its own costs with the insurer recovering its assessment cost of $3,000, or that Ms. Msuya should pay Belair's costs.

Neither party made submissions indicating that it disputed the actual assessment of the other's claim for expenses.

I find that each party should bear its own expenses.

In my view, each party was successful in part. The treatment plan at issue called for three different types of therapy, only one of which I found to be reasonable and necessary for Ms. Msuya, having regard to the particular circumstances of her case. Whether the cost of the psychological assessment was $2,900 or only $875, Ms. Msuya was successful in satisfying me that this expense was a reasonable one that Belair should bear. On the other hand, Belair was successful in responding to Ms. Msuya's case in so far as her claims to chiropractic and massage therapy were concerned. No aspect of the proceeding was improper, vexatious or unnecessary and both parties had a reasonable chance at success, given the issues and evidence. There was no conduct on the part of any party or representative that prolonged, obstructed or hindered the proceeding so this factor is of no relevance. Belair's offer to settle the case on a full and final basis for $5,000 also bears little on the issue of expenses given my decision on the merits.

I have no authority to consider other factors.

Therefore, based on the criteria listed in the Expense Regulation, I find that each party must bear its own expenses.

Further, with respect to its final request, Belair's $3,000 assessment cost is not a recoverable expense under the Expense Regulation. Section 282(11) of the Insurance Act states that an arbitrator may award all or part of expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations. There is no provision in the Expense Regulation for an award of the assessment fee paid by the insurer.

August 29, 2005

Rosemary Muzzi Arbitrator

Date