Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2006 ONFSCDRS 49
FSCO A04-000049
BETWEEN:
ABSHIR ISMAIL YUSUF
Applicant
and
GUARANTEE COMPANY OF NORTH AMERICA
Insurer
DECISION ON EXPENSES
Before: Jeffrey Rogers
Heard: February 17, 2006, at the Offices of the Financial Services Commission of Ontario in Toronto. Written submissions received February 2, 2006
Appearances:
Mr. Yusuf did not attend
Marcella Smit, solicitor for Guarantee Company of North America
Issues:
The Applicant, Abshir Ismail Yusuf, alleged that he was injured in a motor vehicle accident on June 4, 2002. In a decision dated June 3, 2005, I dealt with his claims for statutory accident benefits under the Schedule.1 I found that Mr. Yusuf was not involved in a motor vehicle accident on June 4, 2002. I also found that Guarantee was entitled to its expenses of the hearing. I reserved on the issue of quantum expenses.
The issue in this further hearing is:
- What is the amount of expenses that Mr. Yusuf is required to pay Guarantee in respect of this arbitration hearing?
Result:
- Mr. Yusuf is required to pay Guarantee $4,911.80 for its expenses of the hearing.
EVIDENCE AND ANALYSIS:
Mr. Yusuf was present at the hearing but he has not been in contact with the Commission since then. The Commission has been unable to contact him by telephone at the last number he provided. He was served with notice of the assessment of expenses by mail, at his last address, as provided in Rule 5.7 of the Dispute Resolution Practice Code. He did not attend the expense assessment hearing.
Guarantee delivered an account dated June 27, 2005. The account claims legal fees of $1,692.62 and disbursements of $5,131.46. The claim for legal fees includes time spent preparing for and attending mediation. Guarantee submitted that it is entitled to those fees despite the appeal decision in Howden and Pembridge Insurance Company2 because the decision in Howden confirms a discretion to award expenses of the mediation meeting itself and Howden may be distinguished because there was no chance of settlement of this claim at mediation, since Mr. Yusuf advanced a fraudulent claim.
I do not accept Guarantee's submission. In Howden, the Director clearly ruled that section 282(11) of the Insurance Act, confers discretion to award expenses of an arbitration proceeding only, with mediation being a distinct step. The Director also ruled that it would be inappropriate to consider the likelihood of settlement at mediation as a factor in awarding expenses. The Director did confirm discretion to award expenses for steps taken after mediation, related to preparing the application for arbitration, but the Director did not reserve discretion to award expenses for attending mediation.
Following the decision in Howden, I have reduced the account by $200.00 for time spent preparing for and attending mediation.
The claim for disbursements includes $2,000 for the attendance at the hearing by two experts on accident reconstruction and $2,612.28 for preparation of their reports. Guarantee first retained Mr. Al Jenkins of TSI Solutions Inc., who inspected and photographed the two cars, reviewed the accident report, reviewed Mr. Yusuf's statement, and concluded that the vehicles did not collide as reported. Almost a year later, Guarantee retained Mr. Sam Kodsi of Origin and Cause Incorporated, who reviewed the damage documentation and reached the same conclusion.
In my decision of June 3, 2005, I found that nothing turned on the expert opinions. I found that their conclusions upon observing the physical damage could be made by applying general knowledge and simple common sense. Guarantee nevertheless claims entitlement to the maximum allowable under the Expense Regulation for the attendance of the witnesses, and close to the maximum for preparation of their reports, because it was entitled to "put its best foot forward" in defending a fraudulent claim.
I do not accept that logic. Although Guarantee is entitled to establish a policy of sparing no expense in retaining experts when defending a claim it considers fraudulent, recovery of the expense in arbitration will still be determined by the usefulness of their evidence at the hearing. I do not find it unreasonable that Guarantee engaged a second expert, having already obtained an opinion that the physical damage was not consistent with a collision between the two cars. I will therefore consider the cost of their reports. But calling them both as witnesses was certainly overkill. I have therefore allowed the attendance fee for only one expert witness.
As for the reports, I find that the brevity of the second report does not justify the claim for $1,112.28. The report is two pages long, it is based upon a review of damage documentation only and the opinion is contained in two lines. I have allowed $400 for this report.
The deductions reduce the amount awarded for disbursements to $3,419.18. I find the account to be otherwise reasonable. The total award of expenses is:
$1,492.62 for fees
3,419.18 for disbursements
$4,911.80
March 27, 2006
Jeffrey Rogers
Arbitrator
Date
Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2006 ONFSCDRS 49
FSCO A04-000049
BETWEEN:
ABSHIR ISMAIL YUSUF
Applicant
and
GUARANTEE COMPANY OF NORTH AMERICA
Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- Abshir Ismail Yusuf shall pay Guarantee Company of North America its expenses of the hearing in the amount of $4,911.80.
March 27, 2006
Jeffrey Rogers
Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
- (FSCO P02-00031, November 20, 2003)