Mrs. S v. Economical Mutual Insurance Company, 2010 ONFSCDRS 142

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2010 ONFSCDRS 142

FSCO A08-001275

BETWEEN:

Mrs. S

Applicant

and

ECONOMICAL MUTUAL INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before: William J. Renahan

Heard: Written submissions received by October 5, 2010.

Appearances: Michael Rubin for Mrs. S

Nicholaus de Koning for Economical Mutual Insurance Company

Issues:

The Applicant, Mrs. S, was injured in a motor vehicle accident on November 22, 2006. In a decision dated February 12, 2010, I dealt with her claims for statutory accident benefits under the Schedule.¹ In a decision dated May 31, 2010, I awarded Economical its expenses of the arbitration proceeding. The parties could not agree on the amount of expenses and in a letter to the parties dated June 1, 2010, I set out timelines for making written submissions on the amount. Shortly after the expiration of the timeline for Mr. de Koning for making written submissions, Mr. Rubin wrote to Mr. de Koning and asked whether he was abandoning his claim for expenses and raised the issue before me whether Mr. de Koning was out of time to make submissions.

I accept Mr. de Koning’s submission that he did not receive my letter of June 1, 2010 setting out the timelines and therefore accepted his late submissions on the amount of expenses.

The issue in this further hearing is:

What is the amount of Economical’s expenses of the arbitration proceeding?

Result:

The amount of expenses is $8,184.54 inclusive of GST.

EVIDENCE AND ANALYSIS:

The matter proceeded by written submissions.

The hearing took place over four days. Mr. de Koning asked that I assess legal fees at $7,007.90 and disbursements at $1,740.60 for a total of $8,748.50.

In general, Mr. Rubin was satisfied with Mr. de Koning’s submissions. He objected to Mr. de Koning’s disbursement of $619.96 for mileage and parking.

I agree that the legal fees are within the criteria of the Expense Regulation and assess legal fees at $7,007.90.

Mr. Rubin submitted that the Applicant should not have to bear the cost of the Insurer retaining counsel in Waterloo for a hearing in Toronto.

Mr. de Koning relied on Seyed and Federation Insurance Company of Canada and Gary Mazin², a case in which he acted for the insurer, as authority for the proposition that disbursements for mileage of out-of-town counsel are recoverable. In that case Arbitrator Feldman wrote:

With respect to Mr. de Koning’s travel, I see no reason why an applicant (even an unsuccessful one) should have to pay a greater amount because the insurer has chosen to retain counsel who lives outside the area where the proceedings are being held. While the Expense Regulation permits an insurer to claim for its counsel’s travel expenses (i.e., disbursements for mileage and other out-of-pocket expenses), there is no similar provision with respect to legal fees during travel and Federation has filed no cases in support of this part of its claim. [footnotes omitted].

At issue was whether an hourly rate was recoverable for travel time and Arbitrator Feldman ruled that it was not. Disbursements for mileage were not in issue and I do not take this as authority for the proposition that such disbursements are recoverable for out-of-town counsel.

In Abdala-Amin, Ahmed and Elmi and Guarantee Company of North America³, Arbitrator Sone denied a claim for mileage charged for out-of-town counsel as not reasonable and in Cook and Pilot Insurance Company⁴, Arbitrator Kominar denied a disbursement for overnight accommodation for out-of-town counsel.

Section 6 of the Expense Regulation lists the expenses that “may be awarded” to a party or party’s lawyer. Although travelling expenses are included in the list, the operative words allowing expenses are permissive, not mandatory.

In my opinion, if an expense for travelling time is not recoverable where no reasonable justification is advanced for retaining out-of-town counsel, then additional disbursements associated with retaining out-of-town counsel are not recoverable in the absence of reasonable justification. I heard no reasonable justification for retaining out-of-town counsel and do not allow a disbursement for mileage expenses.

Section 6 of the Expense Regulation is quite broad and covers parking charges.⁵ Counsel incurs parking expenses whether they are in-town or from out-of-town.

I allow $56 for four days of underground parking and disallow $563.96, inclusive of GST, for mileage. Disbursements are assessed at $1,176.64 for total fees and disbursements of $8,184.54 inclusive of GST.

December 14, 2010

William J. Renahan

Arbitrator

Date