Neutral Citation: 2008 ONFSCDRS 51

FSCO A06-002469

BETWEEN:

ROLA KAMEL on her own behalf and on behalf of MURTADA ALATTIYA, LAYLA ALATTIYA AND ALI ALATTIYA (Minors) Applicants

and

TD GENERAL INSURANCE COMPANY Insurer

DECISION ON EXPENSES

Before: Elizabeth Nastasi Heard: Written submissions received by February 9, 2008 Appearances: Mr. Enzo Timperio for Mrs. Kamel Mr. Dwain Burns for TD General Insurance Company

Issues:

In a decision dated November 23, 2007, I dealt with the claims of Ms. Rola Kamel for statutory accident benefits under the Schedule.¹ Ms. Kamel made this claim on her own behalf and on behalf of the three children of the marriage, Murtada Alattiya, Layla Alattiya and Ali Alattiya. I dismissed the application upon finding that the tragic death of her husband, Mr. Thualfikar Alattiya, was not an "accident" as defined in subsection 2(1) of the Schedule. I reserved on the issue of expenses. TD General Insurance Company ("TD General") has not pursued a claim for its expenses.

The parties were unable to resolve the issue of expenses and requested an assessment pursuant to Rule 79 of the Dispute Resolution Practice Code, (Fourth Edition Updated — October 2003).

Issue:

Is Ms. Kamel entitled to her expenses in respect of this arbitration proceeding?

Result:

Ms. Kamel is not entitled to her expenses of the hearing.

EVIDENCE AND ANALYSIS:

The factors to be considered by an arbitrator in awarding expenses are contained in the Expense Regulation under the Insurance Act² as set out below:

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) of the Schedule.

The only criteria relevant to the decision in this case are degree of success and whether a novel issue was raised. Counsel for Ms. Kamel argued that, despite her lack of success, his client is entitled to her expenses because her application raised a novel issue.

At the hearing, the Applicant similarly argued that this case was novel and could be distinguished from the other assault cases. The Applicant argued that because Mr. Alattiya was specifically targeted for the assault, that the element of pre-meditation resulted in the use of the cab being a direct cause of his death. Although there had been no previous decisions on whether a pre-meditated assault on a particular victim would meet the definition of "accident," earlier cases had involved pre-meditated crimes.

In my decision, I found that the element of pre-meditation was not a significant difference and that the case was substantially similar to numerous other cases that had been decided by FSCO involving assaults in a motor vehicle. All of the FSCO and court decisions that predated this case concluded that an assault was an intervening act which broke the chain of causation between the use or operation of a motor vehicle and the injuries sustained by the victim. Thus, I found that the issue in this proceeding was not novel and not factually dissimilar from the numerous other motor vehicle assault cases which had already been decided.

With respect to the issue of expenses, the Applicant argued that access to justice would not have been available without the availability of an "alternative resolution" in particular for those of modest means. I was not referred to any case law on this point.

On October 1, 2003 the Expense Regulation was amended making the relevant criteria more restrictive and the list of relevant factors exhaustive. The amendments removed the broad discretionary criterion that allowed an arbitrator to consider: "any other matter related to the proceeding," that may be relevant to whether an award of expenses was justified. Director's Delegate Draper stated in Pembridge Insurance Company and Howden³ the new criteria and the removal of the broad "any other matter" criterion continued the "move toward a more results-based approach to expenses."

Lack of success at an arbitration does not automatically make the applicant responsible for the insurer's expenses. I do not interpret a "move toward" to result in a "winner takes all" approach devoid of any discretion - albeit highly restricted. I find that there is still the discretion to weigh each of the existing criterion given the particular circumstances of the case.

Since the amendment to the Regulation, several FSCO decisions have considered whether the changes restrict an arbitrator to a pure results based approach to expenses. I agree with the approach taken by Arbitrator Killoran in Shreet and RBC General Insurance Company⁴ that although the amendment moves the Regulation towards a more results based approach, the statute and regulation must still be interpreted in a purposive fashion which gives meaning to the remedial nature of the legislation.⁵ Further, Arbitrator Killoran states that a completely results based approach would potentially undermine the legislative purpose of the Insurance Act.⁶ In Shreet, Arbitrator Killoran found that although the insurer was successful on all of the issues, the case raised novel issues which were central to the proceedings – each party was ordered to bear their own expenses.

In Borissenko and RBC General Insurance Company⁷ Arbitrator Feldman stated that although he agreed that the purpose of the Insurance Act is an important factor in interpreting the Regulation, that "... this does not permit an arbitrator to read into the Expense Regulation provisions that simply are not there or to ignore the clear and unambiguous words that are contained therein." Arbitrator Feldman notes that where the "only relevant criterion is each party's degree of success, absent very unusual circumstances, the Expense Regulation dictates that expenses will usually follow the outcome of the application as a whole." In Borissenko, the criterion of "novel issue" was not a factor argued by the parties and thus the issue of discretion to weigh the Regulation criteria was not considered by the arbitrator.

Although I was not presented with any case law that ordered a successful party to be responsible for the other party's expenses, there is no specific restriction that would prevent such a determination. For example, it may be possible that a case involves such novel issues that the principles of access to justice would outweigh the success criterion to such a great extent as to warrant awarding an unsuccessful party their expenses.

In the case before me, having found that the issue in this proceeding was not novel and given that TD General was completely successful, Ms. Kamel is not entitled to her expenses of the hearing. TD General did not pursue a claim for their expenses.

March 28, 2008

Elizabeth Nastasi Arbitrator

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

Ms. Kamel is not entitled to her expenses of the hearing.