Neutral Citation: 2005 ONFSCDRS 65

FSCO A03-001063

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

SIVAHARAN KULASEKARAMPILLAI

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before:

Susan Sapin

Heard:

April 22, 2005, via teleconference at the Offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

David S. Wilson for Mr. Kulasekarampillai

Jonathan B. Schrieder for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Sivaharan Kulasekarampillai, was injured in a motor vehicle accident on December 18, 2002. A hearing was held before me on August 19, 2004 and in a decision dated December 24, 2004, I disposed of his claims for statutory accident benefits under the Schedule,¹and found he was entitled to his reasonable expenses of the arbitration proceeding. State Farm disputes the amount claimed for legal fees.

The issue in this further hearing is:

What is the amount of legal fees to which Mr. Kulasekarampillai is entitled?

Result:

Mr. Kulasekarampillai is entitled to legal fees of $12,517.50 plus GST of $876.23 as claimed, plus legal fees of $225 with GST of $15.75, totalling $13,634.48.

REASONS:

Mr. Kulasekarampillai's legal fees consist of 83.45 hours of legal services provided to him by his legal counsel Mr. Wilson at an hourly rate of $150, for a total of $12,517.50, as set out in the Bill of Costs prepared by Mr. Wilson and submitted to State Farm.

State Farm submitted that the proper assessment of Mr. Kulasekarampillai's expenses is 55.3 hours at the rate of $120 per hour for total fees of $7,110.52.

State Farm submitted that the 30.2 hours it calculated Mr. Wilson spent preparing for the hearing was excessive because the hearing itself only lasted five hours in total and did not involve complex factual or legal issues. It submitted that a ratio of ten hours of preparation time to five hours of hearing, or 2:1, for a total of 15 hours, was reasonable. It further submitted that, as Mr. Wilson is a senior counsel experienced in SABS issues, an hourly rate of $120 was appropriate.

I do not agree. The original hearing on the merits was scheduled for four days. As noted in my decision, twelve days before the hearing, State Farm unilaterally reinstated Mr. Kulasekarampillai's IRB's, but at a lesser weekly rate than that claimed by the Applicant. By then, Mr. Wilson had already prepared for the hearing. State Farm also attempted, unsuccessfully, to obtain an adjournment, for which Mr. Wilson was required to prepare and attend. As State Farm would not agree to an Order for ongoing IRBs and housekeeping benefits after reinstating benefits, and disputed Mr. Kulasekarampillai's claim for a special award, Mr. Wilson was required to prepare and attend for the hearing in question to obtain a determination of those issues.

All of this work is reflected in Mr. Wilson's Bill of Costs. Under subsection 282(11) of the Insurance Act, an insured person who is awarded expenses is entitled to legal fees for all services performed before an arbitration, beginning with the filing of the Application for Arbitration and including costs associated with the pre-hearing. Having reviewed the Bill of Costs submitted by Mr. Wilson, and in the circumstances of this hearing, I find he has claimed what his client is entitled to, and the costs are reasonable.

As there can be no dispute that Mr. Wilson qualifies as a senior counsel with considerable experience and expertise in representing clients in SABS matters before this tribunal and in the courts, I fail to see how one could justify an hourly fee of less than the maximum permitted for senior lawyers under the Legal Aid tariff. Certainly no compelling reason was put forward by State Farm.

State Farm further submitted that the 20.4 hours Mr. Wilson claimed for correspondence sent and received at the rate of .2 hours per letter, should be reduced by half, reducing the legal fees for that category from $3,060 to $1,224, on the basis that the "industry standard" for billing clients for letters is .1 hours. I was provided with no evidence of what constitutes the "industry standard." Although I accept that some letters require more time and effort than others, I do not find it unreasonable to use an average of .1 or .2 for letters, and it is not the practice of FSCO arbitrators to engage in an item by item analysis in order to determine whether work was billed at a reasonable hourly rate.

Lastly, State Farm submitted that the fees claimed for three specific items mentioned should be reduced from $1,125 (7.5 hours x $150/hr) to $564 (4.7 hours x $120/hr), for a saving of $561. Again, it is not the practice of FSCO arbitrators to engage in a line by line analysis of specific items, and I decline to do so.

I find the legal fees as claimed to be reasonable and that Mr. Kulasekarampillai is further entitled to legal expenses incurred for this expense assessment hearing.

May 11, 2005

Susan Sapin Arbitrator

Date