Maliha Masroor v. State Farm Mutual Automobile Insurance Company, 2010 ONFSCDRS 27

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2010 ONFSCDRS 27

FSCO A07-002725

BETWEEN:

MALIHA MASROOR

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before: Edward Lee

Heard: By telephone conference call on January 29, 2010.

Appearances: Mark Phillips for Mrs. Masroor

Joanna Cox for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Maliha Masroor, was injured in a motor vehicle accident on March 31, 2006. In a decision dated August 11, 2009, I dealt with her claims for statutory accident benefits under the Schedule.¹ I also found that State Farm was entitled to its reasonable expenses in this matter.

State Farm submitted a Bill of Costs to Mrs. Masroor but the parties have disagreed as to the reasonableness of that bill. They seek an order in this regard.

The issue in this further hearing is:

What is the amount of the expenses to which State Farm is entitled in respect of this arbitration hearing?

Result:

Mrs. Masroor shall pay State Farm $4,861.18 as expenses in respect of this arbitration.

A telephone conference was conducted in this matter and oral representations were made by both sides. Prior to the conference, I received written submissions from State Farm and Mrs. Masroor, including a Bill of Costs.²

Legal Fees:

Counsel for State Farm billed a total of 57.60 hours at $92.34/hour for preparation and time for the arbitration, as well as 53.10 hours for a law clerk at $23.00/hour. A total of $6,867.08 was sought in legal fees.

Mrs. Masroor argued that the amount of legal fees sought was excessive in that the arbitration was conducted and completed in only two days (a total time of 10.2 hours). Furthermore, the case was not complex. No legal issues were involved. The decision was based on facts and credibility.

In McLellan and Aviva, the arbitrator held the following:

The general arbitration approach towards assessing expenses is set out in Henri and Allstate Insurance Company of Canada (OIC A-007954, August 8, 1997). Then Arbitrator Makepeace held that “[a] line-by-line assessment of the expenses claimed is not appropriate. Rather, the Arbitrator should make a global assessment of reasonable expenses.” Arbitration decisions have held, subject to special circumstances, that the appropriate approach is a ratio of preparation time (and other services provided before a hearing) to attendance at an arbitration hearing of between 4:1 and 1:1.³

In the present case, the decision was not decided on complex legal issues, but on facts and findings of credibility. Three witnesses were heard; two were lay witnesses and one was a medical witness. The case was straightforward. Counsel for State Farm was well-prepared, but the hearing was not complex. I find that the 110.7 hours of legal fees billed was excessive for an uncomplicated matter that lasted but 10.2 hours. In this case, I find it more appropriate to award a ratio of 1.25:1.00 for preparation time to hearing time.

Therefore, I award counsel 12.75 hours of preparation time plus the 10.2 hours for attendance at the hearing giving a total of 22.95 hours ($2,119.20). I allow the law clerk 12.75 hours of preparation time at $23.00 per hour ($293.25).

Disbursements:

Mrs. Masroor disputed the disbursements for the process server fees, the courier expenses and the parking expenses.

I am not convinced I should vary the amounts sought for the process servers. It appears the greater cost in the second bill is a result of the process server having to travel a greater distance to serve the documents.

I agree that there is no evidence to substantiate the courier fee of $38.74, and the parking fee is also inappropriate as it is not contemplated in the Expense Regulation. Finally, I note that there is also no authority under the Expense Regulation to award the fee for the court reporting service of $537.00. This too, must be struck from the Bill of Costs.

CONCLUSION:

Accordingly, the legal fees are reduced to 22.95 hours at $92.34/hour for counsel, and 12.75 hours for the law clerk at $23.00/hour. The disbursements are reduced by the courier fee of $38.74, $14.00 for parking and $537.00 for the court reporting service. The rest of the Bill of Costs, not having been contested, remains unchanged.

Taking this into account, Mrs. Masroor shall pay State Farm $4,861.18 as expenses in respect of

this arbitration.

March 9, 2010

Arbitrator

Edward Lee

Date