Asif Hasan v. State Farm Mutual Automobile Insurance Company, 2008 ONFSCDRS 113

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2008 ONFSCDRS 113

FSCO A06-000665

BETWEEN:

ASIF HASAN

Applicant

and

STATE FARM MUTUAL AUTOMOBILE

INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before: Eban Bayefsky

Heard: By way of written submissions received by February 25, 2008 and a telephone conference call on February 29, 2008.

Appearances: Owen Elliot for Mr. Hasan

Jonathan B. Schrieder for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Asif Hasan, was injured in a motor vehicle accident on June 2, 2005. In a decision dated November 9, 2007, I dealt with his claims for statutory accident benefits under the Schedule.¹ I made the following orders, while reserving on the issue of expenses:

Mr. Hasan is not entitled to housekeeping benefits from September 14, 2005 to October 15, 2006.
Mr. Hasan is not entitled to attendant care benefits from June 2 to August 2, 2005.
Mr. Hasan is not entitled to medical benefits for the balance of the treatment account of Prime Health Recovery Centre.
Mr. Hasan is not entitled to interest.

The issue in this further hearing is:

Is State Farm entitled to its expenses incurred in respect of this arbitration hearing?

Result:

Mr. Hasan shall pay to State Farm Mutual Automobile Insurance Company arbitration expenses in the amount of $2,908.71.

EVIDENCE AND ANALYSIS:

Section 12 of Regulation 664, R.R.O. 1990, as amended, sets out the following regarding the awarding of expenses:

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.
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 material required to be provided under subsection 42(10).

State Farm sought its expenses of the arbitration. Mr. Hasan submitted that each party should bear its own expenses.

State Farm was entirely successful in the arbitration. No written offers to settle were brought to my attention. The proceeding did not raise any novel issues. The parties and their representatives conducted themselves in a professional manner so as to complete the arbitration in an expeditious manner. I do not find that any aspect of the proceeding was improper, vexatious or unnecessary. While I do not agree with State Farm that “the entire proceeding from its inception was a waste of time,” I did dismiss Mr. Hasan’s arbitration on the basis that he had failed to substantiate his claim for housekeeping, attendant care and medical benefits in a variety of ways. There were no issues concerning Mr. Hasan’s failure to submit to a medical examination or to provide required materials. In all of the circumstances, I find that State Farm, and not Mr. Hasan, is entitled to its arbitration expenses.

State Farm sought expenses as follows:

Legal Fees

Mr. Schrieder (59.50 hours @ $92.34/hour)

$5,494.23

Ms. Kumar (law clerk) (61.10 hours $23.00/hour)

$1,405.30

G.S.T.

$ 344.97

Subtotal

$7,244.50

Disbursements

Clinical Notes and Records

$ 234.42

Conduct Money

$ 183.00

Process Server

$ 691.35

Photocopying

$ 430.13

Courier

$ 106.26

Subtotal

$1,645.16

TOTAL

$8,889.66

Under section 3(1) of the Schedule to the Expense Regulation, legal fees may be awarded for “all services performed before an arbitration”, “the preparation of an arbitration”, “attendance at an arbitration” and “services subsequent to an arbitration.” Pursuant to section 3(2) of the Schedule to the Expense Regulation, the “number of hours for which legal fees may be awarded shall be determined...having regard to the criteria set out in subsection 12(2)” of the Expense Regulation.

Arbitrators have established a rule of thumb in determining the amount of legal work to be compensated for an arbitration proceeding, namely, a ratio of between one and four hours of preparation time for every hour of hearing time.²

The arbitration took place over two days and involved approximately 10 hours of hearing time. While State Farm was fully successful in the matter, there were no written offers exchanged, the case did not raise novel issues and it was a relatively straightforward matter (both procedurally and substantively). For these reasons, applying the general rule identified above, I find that a ratio of 2:1 is appropriate for preparation time. State Farm is, therefore, entitled to 30 hours of counsel’s time, for total legal fees of $2,770.20. GST on this amount is $138.51.

Mr. Hasan submitted that State Farm’s disbursements were excessive, including in particular the amounts claimed for “process server” and “photocopying.” Mr. Hasan also maintained that conduct money should only be permitted for witnesses that actually testified. State Farm did not call any witnesses. State Farm did not provide receipts for its disbursements, despite a request to do so prior to the expense hearing and despite being notified of Mr. Hasan’s position on these matters approximately four days before the expense hearing. In all of the circumstances, I am not prepared to award expenses in respect of State Farm’s disbursements.

I, therefore, award State Farm arbitration expenses of $2,908.71.

July 10, 2008

Eban Bayefsky Arbitrator

Date