Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2007 ONFSCDRS 76
FSCO A05-001109
BETWEEN:
MICHELLE FRANCIS
Applicant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Insurer
DECISION ON EXPENSES
Before:
David Snider
Heard:
January 15, 2007, at the Offices of the Financial Services Commission of Ontario in Toronto.
Appearances:
Marcel Strigberger for Ms. Francis
Carla Falkeisen for State Farm Mutual Automobile Insurance Company
Issues:
The Applicant, Michelle Francis, was injured in a motor vehicle accident on August 15, 2003. She applied for and received statutory accident benefits from State Farm Mutual Automobile Insurance Company ("State Farm"), payable under the Schedule.1 State Farm denied various claims and Ms Francis disagreed with its decision. The parties were unable to resolve their disputes through mediation, and Ms Francis applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
Prior to the commencement of the hearing scheduled for January 15, 2007 the parties resolved all outstanding issues between them except for the quantum of expenses State Farm is obliged to pay to Ms Francis. I was asked to determine only the amount of expenses owing by State Farm to Ms Francis, not entitlement.
The issue in this hearing therefore is:
- What amount of expenses is Ms Francis entitled to in respect of this Application for Arbitration?
Result:
- State Farm shall pay Ms Francis' expenses in the amount of $7,972.50 for fees plus GST of $478.35. In addition, State Farm shall pay Ms Francis $4,213.47 for disbursements, inclusive of GST.
EVIDENCE AND ANALYSIS:
The parties fully resolved all outstanding substantive issues between them shortly before the scheduled date of the hearing. They chose, however, to leave the question of the amount of expenses payable by State Farm to be determined by a FSCO Order.
Included in the Applicant's Expenses Hearing Brief was a summary of the claims settled; the terms of the total settlement; a transcription of the Applicant's counsel's time dockets; a list of expenses for arbitration with attached invoiced documentation; copies of various offers to settle; and copies of letters from the Applicant's counsel to the Insurer's counsel requesting/suggesting mediation.
Upon reading the documentation provided and hearing the submissions of counsel for both parties at the expenses hearing I conclude that the substantive issues in this matter settled for an amount roughly equal to, if not somewhat in excess of, offers to settle made by the Applicant as early as March 8, 2006, save and except for the question of interest, which was eventually waived by the Applicant, although not formally and in writing until January 10, 2007. It is clear to me, however, that the Applicant had the desire to settle for a significant period of time prior to the hearing date and, as the eventual result bore out, the interest question was clearly a negotiating point which could have been dealt with earlier in the proceedings.
The criteria for determining entitlement to and amount of expenses of the arbitration proceeding are set out in subsection 12(2) of Ontario Regulation 664, R.R.O. 1990, as amended by Ontario Regulation 275/03 (the "Expense Regulation"). Rule 78 and the Schedule to the Expense Regulation found in Section F of the Dispute Resolution Practice Code (4th Ed. - Updated October 2003) also contain relevant additional criteria with regard to the awarding of costs.
Rule 78 sets out the hourly rate to be applied:
The maximum amount that may be awarded to an insured person or an insurer for legal fees, is an amount calculated using:
(a) the hourly rates established under the Legal Aid Services Act 1998 for professional services in civil matters before the Ontario Superior Court of Justice; or
(b) the hourly rate referred to in Rule 78.1(a) adjusted to include, where appropriate, the experience allowance established under the Legal Add Services Act, 1998;
Where an adjudicator is satisfied that a higher amount for legal fees to an insured person is justified, an hourly rate of up to $150 may be awarded.
In addition, Section F of the Code sets out the nature and types of expenses which may be properly allowed:
(1) The legal fees payable by the insured person or the insurer for the following matters may be awarded:
For all services performed before an arbitration, appeal, variation or revocation hearing.
For the preparation for an arbitration, appeal, variation or revocation hearing.
For attendance at an arbitration, appeal, variation or revocation hearing.
For services subsequent to an arbitration, appeal, variation or revocation hearing.
(2) The number of hours for which legal fees may be awarded shall be determined by the arbitrator, having regard to the criteria set out in subsection 12 (2) of this Regulation.
(3) The maximum amount that may be awarded for legal fees is the amount calculated using the hourly rates set out in the Dispute Resolution Practice Code published by the Ontario Insurance Commission or Financial Services Commission of Ontario, as it may be amended from time to time.
As well:
12(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.
I accept the Applicant's counsel's submission that he is a sole practitioner having in excess of 30 years' experience as counsel in civil litigation matters. I am also impressed with his preparation of the file and his efforts to resolve the matter well in advance of the hearing. I also find that the time docketed by him in this matter was all properly directed toward the furtherance of this claim.
I conclude that the Applicant is entitled to the maximum hourly fee allowance of $150.00 per hour, plus GST, for her counsel's docketed time, up to and including an additional 2.5 hours spent in completion of the expense hearing on January 15, 2007. I find nothing unreasonable in the timing of the Applicant's counsel's efforts in working up the file, making offers and preparing in advance for the hearing scheduled for January, 2007. Accordingly, I accept the docketed time (as corrected, but with the same original result) of 50.65 hours and to this I add the 2.5 hours involved in the January 15, 2007 expense hearing. This totals 53.15 hours, which at $150.00 per hour results in a fee allowance of $7,972.50, plus 6% GST of $478.35.
I have also accepted all of the Applicant's submitted and documented disbursements, which total $4,213.47, inclusive of GST. I examined these point by point at the expense hearing and heard both counsels' submissions with regard to them, resulting in my conclusion that none of the expenses were exaggerated or unnecessary, and that they constitute a reasonable set of disbursements for this Applicant, with this counsel, in this matter.
Accordingly, I have made the expense order as set out above.
April 19, 2007
David Snider
Arbitrator
Date
Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2007 ONFSCDRS 76
FSCO A05-001109
BETWEEN:
MICHELLE FRANCIS
Applicant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
State Farm shall pay Ms Francis' expenses in the amount of $7,972.50 for fees plus GST of $478.35.
In addition, State Farm shall pay Ms Francis $4,213.47 for disbursements, inclusive of GST.
April 19, 2007
David Snider
Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.