Neutral Citation: 2007 ONFSCDRS 81

FSCO A05-001598

BETWEEN:

ERICA FRANCIS

Applicant

and

TTC INSURANCE COMPANY LIMITED

Insurer

DECISION ON EXPENSES

Before: Fred Sampliner

Heard: TTC written submissions received March 28, 2007 and a teleconference hearing on April 20, 2007, at the Offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Brian Leila for Ms. Francis

Norma Priday for TTC Insurance Company Limited

Issues:

TTC Insurance Company Limited (TTC) seeks an order that the Applicant, Erica Francis, pay its expenses of the arbitration hearing on her claim for statutory accident benefits under the Schedule.¹ The TTC fixes the amount at $450.

The issue is:

Is TTC entitled to $450 for its expenses respecting the arbitration proceeding under subsection 282(11) of the Insurance Act, R.S.O. 1990, c. I.8?

Ms. Francis does not claim her expenses in this matter.

Result:

TTC is entitled to $450 for its expenses of this arbitration proceeding under subsection 282(11) of the Insurance Act.

EVIDENCE AND ANALYSIS:

My March 7, 2007 decision in this matter dismissed both Ms. Francis' claim for income replacement benefits and the TTC's claim for a repayment order. The parties agree that the evidence at the two day hearing was efficiently organized, they were reasonably cooperative throughout the process, and there were no settlement offers.²

The TTC's main argument is that the evidence did not support Ms. Francis bringing her claim to a hearing, and that costs should follow the result in the same manner as in the Court system. TTC seeks to recover a portion of its total arbitration expenses, with the added provision that it will only demand the $450 as a setoff against Ms. Francis if she is successful on a future claim with this Insurer.

Ms. Francis argues that TTC's success regarding the disability issue is counterbalanced by its failure on the repayment issue. She maintains that the split result does not support imposing costs on her because it is poor policy to weigh one issue greater than another.

Law and Analysis:

The sole relevant criteria in this case is the parties' respective degree of success.³ Neither party referred to any case law dealing with FSCO's current results-based approach on arbitration expenses.⁴

FSCO decisions are conflicting where the parties' success has been split. In some cases, arbitrators have refused to compare the relative financial success between the applicant's claim and the result⁵, or have decided that an applicant's success on a preliminary issue balanced the loss of entitlement. The result was that each party bore their own arbitration expenses.⁶ Contradictory decisions have allowed insurers to recover their expenses when an applicant had no success on the main issue entitlement, but succeeded on a secondary one.⁷ These cases do not provide reasons for either accepting or rejecting the weighted comparison of the issues.

Significantly, the Rule itself does not explicitly use the word "financial" as a modifier to "success". The absence of the modifier, in my view, leaves it open to consider the importance of the issues to the parties. The importance of Ms. Francis' claim for income replacement benefits in this arbitration is demonstrated not only by its comparative monetary value with TTC's repayment claim (approximately ten times) but also by the fact that it occupied nearly all of the evidence at the hearing.

The above factors establish that Ms. Francis enjoyed relatively little success in this arbitration, and it is appropriate to award the TTC its partial costs claimed. I accept that there is no need for the TTC to submit its time docket to substantiate the $450 claimed because it is clear from the time spent during the two hearing days and documents submitted that this amount is a small portion of TTC's total expended on this matter. I find that under subsection 282(11) of the Insurance Act TTC is entitled to $450 for its expenses of this arbitration, but this amount payable only as a setoff against Ms. Francis' recovery in another legal proceeding against the TTC.

April 27, 2007

Fred Sampliner Arbitrator

Date