Neutral Citation: 2005 ONFSCDRS 29
FSCO A01-000858
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
MARINA BERSHTEYN
Applicant
and
ALLSTATE INSURANCE COMPANY OF CANADA
Insurer
DECISION ON EXPENSES
Before:
John Wilson
Heard:
November 19, 2004, at the Offices of the Financial Services Commission of Ontario in Toronto.
Written submissions were received on November 19, 2004.
Appearances:
Roland Spiegel for Ms. Bershteyn
Richard F.L. Rose for Allstate Insurance Company of Canada
Issues:
The Applicant, Marina Bershteyn, was injured in a motor vehicle accident on December 21, 2000. In a decision dated May 28, 2004, I dealt with her claims for statutory accident benefits under the Schedule.1 I made the following orders, while reserving on the issue of expenses:
Ms. Bershteyn is not entitled to reimbursement for the disability certificate.
Allstate is entitled to its expenses against the nominal applicant, Ms. Bershteyn which shall be payable by Mr. Spiegel.
Ms. Bershteyn is not entitled to her expenses in this matter.
The issue in this further hearing is:
What is the amount of the expenses that Mr. Spiegel is obliged to pay on behalf of Ms. Bershteyn?
Result:
Pursuant to section 282(11.2) of the Insurance Act, Mr. Spiegel, as representative of record of Ms. Bershteyn, is ordered to pay personally the amount of $5,033.82 to Allstate as its assessed expenses in this matter.
EVIDENCE AND ANALYSIS:
The original two-day hearing involved a potential benefit that totalled less than $100. It was the culmination of a series of pre-hearings and hearings, including an appeal to the Director of Arbitrations and allegations of institutional bias. In the mind of the principal architect of this claim, however, this arbitration raised important legal and consumer protection issues relating to Allstate's refusal to fund a supplementary disability certificate that the Insurer viewed as both inappropriate and of dubious reliability.
I found unequivocally for Allstate in this matter, and ordered that it be paid its expenses.
Ms. Bershteyn, the nominal applicant in this matter, did not take part in the proceedings, and was not present for the hearing of this matter. Indeed, the Insurer raised unanswered questions concerning the validity of her signature on certain documents leading to this hearing. Essentially, this matter was a dispute between Allstate and Mr. Spiegel, a paralegal who, from time to time, represents applicants and treatment providers in this forum.
While I recognized that Ms. Bershteyn as nominal applicant may have some responsibility for any expense order, in view of her lack of participation in this process I placed the following condition on my order:
Should Allstate wish to enforce any expense order against Ms. Bershteyn herself, it shall first serve her personally with its bill of expenses and a copy of my order, and provide her with an opportunity to make submissions as to her actual role in this matter.
No evidence was provided at the hearing of compliance with the condition of personal service on Ms. Bershteyn. Consequently, any resulting order shall be enforceable only against Mr. Spiegel.
Mr. Rose did file his bill of expenses, which Mr. Spiegel acknowledged receiving.
The quantum of expenses chargeable is governed by Regulation 664, R.R.O. 1990, as well as Rule 78 of the Dispute Resolution Practice Code.
The combined effect of the two provisions is that counsel for an insured is entitled to a maximum hourly rate equal to the legal aid rate applicable to actions in the Ontario Superior Court of Justice. At present, that rate for tier 3 counsel, the most senior, is $92.34 per hour.
In his bill of expenses, Mr. Rose has claimed an hourly rate of some $101.57, which is the rate for tier 3 counsel in designated regions of Northern Ontario. The hearing in question took place at the offices of the Financial Services Commission in Toronto, and Mr. Rose's office is also located in Toronto. Consequently, his billings must be reduced by $9.23 per hour, plus GST.
The expenses claimed, including disbursements and GST, totalled $9,039.72. Of this amount, some $3,000 was identified as an assessment fee pursuant to section 282(11.2) of the Insurance Act. That section now refers to the award of expenses against representatives, and does not authorize the reimbursement of any assessment fee.
While there may possibly be some justification for claiming an assessment fee as a necessary disbursement of an arbitration proceeding, there is no claim for such a disbursement. Patently, I have no jurisdiction to award a repayment of the fee in the manner claimed. Consequently, I disallow the claim for $3,000, and reduce the bill accordingly.
Mr. Rose also claims the amount of $1,151.44 ($1,076.12, plus GST of $75.32), being the expenses ordered on December 31, 2002 by Arbitrator Sandomirsky as a condition to withdraw the application. While the application was not withdrawn, it is possible to assume that Mr. Rose intended that this represent a global figure for expenses incurred prior to Arbitrator Sandomirsky's order.
The claim, while poorly framed, does not appear to duplicate those expenses outlined in the current bill of expenses and, in the absence of substantive objections from Mr. Spiegel, stands.
In addition to the hours billed earlier (which are already subject to Arbitrator Sandomirsky's order) Mr. Rose has billed some 31.6 hours to bring this matter to hearing. At the accepted rate for senior counsel, this would amount to some $2,917.94, rather than the $3,209.62 actually billed. I find that this amount of $2,917.94, plus GST of $204.26, should be payable by Mr. Spiegel.
Likewise, I find the list of disbursements in the amount of $1,084.28, plus GST of $75.90, acceptable, and rightly payable by Mr. Spiegel.
As noted above, however, I have some reservations about the way that items in this expense claim were presented. This extraordinary expense order recognizes that Mr. Spiegel has dragged Allstate and Mr. Rose through extensive litigation over what was essentially a frivolous issue.
While I must accept that Mr. Rose and his client were entitled to feel a certain level of frustration with both Mr. Spiegel and the process, such frustration is no justification for obviously padding the account that Mr. Spiegel will be obliged to pay.
By the time that the bill of expenses was drawn up and served by Mr. Rose, it should have been apparent that the claim for a return of the assessment was incapable of success, since it lacked any legislative basis. By any token, its claim was as frivolous and vexatious as Mr. Spiegel's claim for the section 24 expense that started this process.
Likewise, Mr. Rose's claim for an hourly amount, applicable only to Northern Ontario, is something that an experienced counsel should have known was incorrect. The legal aid tariff is widely available, and should be familiar to counsel appearing frequently at FSCO, since it is the basis of expense orders at the Commission.
In accordance with Rule 75.2(e), therefore, I order that bill of expenses be reduced by a further $400 in recognition of the less than frank manner in which the expenses were presented. Consequently, Mr. Spiegel is obliged to pay forthwith to Allstate $5,033.82, inclusive of GST as its assessed expenses in this matter.
March 8, 2005
John Wilson
Arbitrator
Date
Neutral Citation: 2005 ONFSCDRS 29
FSCO A01-000858
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
MARINA BERSHTEYN
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:
Pursuant to section 282(11.2) of the Insurance Act, Mr. Roland Spiegel, as representative of record of Ms. Bershteyn, is ordered to pay personally the amount of $5,033.82 to Allstate as its assessed expenses in this matter.
March 8, 2005
John Wilson
Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.