Financial Services Commission of Ontario

Neutral Citation: 2007 ONFSCDRS 214 FSCO A06-002588

BETWEEN:

FRANCOIS KOUAME Applicant

and

YORK FIRE & CASUALTY INSURANCE COMPANY Insurer

REASONS FOR DECISION

Before: Susan Sapin Heard: September 13, 2007, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: No one appeared for Mr. Kouame Mark Fonseca for York Fire & Casualty Insurance Company

Issues:

The Applicant, Francois Kouame, was injured in a motor vehicle accident on August 12, 2005. He applied for a number of statutory accident benefits from York Fire & Casualty Insurance Company ("York"), payable under the Schedule,¹ which York refused to pay. The parties were unable to resolve their disputes through mediation, and Mr. Kouame applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

1. Is Mr. Kouame entitled to an income replacement benefit of $400 per week from August 17, 2005 and ongoing, under section 4 of the Schedule?

2. Is Mr. Kouame entitled to a medical benefit of $795.72 under section 14 of the Schedule?

3. Is Mr. Kouame entitled to housekeeping expenses of $100 per week from August 12, 2005 and ongoing under section 22 of the Schedule?

4. Is Mr. Kouame entitled to the cost of a Functional Capacity Evaluation in the sum of $1,083.42 under section 24 of the Schedule?

5. Is Mr. Kouame entitled to his expenses of this arbitration proceeding?

6. Is York Fire & Casualty Insurance Company entitled to its expenses of this arbitration proceeding?

Result:

1. Mr. Kouame's Application for Arbitration is dismissed.

2. York File & Casualty Insurance Company is entitled to its costs of the arbitration proceeding, fixed at $4,836.92.

FINAL DECISION AND EXPENSES:

The arbitration hearing in this matter proceeded on June 25, 2007 at 10:00 a.m. at the offices of the Financial Services Commission of Ontario. Mr. Kouame did not attend. I granted York's motion to dismiss Mr. Kouame's Application for Arbitration with costs, provided certain conditions were met.²

The conditions were that York would serve its Bill of Costs on Mr. Kouame as required by the Dispute Resolution Practice Code (Fourth Edition, Updated — October 2003) (the "Code"); the arbitration proceeding would be adjourned to September 13, 2007 with notice to Mr. Kouame that if he did not attend, the conditional dismissal of his Application for Arbitration would become final and I would determine the amount of costs.

York met these conditions. Mr. Kouame again failing to attend the arbitration hearing on September 13, 2007, I dismissed his Application for Arbitration and heard Mr. Fonseca's submissions on behalf of York with respect to costs.

Having reviewed Mr. Fonseca's Bill of Costs I find that York is entitled to its expenses of the arbitration proceeding in the amount of $4,836.92, for the following reasons.

Mr. Fonseca submitted a Bill of Costs totaling $7,652.24 made up of $4,035.25 in legal fees and $3,600.89 for disbursements, $3,000 of which was the assessment York paid to the Commission upon the filing of its Response to an Application for Arbitration, as required by paragraph 4(1)5 of Ontario Regulation 11/01 under the Financial Services Commission of Ontario Act, 1997.³

Arbitrators' authority to assess and award expenses to either party in an arbitration proceeding flows from subsection 282(11) of the Insurance Act, the Expense Regulation⁴, and Rules 78 and 79 of the Code.

Subsection 12(2) of the Expense Regulation states that "an arbitrator shall . . . consider only the following criteria for the purposes of awarding all or part of the expenses incurred in respect of an arbitration proceeding . . ."

The criteria relevant to this proceeding are criteria 1, 4, and 5; namely,

1. each party's degree of success in the outcome of the proceeding;

2. the conduct of a party that tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders; and

3. whether any aspect of the proceeding was improper, vexatious or unnecessary.

Having regard to these criteria, I find York is entitled to its expenses of the arbitration proceeding. York's motion to dismiss Mr. Kouame's Application for Arbitration was successful, and Mr. Kouame's failure to participate in the proceedings after the first pre-hearing prolonged the process unnecessarily.

Legal Fees:

The legal fees claimed are for 43.7 hours of work on this matter by Mr. Fonseca at an hourly rate of $92.34. Under Rule 78.1(a) and (b) of the Code, the maximum amount I have authority to award to an insurer for legal fees is the hourly rate established under Schedule 2 to the Legal Aid Services Act, 1998, adjusted to include the appropriate experience allowance. Mr. Fonseca has claimed the Tier 3 hourly rate for lawyers with 10 or more years experience. In the absence of any evidence to the contrary, I accept that Mr. Fonseca meets this criterion and is entitled to an hourly rate of $92.34.

The 43.7 hours claimed by Mr. Fonseca include just under 19 hours spent reviewing Mr. Kouame's Application for Arbitration and preparing for and attending two pre-hearings at the Commission, the second of which Mr. Kouame failed to attend without notice to either the Insurer or the Commission.

Mr. Fonseca spent a further 24 hours preparing for the arbitration hearing, and attending at the Commission for that purpose on June 25, 2007. Mr. Kouame did not attend.

Given the number of issues in dispute and the lack of participation or cooperation in the arbitration proceeding on the part of the Applicant, I find the legal fees incurred by York on behalf of Mr. Fonseca are reasonable.

I also find that York is entitled to fees for Mr. Fonseca's preparation and attendance at the rescheduled hearing on September 13, 2007, in the amount of $184.68 for two hours.

Disbursements:

York claims the return of the assessment fee of $3,000 it paid to the Commission upon the filing of its Response to an Application for Arbitration.

As a result of a recent amendment to the Dispute Resolution Expenses Schedule of Regulation 664 (the Expense Regulation)⁵, a new s. 7 has been added to this Schedule, which reads as follows:

7. There may be awarded to an insurer the total of all amounts in respect of a claim by an insured person that are included under section 4 of the Ontario Regulation 11/01 (Assessment of Expenses and Expenditures) made under the Financial Services Commission of Ontario Act, 1997 in determining the amount of an insurer's total assessment for arbitrations under section 282 of the Act, total assessment for appeals under section 283 of the Act or total assessment for applications under section 284 of the Act, if the insured person, on or after March 1, 2006,

(a) refused or failed to submit to an examination relating to the claim under section 42 of Ontario Regulation 403/96 (Statutory Accident Benefits Schedule – Accidents on or after November 1, 1996) made under the Act;

or

(b) refused or failed to provide any material relating to the claim that was required to be provided by subsection 42(10) of that regulation.

As I heard no submissions or evidence on this recent and significant addition to the Dispute Resolution Expenses Schedule, I am unable to determine that it should apply in this particular case. I find therefore that York is not entitled to the return of its $3,000 assessment fee. The remaining disbursements of $600.39 are reasonable.

November 6, 2007

Susan Sapin Arbitrator

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Mr. Kouame's Application for Arbitration is dismissed.

2. Mr. Kouame shall pay to York Fire & Casualty Insurance its expenses of the arbitration proceeding assessed at $4,836.92.

November 6, 2007

Susan Sapin Arbitrator

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2My reasons are contained in a letter decision dated July 27, 2007.
3. 3Ontario Regulation 11/01, Assessment of Expenses and Expenditures
4. 4R.R.O. 1990 Regulation 664 made under the Insurance Act, as amended to O. Reg. 275/03 (Criteria for Awarding Expenses).
5. 5O. Reg. 548/05, s.2