Financial Services Commission des Commission services financiers of Ontario de l’Ontario

Neutral Citation: 2008 ONFSCDRS 27

FSCO A05-002645

BETWEEN:

VOLODYMYR PANCHENKO

Applicant

and

RBC GENERAL INSURANCE COMPANY

Insurer

Before: Arbitrator Denise Ashby

Heard: Written submissions received by November 23, 2007 and a telephone conference call on December 21, 2007.

Appearances: Adam Ezer, Student-at-Law, for Mr. Panchenko Aldo Picchetti for RBC General Insurance Company

Issues:

The Applicant, Volodymyr Panchenko, was injured in a motor vehicle accident on January 23, 2005. In a decision dated August 23, 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:

RBC General Insurance Company shall pay Mr. Panchenko a weekly caregiver benefit at the rate of $250.00 for the period from April 27, 2005 to May 31, 2005 and at the weekly rate of $60.00 from June 1 to August 31, 2005.
RBC General Insurance Company shall pay Mr. Panchenko a medical benefit in the amount of $2,249.00 for treatment provided by Downsview Health Recovery Centre.
RBC General Insurance Company shall pay Mr. Panchenko for housekeeping and home maintenance services at the weekly rate of $60.00 from April 1, 2005 to August 31, 2005.
Mr. Panchenko is not liable to repay $3,321.42 to RBC General Insurance Company.
RBC General Insurance Company shall pay Mr. Panchenko interest as follows:

(a) In respect of the Caregiving benefits commencing May 27, 2005;

(b) In respect of the Medical Benefits commencing 30 days following receipt of the invoices relating to the treatment set out in the Treatment Plans dated May 20 and October 28, 2005; and

The issue in this further hearing is:

Is Mr. Panchenko entitled to his expenses incurred in respect of this arbitration hearing and, if he is entitled to his expenses, what is the quantum of those expenses?

Result:

RBC General Insurance Company shall pay Volodymyr Panchenko his expenses incurred in respect of the arbitration hearing in the amount of $7,904.80, inclusive of disbursements, plus GST.

EVIDENCE AND ANALYSIS:

Mr. Panchenko submits that as he was substantially successful in his claim, he should be compensated for his expenses. He submitted a bill of costs for $10,091.70.

RBC General Insurance Company (RBC) submits that as Mr. Panchenko’s results were mixed each party should bear their own costs. It argues that exaggerated claims must be discouraged and the Expense Regulation is the tool provided to arbitrators to achieve this goal. Further, RBC maintains that, in the event Mr. Panchenko is found to be entitled to his expenses, the bill of costs he submitted is excessive.

Entitlement to Expenses:

The Insurance Act is consumer protection legislation.² Arbitral precedent establishes that the Insurance Act, its Schedules and the Code must be interpreted in a purposive fashion which gives meaning to the remedial nature of the legislation.³ Therefore, the Expense Regulation must be interpreted in such a way as to uphold both the protective and remedial nature of the legislation from which it flows.

RBC relied on three cases: Afriyie and TTC Insurance Company Limited, Mann and Mann and Allstate Insurance Company of Canada, and Patterson and State Farm Mutual Automobile Insurance Company as support for the principle that where there is a mixed result each party should bear its own expenses. All are distinguishable from the present case. In Afriyie,⁴ neither the applicant nor her counsel appeared at the expense hearing notwithstanding notice. In Mann,⁵ the Arbitrator determined that the applicants were not the guiding minds in the litigation. She refers to the conduct of the treatment facility’s representative who commenced 11 separate mediations with respect to the treatment plans issued by the provider. The Arbitrator indicated that while counsel, who was retained by the treatment provider and represented the Manns at hearing, attempted to make the hearing as efficient as possible, in the circumstances each side should bear their own expenses. Mr. Panchenko’s representative made both oral and written submissions at this expense hearing and he did not unreasonably protract the dispute resolution process. I therefore conclude that neither Afriyie nor Mann assist me in making a determination with respect to Mr. Panchenko’s entitlement to his expenses. In Patterson, ⁶ while the Arbitrator determined that each side should bear their own expenses, Ms. Patterson did not seek payment of her expenses.

Mr. Panchenko raised legitimate issues which required a determination by an arbitrator. He was substantially successful in asserting his claim against his first party insurer for caregiving, housekeeping and medical expenses. My decision does not characterize Mr. Panchenko’s claim as “excessive” and I made no adverse finding in respect of his credibility. To deny Mr. Panchenko his expenses would undermine the legislative purpose and have a chilling effect on consumers seeking payment for benefits to which they are entitled. Therefore, I find that Mr. Panchenko is entitled to his reasonable expenses.

Quantum of Expenses:

I find that “the global assessment of expenses” as described in Henri and Allstate Insurance Company of Canada (OIC A-007954, August 8, 1997) is a useful approach to determining the quantum of expenses. As well, I agree with those cases which apply a ratio of preparation time to the days of hearing. The usual spectrum is from 4:1 to 1:1 depending on the complexity of the matter.

Mr. Ezer, a student-at-law, claims 25 hours for the three-day hearing and 73.3 hours of preparation. Mr. Ezer demonstrated advocacy skills which were superior to those expected of an articling student. Therefore, I find that his hourly rate of $50.00 is reasonable. I also find that a ratio closer to the 4:1 guideline is appropriate in recognition that a student would be expected to take longer to prepare than senior counsel. Therefore, I find Mr. Panchenko is entitled to $4,915.00 for Mr. Ezer’s fees in respect of the arbitration.

A further 13.7 hours at the hourly rate of $150.00 has been claimed in respect of Mr. A. Rooz for supervising Mr. Ezer. Mr. Rooz was called in 1999. The hours claimed have not been particularized. Mr. Ezer’s superior advocacy skills have been commented on in another decision.⁷ He is a very experienced articling student. Therefore, I find the hours claimed for supervision excessive. In these circumstances, I would expect consultations of approximately two hours for each of the hearing days. In the absence of particulars, I assess an additional two hours for discussion of the pre-arbitration conduct of the file. Therefore, I award a total of 8 hours for supervision. Further, I am not inclined to exercise my discretion and award an hourly rate of $150.00 for overseeing the work of a superior articling student. Consequently, I assess an hourly rate of $83.10, pursuant to the Legal Aid Services Act, 1998, O.Reg.107/99, sections 24.1 and 24.2 of the Table to Schedule 2. Therefore, Mr. Panchenko is entitled to $664.80 for Mr. Rooz’s fees.

On the basis of the foregoing, I find that Mr. Panchenko is entitled to fees in the amount of $5,579.80.

Mr. Panchenko submitted a claim for disbursements in the amount of $2,325.00.

The sum of $225.00 was attributed to photocopying, mailing and faxing costs. The photocopying and courier costs of the briefs filed on Mr. Panchenko’s behalf would easily exceed this amount. Therefore, I allow this amount in full.

As well, Mr. Panchenko claimed $2,100.00 in respect of Dr. Lianos’ fees. Mr. Panchenko submitted Dr. Lianos’ invoice, dated October 8, 2007, for $3,498.00. It reflected an hourly rate of $300.00 and GST of $198.00.

Dr. Lianos testified persuasively at the hearing. Mr. Panchenko seeks partial compensation of the invoiced amount. Having considered Dr. Lianos’ attendance time and reasonable preparation time I award Mr. Panchenko his claimed amount of $2,100.00.

In conclusion, I find that Mr. Panchenko is entitled to an award of expenses of $7,904.80, inclusive of disbursements plus GST.

February 27, 2008

Denise Ashby Arbitrator

Date