Wawanesa Mutual Insurance Company v. Luciano Amato, 2006 ONFSCDRS 83

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2006 ONFSCDRS 83

Appeal: P04-00002

OFFICE OF THE DIRECTOR OF ARBITRATIONS

WAWANESA MUTUAL INSURANCE COMPANY

Appellant

and

LUCIANO AMATO

Respondent

Before:

David Evans

Representatives:

Stephen B. Macaulay for Wawanesa

Joseph Brian Donnelly for Mr. Amato

Hearing Date:

January 11, 2006 by teleconference

APPEAL EXPENSES DECISION

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Wawanesa Mutual Insurance Company shall pay Mr. Amato his appeal expenses in the amount of $2,000.

May 24, 2006

David Evans Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Wawanesa seeks total fees, disbursements and GST of $14,783.08 arising out of my appeal decision dated October 3, 2005. Mr. Amato seeks $14,360.48.

II. BACKGROUND

The arbitrator issued a preliminary issue decision dated July 18, 2003, in which she excluded certain insurer evidence. The arbitrator issued a final decision on December 31, 2003. Wawanesa appealed the arbitrator's preliminary issue decision to exclude certain evidence, her granting in the final decision of a special award pursuant to s. 282(10) of the Insurance Act, R.S.O. 1990, c. I.8, and her assessment of the special award at $40,000.

I upheld the arbitrator on the issues with respect to the exclusion of evidence and the entitlement to the special award. However, I reduced the special award to $10,000.

III. ANALYSIS

Pursuant to s. 12(2) of Ontario Regulation 664, an arbitrator "shall, under subsection 282 (11) of the Act,¹ consider only the following criteria for the purposes of awarding all or part of the expenses incurred in respect of an arbitration proceeding." The parties' submissions turned essentially on the first criterion: "Each party's degree of success in the outcome of the proceeding."

Wawanesa submits that it had the greatest degree of success because the special award was substantially reduced. It submits that the other issues were peripheral. I disagree. A good portion of my decision dealt with the exclusion and entitlement issues, so I did not consider them to be peripheral, and Mr. Amato was successful on those points. Furthermore, although I reduced the amount of the award, I still assessed it at the considerable amount of $10,000.²

I find that, in the context of the proceedings as a whole, Mr. Amato had the greatest degree of success and is entitled to his expenses.

However, as to the amount of the expenses, I agree with the statement of Arbitrator Blackman in Lacroix and Elma Mutual Insurance Company, (FSCO A99-000158, February 12, 2002) that "the provisions of Ontario Regulation 664 can be applied to an assessment of expenses (and not merely the question of entitlement to expenses). . . ." Since Mr. Amato was not completely successful, and the special award was reduced by a substantial amount, I find he is entitled to half of his expense claim.

The largest portion of Mr. Amato's expense claim is the counsel fee. Wawanesa does not dispute the hourly rate ($150) but does dispute the 81.26 hours claimed, most of which is for preparation. In that regard, a number of cases at the Commission have considered the tariffs for fees in civil matters set out in O.Reg. 107/99 under the Legal Aid Services Act, 1998, S.O. 1998, c. 26, as useful guidance for what is a reasonable amount of preparation time. For instance, in Kasap and Allstate Insurance Company of Canada, (OIC P96-00071, March 13, 1998), the Director's Delegate found that the arbitrator properly took the legal aid tariff into account as a factor in assessing expenses. I note that under Schedule 2, Fees in Civil Matters, Part II, Maximum Hours Allowed, a maximum of 37 hours is allowed under Item 12.3 for all preparation for appeal to the Supreme Court of Canada. Seen in that light, I find a claim of almost 80 hours for preparation for an appeal at the Commission excessive.

I find that a reasonable amount of expenses including disbursements would be $4,000. This allows about 15 hours for preparation. Taking into account the success criterion, I award Mr. Amato half of that total, or $2,000.

May 24, 2006

David Evans Director’s Delegate

Date

Footnotes

1. 1Subsection 283(7) of the Act provides that ss. 282 (10) to (11.2) "apply with necessary modifications to appeals before the Director" (or his delegate).
2. 2I am aware of only one case in 2005 where a special award of more than $10,000 was assessed: Thangarasa and Gore Mutual Insurance Company, (FSCO A02-001360, August 9, 2005), under appeal.