Rashida Waheed and Fiaza Waheed v. RBC General Insurance Company, 2008 ONFSCDRS 30

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2008 ONFSCDRS 30

FSCO A06-00076

and A06-000856

BETWEEN:

RASHIDA WAHEED

and

FIAZA WAHEED

Applicants

and

RBC GENERAL INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before: Jeffrey Rogers

Heard: By written submissions received on January 2, 2008 and January 17, 2008 and a telephone conference call on January 18, 2008.

Appearances: Mr. Owen Elliot, student-at-law, for the Applicants

Mr. Alexander Curry, student-at-law, for the Insurer

Issues:

The Applicants, Rashida Waheed (Mrs. Waheed) and Fiaza Waheed (Ms. Waheed) were injured in a motor vehicle accident on June 27, 2005. In a decision dated October 26, 2007, I dealt with their claims for statutory accident benefits under the Schedule.¹ I made the following orders, while reserving on the issue of expenses:

RBC shall pay Fiaza Waheed a medical benefit in the amount of $917.26.
RBC shall pay Rashida Waheed housekeeping benefits in the amount of $50 per week, from August 31, 2005 to December 11, 2005.
RBC shall pay interest for the overdue payment of the above benefits pursuant to section 46(2) of the Schedule.
I remain seized of the issue, should the parties be unable to agree on the amount of interest payable.

The issues in this further hearing are:

Is any party entitled to expenses incurred in respect of this arbitration hearing?
If a party is entitled to expenses, what of the amount of the expenses to which the party is entitled?

Result:

No party is entitled to expenses of the hearing.

ANALYSIS:

Delivery of Bill of Costs

As noted above, I dealt with entitlement to benefits in my decision of October 26, 2007, and reserved my decision on the issue of entitlement to expenses. RBC requested a hearing on the issue of expenses by letter of November 5, 2007. A date of January 18, 2008 was fixed. On January 2, 2008, RBC filed written submissions along with a Bill of Costs, claiming its expenses. On January 17, 2008, the Applicants responded with written submissions along with their Bill of Costs, claiming their expenses.

At the expense hearing, RBC indicated that it was surprised that the Applicants were claiming entitlement to expenses but was nevertheless prepared to argue the issue. However, RBC claimed that the late delivery of the Applicants’ Bill of Costs prejudiced its ability to address the issue of the quantum of the Applicants’ expenses because it had not been able to request supporting dockets and invoices that it would otherwise have requested. The Applicants submitted that there was no prescribed time for delivery of their Bill of Costs and that, in any event, RBC was not prejudiced because the assessment of expenses does not require a line by line analysis of the Bill of Costs.

I noted that Rule 79 of the Dispute Resolution Practice Code sets timelines for delivery of a Bill of Costs only after the issue of entitlement has been decided and that there is no provision for delivery where entitlement and quantum are to be determined at the same time. I indicated that I therefore intended to treat the issue as one of procedural fairness, to be revisited if I found that the Applicants were entitled to their expenses. In view of the result, the issue is moot.

Relevant Criteria

The criteria to be considered by an arbitrator in awarding expenses are prescribed by section 12 (2) of O. Reg. 664 (the Expense Regulation), which provides as follows:

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 Ontario Regulation 403/96 (Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996) made under the Act or refused or failed to provide any material required to be provided by subsection 42 (10) of that regulation.

The parties agree that degree of success is a relevant criterion. The Applicants submit that there are no other relevant criteria. RBC submits that the findings I made about the Applicants’ credibility means that the proceeding was improper, vexatious or unnecessary. RBC also submits that the Applicants’ failure to provide clinical notes they had agreed to provide, tended to hinder the proceeding and that Ms. Waheed’s claim for housekeeping and Mrs. Waheed’s claim for medical benefits were improper, vexatious or unnecessary, because I dismissed them.

I do not accept RBC’s submissions. Although there might be cases in which an adverse finding on credibility could support a determination that the proceeding was improper, vexatious or unnecessary, this is not such a case. That determination requires not only a rejection of the Applicants’ evidence but also findings of misconduct, such as knowingly pursuing an unmeritorious claim, or pursuing a claim for a collateral purpose, absent from this case. I find that the Applicants’ failure to produce clinical notes did not hinder RBC’s ability to proceed. On the contrary, the hearing was probably expedited because it was not necessary to review those notes. If anyone’s ability to proceed was hindered, it was the Applicants’, since their chances of proving their claims were adversely affected by the absence of the notes.

I find that the only relevant criterion is degree of success.

Entitlement, based on success

Each party enjoyed some degree of success. Mrs. Waheed claimed $4,309 in medical benefits, $100 per week for housekeeping and home maintenance services from August 31, 2005 to February 28, 2006, $869.50 for an In-Home Assessment, $869.50 for a follow-up In-Home Assessment and interest. She was awarded housekeeping benefits in the amount of $50 per week, from August 31, 2005 to December 11, 2005, plus interest. RBC successfully defended her other claims.

Ms. Waheed claimed $4,329 in medical benefits, $100 per week for housekeeping and home maintenance services, from September 4, 2005 to February 28, 2006, $869.50 for an In-Home Assessment and interest. She was awarded a medical benefit in the amount of $917.26, plus interest. RBC successfully defended her other claims.

From the point of view of recovery of a percentage of the amount claimed, the Applicants success was fairly minor. But RBC should have given serious thought to paying what was recovered, without being ordered to do so. RBC was ordered to pay Ms. Waheed for some treatment that it denied pending a DAC opinion that it did not seek and for some treatment that a DAC recommended. RBC was ordered to pay Mrs. Waheed for housekeeping expenses during a period when its own assessor concluded that she required education in proper body mechanics before she could safely resume her pre-accident activities.

All parties submitted that they are entitled to an award of expenses, based on the success achieved. RBC submitted that it is entitled to its expenses because it achieved a greater degree of success than the Applicants, whose success was minor. The Applicants submitted that they are entitled to their expenses based on their partial success. They rely on the decisions in Abulibdeh and RBC General Insurance Company² and Shreet and RBC General Insurance Company³ to support their position. They also argue that, despite their modest success, they should be awarded their expenses because of the “imbalance of power” in their relationship with the Insurer. Finally, they submit that degree of success should affect quantum, but not entitlement.

I do not agree that the decisions upon which they rely support the position that Applicants who achieved the degree of success that the Waheeds achieved are entitled to an award of expenses, in the absence of other relevant criteria. In Abulibdeh, in awarding expenses to the Applicant, the Arbitrator found that the Applicant had achieved “a significant degree of success”.⁴ Here, the Applicants only achieved minor success. The Arbitrator also found that the Applicant achieved a better result than an offer he had made and that the Insurer had engaged in conduct that prolonged and hindered the proceeding. Entitlement to expenses could have been grounded on the additional criteria alone. Had the Insurer accepted the offer, the hearing would have been avoided. Then, to compound matters, the Insurer prolonged the unnecessary hearing it had caused.

In Shreet, the Arbitrator ruled that neither party was entitled to its expenses, although the Applicant was completely unsuccessful. The Arbitrator did not award expenses to the Applicant. In addition, degree of success was again not the only relevant criterion. The Arbitrator’s finding that the Applicant raised novel issues “which required a decision from an arbitrator”⁵ was central to her decision. One of the purposes of including consideration of whether novel issues were raised as one of the criterion in the Expense Regulation is to foster access to justice, where novel issues are raised. It is therefore reasonable not to penalize with an expense award, an Applicant who unsuccessfully pursues a novel claim.

RBC’s submission that it is entitled to its expenses because it enjoyed the greater degree of success must be assessed in view of the purpose of including degree of success as one of the relevant criteria and in light of the other criteria included in the Expense Regulation. The purpose is to reward successful parties and penalize unsuccessful parties. It encourages the prosecution of meritorious claims and discourages the pursuit of baseless claims. When one party is entirely successful and there are no other relevant criteria, the purpose is clearly served by an award to the successful party.

Arbitrators have exercised discretion to award all or a percentage of expenses to a party who achieved a greater degree of success. However, applying that approach requires dissecting the hearing into discrete parts and determining which should have been avoided. The anatomy of a dispute does not usually allow a neat division. In most cases, claims are not discrete and compartmentalized and it is impossible to determine the tipping point where a party should be penalized, although modestly successful.

That is the case here. The individual claims for medical benefits, housekeeping expenses and assessments were inter-related and the claims of the two Applicants were related to each other. Most of the evidence was relevant to all issues. It cannot be determined in hindsight what course the dispute would have taken, had RBC chosen to pay the benefits it was ordered to pay. Similarly, it cannot be determined in hindsight what would have happened, had the Applicants pursued only the claims in which they were successful.

A party seeking to bolster a claim for expenses where mixed success is a possible outcome, should take advantage of the relevance of offers to settle as one of the criteria to be considered, as the Applicant did in Abulibdeh. An offer can establish a clear boundary beyond which pursuing a hearing becomes unreasonable.

I do not accept the submission that “imbalance of power” is a factor to be considered. The Expense Regulation specifically states that the listed criteria are the only ones to be considered. It specifically requires consideration of “[E]ach party’s degree of success”, not just the Applicants’. “Imbalance of power” cannot be imported to negate recognition of the Insurer’s greater degree of success. If there were discretion to consider “imbalance of power”, it would be circumscribed by the fact that the issue is at least partially addressed in the quantum provisions of Rule 78, which limits the recoverable legal fees for Insurers to the Legal Aid rate. That means that, even when an Insurer is awarded expenses, it will still bear the cost of a large percentage of the legal fees it incurred.

The language of the Expense Regulation also does not support the submission that degree of success should be considered only in assessing quantum of expenses. The mandate to consider the listed criteria in awarding “all or part of the expenses” means that the criteria are relevant to both entitlement and quantum. I am guided in this approach by the decision of Director’s Delegate Evans in Wawanesa Mutual Insurance Company and Amato⁶ where he stated:

However, as to the amount of the expenses, I agree with the statement of Arbitrator Blackman in Lacroix and Elma Mutual Insurance Company, (FSCO A99-000158, February 12, 2002) that “the provisions of Ontario Regulation 664 can be applied to an assessment of expenses (and not merely the question of entitlement to expenses)…”.

I conclude that, because I am unable to determine whether the hearing could have been avoided and the parties achieved mixed success, the fairest result is that the parties should bear their own expenses of the hearing.

February 28, 2008

Jeffrey Rogers Arbitrator

Date