Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2007 ONFSCDRS 34
FSCO A05-000172
BETWEEN:
LORETA VALANCIUS
Applicant
and
AVIVA CANADA INC.
Insurer
DECISION ON EXPENSES
Before: Eban Bayefsky
Heard: Written submissions received by January 25, 2007 and a telephone conference call on January 26, 2007.
Appearances:
Joseph Lam for Ms. Valancius
Raymond Murray for Aviva Canada Inc.
Issues:
The Applicant, Loreta Valancius, was injured in a motor vehicle accident on December 28, 2002. In a decision dated September 28, 2006, 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. Valancius is not entitled to weekly caregiver benefits from June 25, 2003 to February 8, 2004 or from April 5 to December 26, 2004.
Ms. Valancius is not entitled to housekeeping and home maintenance benefits from June 25, 2003 to February 8, 2004 or from April 5 to December 26, 2004.
Of the medical benefits claimed, Aviva shall pay Ms. Valancius $540 of the balance of treatment provided by New Age Recovery between December 30, 2002 and May 20, 2003.
Aviva is not liable to pay a special award.
Aviva shall pay Ms. Valancius interest on the $540 found owing for the treatment at New Age Recovery.
The parties were unable to resolve the issue of expenses. They provided written submissions, including their respective Bills of Costs, by January 25, 2007.
The issue in this further hearing is:
- Is either party entitled to its expenses incurred in respect of this arbitration hearing?
Result:
- Ms. Valancius shall pay to Aviva arbitration expenses in the amount of $2,560.61.
EVIDENCE AND ANALYSIS:
Section 12 of Regulation 664, R.R.O. 1990, as amended, sets out the following regarding the awarding of expenses:
(2) An arbitrator shall, under subsection 282 (11) of the Act, consider only the following criteria for the purposes of awarding all or part of the expenses incurred in respect of an arbitration proceeding:
Each party's degree of success in the outcome of the proceeding.
Any written offers to settle made in accordance with subsection (3).
Whether novel issues are raised in the proceeding.
The conduct of a party or a party's representative that tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders.
Whether any aspect of the proceeding was improper, vexatious or unnecessary.
Whether the insured person refused or failed to submit to an examination as required under section 42 of the Schedule, or refused or failed to provide any materials required to be provided by subsection 42(10).
(3) Upon the request of the insurer or the insured person, the arbitrator shall, for the purposes of awarding expenses, take into account all written offers to settle, if any,
(a) that were made after the conclusion of mediation and before the conclusion of the arbitration; and
(b) that were made in accordance with the rules of practice and procedure applicable to the proceeding.
(4) If the arbitrator is requested to take into account a written offer under subsection (3), the arbitrator shall have regard to the terms of the offer, the timing of the offer, the response to the offer and the result of the proceeding.
Rule 76.1(b) of the Dispute Resolution Practice Code also states that an arbitrator should give "particular consideration" to offers served after the pre-hearing conference and before five days prior to the commencement of the hearing.
(i) Each party's degree of success in the outcome of the proceeding
Aviva was successful on all of the issues except for a small amount of New Age Recovery's treatment account. While I found that Ms. Valancius continued to experience lingering physical and psychological symptoms following the accident, Ms. Valancius fell well short of establishing the requisite degree of disability for her claims of housekeeping and caregiving benefits, as well as for her claims of physical and psychological therapy. In any event, Aviva never maintained that Ms. Valancius was symptom-free following the accident. While I found that Aviva ought to pay Ms. Valancius a small amount of New Age Recovery's account, I found no basis on which to conclude that Aviva had unreasonably withheld or delayed payments, so as to justify the granting of a special award. In any case, Ms. Valancius failed to provide any evidence relevant to the issue of a special award.
(ii) Any written offers to settle
Ms. Valancius made two offers to settle, a verbal offer on September 15, 2006 of $10,323 to settle the case on a full and final basis (which Aviva rejected in writing the following day, stating that they would "pursue this matter to arbitration") and a written offer on September 20, 2006 of $6,000 plus costs to settle the arbitration issues (which Aviva verbally rejected, stating that they did not wish to pay anything towards the claim). Ms. Valancius maintained that Aviva failed to meaningfully participate in settlement discussions and essentially "forced" her to proceed to arbitration. Aviva maintained that it was entitled to reject Ms. Valancius's offers, that its position was vindicated in the outcome of the arbitration and that Ms. Valancius was always free to withdraw her arbitration, something that Aviva had suggested to her in the course of the settlement discussions.
(iii) Whether novel issues were raised in the proceeding
The case did not raise any novel issues.
(iv) The conduct of a party that tended to delay or hinder the proceeding
Aviva maintained that Ms. Valancius and/or her counsel improperly delayed the proceeding by adding witnesses just before the hearing, and by both withdrawing and attempting to add issues at the outset of the hearing. Ms. Valancius' counsel maintained that any changes in the witnesses or issues were due to his having been retained approximately a month before the hearing and to his attempting to properly present the case without having to request an adjournment.
(v) Whether any aspect of the proceeding was improper, vexatious or unnecessary
Aviva submitted that Ms. Valancius provided no evidence at all for her claim for a special award, that this issue was, therefore, improper and/or unnecessary and that this caused Aviva additional costs in preparing for the hearing. Ms. Valancius' only argument in favour of a special award was that Aviva had spent more on medical examinations than on the benefits actually paid. I found that, even if this were the case, it did not support the conclusion that Aviva had acted unreasonably in denying the small amounts found to be owing, particularly given my finding that Ms. Valancius was not entitled to the vast majority of benefits she claimed.
(vi) Non-compliance with section 42
The case did not involve any issues of non-compliance with section 42.
Findings
Ms. Valancius was successful on only a very small part of her arbitration. As indicated, she fell well short of establishing her entitlement to the various benefits at issue. She failed to provide any reasonable basis for her claim for a special award. In this context, I do not find that Aviva acted unreasonably in rejecting Ms. Valancius' settlement offers. I find that Aviva duly considered and responded to the offers. I see no basis to conclude that Aviva essentially "forced" Ms. Valancius to proceed to arbitration. Ms. Valancius did not raise any novel issues in the proceeding.
While these findings are, in my view, sufficient to deny Ms. Valancius her expenses of the arbitration, I am not prepared to award Aviva its full expenses. I find that Ms. Valancius' counsel acted reasonably in attempting to bring this matter to a conclusion. While this involved some changes just prior to the hearing, I do not find that this caused Aviva undue expense in preparing for or responding to the arbitration. Further, while Ms. Valancius failed to establish most of her claims for benefits, she had some success in the arbitration. Aside from the issue of a special award, I do not find that any aspect of her arbitration proceeding was unnecessary or otherwise improper.
In all of the circumstances, I find that Ms. Valancius is not entitled to her expenses of the arbitration and that Aviva is entitled to one half of its expenses.
In its Bill of Costs, Aviva sought $1,371.44 in fees for the July 20, 2005 pre-hearing conference, $6,227.94 in fees for the September and October 2005 hearing, and $2,663.01 in witness fees and disbursements for the hearing.
I see no basis to award either party its expenses of the pre-hearing conference. Both parties were expected to participate and did so, with no evidence of any delay or improper conduct at that time. While Ms. Valancius may have raised issues that she (upon the advice of a new representative) ultimately chose not to pursue, this is more appropriately considered in the context of Aviva's preparation for the hearing. In any event, I have found that Ms. Valancius' retaining of a new representative did not unduly cause Aviva additional expense.
Regarding Aviva's claim for legal fees for the hearing, Arbitrators have established a rule of thumb in determining the amount of legal work to be compensated for an arbitration hearing, namely, a ratio of between one and four hours of preparation time for every hour of hearing time.2 In my view, this was a relatively straightforward proceeding, completed in just over three days. I see no basis upon which to apply a ratio of greater than 1:1 in the calculation of Aviva's entitlement to legal fees. Therefore, on the basis of 26 hours of hearing time and a further 26 hours of preparation time (as well as the claimed hourly rate of $70.35), Aviva would be entitled to $3,658.20 in legal fees for the hearing.
I am prepared to grant Aviva its full witness fees and disbursements, except for the following. Aviva claimed $1,200 in respect of air travel and accommodation for its counsel, who is based in Ottawa. The hearing took place in Toronto. Throughout this proceeding, the Commission's contact information for Aviva has shown them to be based in Toronto. All other participants, as well as the circumstances of the accident and subsequent treatment, were situated in the Greater Toronto Area. In the absence of evidence indicating the need to retain counsel in Ottawa where all of the elements of the proceeding were centred in Toronto, I am not prepared to grant Aviva its disbursements in respect of counsel's travel expenses. Aviva is, therefore, entitled to witness fees and disbursements of $1,463.01.
Therefore, of a total possible amount for fees and disbursements of $5,121.21, Aviva is entitled to $2,560.61 ($5,121.21 x 50%).
February 27, 2007
Eban Bayefsky
Arbitrator
Date
Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2007 ONFSCDRS 34
FSCO A05-000172
BETWEEN:
LORETA VALANCIUS
Applicant
and
AVIVA CANADA INC.
Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- Ms. Valancius shall pay to Aviva arbitration expenses in the amount of $2,560.61.
February 27, 2007
Eban Bayefsky
Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
- See, for example, Carr and Lombard General Insurance Company of Canada, (FSCO A00-000441, April 12, 2002), Buccellato (Estate of) and Allstate Insurance Company of Canada, (FSCO A03-000609, August 27, 2004), Soobrian and Belair Insurance Company Inc., (FSCO A04-000422, February 7, 2006), Silva and York Fire & Casualty Insurance Company, (FSCO A04-001771, February 28, 2006), Crossey and Farmers 'Mutual Insurance Company, (FSCO A03-001643, March 15, 2006) and Hart and Allstate Insurance Company of Canada (FSCO A98-000988, December 29, 2006).