Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2008 ONFSCDRS 7

FSCO A03-001739

BETWEEN:

NORBERT J. BOYER

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

DECISION ON EXPENSES

Before: Eban Bayefsky

Heard: October 5, 2007, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: Donata Di Iorio for Mr. Boyer

James Leone for Allstate Insurance Company of Canada

Issues:

The Applicant, Norbert J. Boyer, was injured in a motor vehicle accident on July 24, 2001. In a decision dated May 30, 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:

Allstate shall pay Mr. Boyer weekly income replacement benefits from July 24, 2003.
The deduction of Mr. Boyer’s post-accident income shall not be calculated on the basis of his 2004 business expenses or the assistance he received from his wife in 2003 and 2004.

3. Allstate shall pay Mr. Boyer a medical benefit for services provided by Dr. Hoff, in the amount of $13,080.

4. Allstate shall pay Mr. Boyer a special award in the amount of $5,000.

5. Allstate shall pay Mr. Boyer interest on the income replacement benefits that were reduced to 50% (to the extent that interest has not already been paid on this amount), on Dr. Hoff’s outstanding account of $13,080 and on the income replacement benefits owing as of July 24, 2003.

The issue in this further hearing is:

Is Mr. Boyer entitled to the following expenses incurred in respect of this arbitration hearing?

i. Expert witness fees for Dr. K.G. Sie ($1,995), Dr. J.D. Salmon ($1,498), Dr. T. Hoff ($1,900) and Dr. P. Moran ($1,600);

ii. Mr. Kazdan’s legal fees at an hourly rate of $150;

iii. Arbitration hearing legal fees for Mr. Kazdan, two junior lawyers and four law clerks in the amount of $44,885.17;

iv. Expense hearing legal fees for Ms. Di Iorio in the amount of $369.35; and

v. Photocopy expenses in the amount of $8,341.43.

Result:

Mr. Boyer is entitled to the following arbitration expenses:

i. Expert witness fees in the amounts of $1,100, $900, $1,000 and $600, respectively, for Drs. Sie, Salmon, Hoff and Moran;

ii. Mr. Kazdan’s legal fees at an hourly rate of $125;

iii. Arbitration hearing legal fees in the amount of $31,147.07; and

iv. Expense hearing legal fees in the amount of $196.97.

If required, the parties may make submissions on the issue of photocopy expenses, in accordance with the schedule set out in the body of this decision.

EVIDENCE AND ANALYSIS:

Background

On June 29, 2007, counsel for Mr. Boyer, Ms. Di Iorio, wrote to the Commission requesting a date for an expense hearing in this matter. On August 7, 2007, the Commission notified the parties that the expense hearing would be heard on October 5, 2007. On September 5, 2007, Ms. Di Iorio filed her firm’s Bill of Costs, which she indicated had been served on Allstate Insurance Company (“Allstate”) on June 28, 2007.

At the expense hearing (and after counsel had been given an opportunity to discuss and narrow the issues), counsel indicated that disputes remained in respect of the accounts of four of Mr. Boyer’s medical witnesses, photocopying charges, Mr. Kazdan’s hourly rate for legal fees, Mr. Boyer’s total legal fees for the arbitration hearing and Ms. Di Iorio’s legal fees for the expense hearing.

(i) Doctors’ accounts

Pursuant to section 282(11) of the Insurance Act,² an arbitrator “may award, according to criteria prescribed by the regulations…all or part of such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations, to the maximum set out in the regulations.”

Pursuant to section 5(3) of the Schedule to the Expense Regulation³, the maximum amount that may be awarded for the “attendance of an expert witness is $200 per hour of attendance, up to a maximum of $1,600 per day.” Pursuant to section 5(4), a party may be awarded the expenses paid to “an expert witness for preparation for a hearing at which the witness testifies…to a maximum of $500.”

Drs. Sie, Salmon, Hoff and Moran testified at the hearing. Mr. Boyer submitted invoices from Dr. Sie in the amount of $1,995 in respect of his attendance at the hearing. However, the invoices pertain to “report writing,” as well as to “report review” and a two and a half hour telephone conversation on January 10, 2006 (approximately a week prior to the commencement of the hearing). Dr. Sie testified for approximately 3 hours on June 13, 2006. Based on the Bill of Costs, I am prepared to find that Dr. Sie’s telephone call on January 10, 2006 was with Mr. Kazdan in preparation for the hearing. I award Mr. Boyer $500 and $600, respectively, in respect of Dr. Sie’s preparation for and attendance at the hearing.

Mr. Boyer submitted an invoice from Dr. Salmon in the amount of $1,498. Dr. Salmon’s invoice notes $600 for three hours of preparation time, $800 for attendance at the arbitration on June 12, 2006 (with a “minimum charge 1/day”) and GST of $98. Pursuant to section 5(4) of the Schedule to the Expense Regulation, Mr. Boyer is entitled to a maximum of $500 for Dr. Salmon’s preparation time. Dr. Salmon testified for approximately 2 hours on June 12, 2006. I award Mr. Boyer $500 and $400, respectively, in respect of Dr. Salmon’s preparation for and attendance at the hearing.

Mr. Boyer submitted an invoice from Dr. Hoff in the amount of $1,900. Dr. Hoff noted an hourly rate of $200 and, in respect of the “Boyer arbitration,” four hours in January 2006, three hours on June 12, 2006 and two and a half hours on June 13, 2006. Dr. Hoff testified at the hearing on June 13, 2006 for approximately 2 hours. I find it reasonable to infer that Dr. Hoff’s time on June 12, 2006 was in preparation for his attendance at the hearing on June 13, 2006. I am also prepared to accept Dr. Hoff’s account of 2.5 hours of attendance on June 13, 2006. I award Mr. Boyer $500 and $500, respectively, in respect of Dr. Hoff’s preparation for and attendance at the hearing.

Ms. Di Iorio indicated that she did not have an invoice for Dr. Moran. Dr. Moran testified for approximately 3 hours on June 12, 2006. I award $600 in respect of Dr. Moran’s attendance at the hearing.

(ii) Mr. Kazdan’s hourly rate

Pursuant to Rule 78.1 of the Dispute Resolution Practice Code (the “Code”) the maximum amount that may be awarded for legal fees is an amount calculated using legal aid rates for civil matters before the Ontario Superior Court of Justice or the legal aid rate adjusted to include, where appropriate, the prescribed experience allowance.

Pursuant to section 3(2)5 and Items 1.1 of Part I and 24.2 of Part IV of the Table to Schedule 2 of Ontario Regulation 107/99, as amended, under the Legal Aid Services Act, 1998, the base rate of $73.87 per hour (for services performed under a certificate issued after April 1, 2003 and before April 1, 2007), can be increased by the “experience allowance” of 25 per cent to $92.34 if counsel has practiced litigation for at least ten years, including at least four years of civil litigation. Mr. Kazdan was called to the Bar in 1994 and had the requisite ten years of experience to receive the increased hourly rate of $92.34.

Rule 78.1 also states that “where an adjudicator is satisfied that a higher amount for legal fees to an insured person is justified, an hourly rate of up to $150 may be awarded.” In order to determine whether a higher hourly rate should be awarded, arbitrators have considered the experience of counsel, the complexity of the case, the duration of the hearing, the importance of the issues and the conduct of the parties.⁴ Mr. Kazdan has considerable experience appearing before the Commission, the case involved reasonably complex issues concerning the nature and legitimacy of Mr. Boyer’s disability, the hearing was fairly lengthy in that it took nine days to complete (with written submissions as well), the issues were of importance to Mr. Boyer given the extent of his disability and Mr. Kazdan conducted the case in a professional and efficient manner. In these circumstances, I find that an hourly rate of $125 is reasonable.

(iii) Mr. Boyer’s total legal fees

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, namely, the parties’ respective success in the proceeding, any written offers to settle, whether novel issues were raised, the parties’ conduct in the proceeding and the propriety of the proceeding.

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.⁵

Mr. Boyer sought legal fees for the following individuals and times:

Peter Kazdan (lead counsel)

233 hours

Donata Di Iorio (junior counsel)

21.9 hours

Fatima Vieira (junior counsel)

4.5 hours

Anna Persaud (law clerk)

0.2 hours

Carey Calway (law clerk)

143.3 hours

Julie Modelovic (law clerk)

0.1 hours

Stephen Gross (law clerk)

16.1 hours

Mr. Boyer was successful on the principal issues in the arbitration, being unsuccessful on only a relatively minor quantum issue. Allstate was found to be liable for a modest special award. The parties did not bring any written offers to settle to my attention. The case did not raise novel issues. The hearing was conducted over nine days, involving approximately fifty hours of hearing time, and both parties conducted the hearing in a professional and efficient manner. The case raised legitimate (and, in fact, relatively involved) issues for determination and was not otherwise improper. In all of the circumstances, I find that a ratio of preparation time to hearing time of 3:1 should be applied in this case. For Mr. Kazdan, this would be a total of 200 hours (150 hours in preparation time for 50 hours in hearing time). I also award five hours in respect of Mr. Kazdan’s work following the arbitration (as set out in the Bill of Costs). Finally, based on the Bill of Costs (the specifics of which Allstate did not contest), I am prepared to acknowledge the assistance provided by Mr. Kazdan’s juniors and law clerks prior to and at the hearing, including, in particular, that of Ms. Calway. In my view, this represents a modest and reasonable adjustment to the amount awarded in respect of Mr. Kazdan’s work on this arbitration. I am, therefore, prepared to award 205 hours of Mr. Kazdan’s time (at $125 per hour), 26.4 hours of the juniors’ time (at $73.87) and 155.3 hours of the clerks’ time (at $23 per hour), for a total of $31,147.07.

(iv) Ms. Di Iorio’s fees of the expense hearing

I find that Mr. Boyer is entitled to two-thirds of his expenses in respect of the expense hearing, based on his general (although not complete) success on the issues raised, as well as Ms. Di Iorio’s legitimate concern that she was not aware of Allstate’s concerns with the Bill of Costs until the day of the expense hearing. I, therefore, award Mr. Boyer legal fees in respect of Ms. Di Iorio’s preparation and attendance at the expense hearing as follows: two-thirds of 4 hours at $73.87 per hour, for a total of $196.97. For greater certainty, this includes any additional costs Mr. Boyer might incur in addressing the issue of photocopies as discussed below.

(v) Photocopying charges

Mr. Boyer sought $8,341.43 in photocopying charges from Kopyrite. Ms. Di Iorio did not submit a receipt for these services. Mr. Leone submitted that proof ought to have been provided to support this significant expense. Ms. Di Iorio noted that Allstate had not questioned this amount until the day of the expense hearing and, therefore, she could not properly respond to this objection.

Allstate did not object to Mr. Boyer’s general entitlement to expenses. Rule 79 of the Code (under which the issue of expenses was to be determined, as set out in my May 30, 2007 decision on the merits) suggests that where the general issue of entitlement to expenses has been determined, the parties should identify disputed expense items and exchange supporting documentation. In this case, the expense hearing occurred without Allstate having objected to Mr. Boyer’s general entitlement to expenses or to his specific claims for expenses.

I find it reasonable to infer that Mr. Boyer was required to make a significant number of photocopies in this proceeding, given the large number of exhibits and medical experts involved in this case. I am concerned that Mr. Boyer has not had a full opportunity to address the issue of photocopying charges. In these circumstances, I am prepared to allow Mr. Boyer until January 31, 2008 to provide Allstate supporting documentation in respect of his request for photocopying expenses, and I encourage the parties to work together to resolve this matter. Should the parties not be able to resolve the issue, Allstate shall serve and file written submissions by February 8, 2008. Mr. Boyer shall serve and file any responding written submissions by February 15, 2008. I will decide the matter after this point.

January 17, 2008

Eban Bayefsky Arbitrator

Date