Neutral Citation: 2010 ONFSCDRS 45 FSCO A08-000116

BETWEEN:

MUHAMMAD QURESHI Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Insurer

DECISION ON EXPENSES

Before: Edward Lee Heard: By written submissions received February 19, 2010 Appearances: Nancy Ng for Mr. Qureshi Carla Falkeisen for State Farm Mutual Automobile Insurance Company

The Applicant, Muhammad Qureshi, was injured in a motor vehicle accident on December 13, 2005. In a decision dated July 9, 2009, I dealt with his claims for statutory accident benefits under the Schedule.¹ The parties have now provided written submissions in regard to the issue of expenses.

The issue in this further expense hearing is the following:

Which of the parties is entitled to expenses incurred in respect of this arbitration hearing?

Result:

State Farm Mutual Automobile Insurance Company is entitled to its expenses in respect of the arbitration.
Mr. Qureshi shall pay State Farm Mutual Automobile Insurance Company its expenses in the amount of $3,000.00.

The substantive issues at the hearing were as follows:

Is Mr. Qureshi entitled to receive a weekly income replacement benefit of $277.04 from August 25, 2006 and ongoing, pursuant to section 4 of the Schedule?
Is Mr. Qureshi entitled to payments for housekeeping and home maintenance services in the amount of $100.00 per week from July 14, 2006 to December 12, 2007, pursuant to section 22 of the Schedule?
Is Mr. Qureshi entitled to payments for the cost of a Functional Abilities Examination prepared by Dr. Super in the amount of $1,325.29, pursuant to section 24 of the Schedule?

In my decision of July 9, 2009, I resolved these issues in the following manner:

Mr. Qureshi is entitled to receive a weekly income replacement benefit of $277.04 from August 25, 2006 to January 15, 2007, less a deduction under section 6(2) of the Schedule to account for the net income received during the three-and-a-half week return to work period in September and October 2006.
Mr. Qureshi is not entitled to payments for housekeeping and home maintenance services in the amount of $100.00 per week from July 14, 2006 to December 12, 2007, pursuant to section 22 of the Schedule.
Mr. Qureshi is not entitled to payments for the cost of a Functional Abilities Examination prepared by Dr. Super in the amount of $1,325.29, pursuant to section 24 of the Schedule.

Counsel were unable to agree as to the entitlement to expenses and the amount of expenses to be awarded. In their submissions, each argues that they should be entitled to their expenses. Each has provided me with a Bill of Costs.²

THE LAW:

The criteria for awarding expenses are set in the expense regulation of the Dispute Resolution Practice Code (Section F).

(1) The expenses set out in the Schedule are prescribed for the purpose of subsection 282 (11) of the Act. R.R.O. 1990, Reg. 664, s. 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.

(3) Upon the request of the insurer or the insured person, the arbitrator shall, for the purposes of awarding expenses, take into account all written offers to settle, if any,

(a) that were made after the conclusion of mediation and before the conclusion of the arbitration; and (b) that were made in accordance with the rules of practice and procedure applicable to the proceeding. O. Reg. 275/03, s. 4.

(4) If the arbitrator is requested to take into account a written offer under subsection (3), the arbitrator shall have regard to the terms of the offer, the timing of the offer, the response to the offer and the result of the proceeding. O. Reg. 275/03, s. 4.

ANALYSIS:

The hearing was conducted over a four day period. The applicant, a lay witness, the applicant’s family doctor, and two expert witnesses called by State Farm Mutual Automobile Insurance Company (‘State Farm’) were heard. The arguments, testimony and issues of fact and law were straightforward. No novel issues were raised during the course of the hearing. I did not find the conduct of the parties or the parties’ representatives hindered, obstructed or prolonged the proceedings. Nor did I find any aspect of the proceeding improper, vexatious or unnecessary.

In regard to each party’s degree of success in the outcome of the proceeding, I find that State Farm was completely successful in refuting the applicant’s claims for housekeeping and home maintenance benefits, and for the cost of a Functional Abilities Evaluation.

Both parties achieved a measure of success in regard to the applicant’s claim for income replacement benefits. At the hearing, the applicant sought income replacement benefits of $277.04 per week from August 25, 2006 and ongoing. In my decision, I awarded the applicant income replacement benefits of $277.04 per week for approximately five months, from August 25, 2006 to January 15, 2007. According to the applicant, the total amount of this award (including interest) was $8,731.07.³

One other factor was brought to my attention. State Farm had requested that I take into account a written offer⁴ to settle made to the applicant on December 5, 2008. Nevertheless, that offer sought to settle the application on a full and final basis, inclusive of all accident benefits, costs and interest. The present arbitration only resolved issues of income replacement benefits, housekeeping and a single examination. For this reason, I am not convinced that the settlement offer is relevant to any award I make in regard to the expenses of this arbitration.

The total bill of costs submitted by State Farm amounted to $11,959.16 ($2,500 in legal fees and $9,459.16 for disbursements). The total bill of costs submitted by the applicant amounted to $6,810.15 ($5,778.90 for legal fees and $1,031.25 for disbursements).

Although both parties achieved partial success, State Farm’s degree of success in the outcome of the proceeding was greater than that of the applicant. For that reason, I find that State Farm is entitled to part of its expenses incurred in respect of this arbitration proceeding.

I now turn to the Bill of Costs submitted by State Farm. The total in disbursements sought by the insurer was $9,459.16. The applicant objected to the following items:

Atchinson & Denman Court Reporters: $962.34;
Dr. John A. Stewart clinical notes and records: $49.00;
Minister of Finance OHIP summary: $100.00;
Minister of Finance—decoded OHIP summary: $20.00; and,
Dr. Garson Conn preparation and attendance fee together with preparation fee of Tony Jung and Ruth Billet: $6,343.75.

I agree that the expense regulation does not allow a party to claim a court reporting service as a disbursement. I also agree that the charges for obtaining OHIP and medical records should be borne by the party that requested them, as suggested by Practice Note 4 of the Dispute Regulation Practice Code.

Further, I agree that the expense regulation only allows witness fees for those witnesses who attend at the hearing, and not for their preparation. Therefore, no preparation fees are permissible for Dr. Conn, Tony Jung or Ruth Billet, and neither Tony Jung nor Ruth Billet testified before me. As well, the expense regulation allows a maximum of $1,600.00 per day for an expert witness who testifies at a hearing. In the present case, Dr. Conn testified for approximately the same length of time as Dr. Sekyi-Otu, another expert whose witness fee of $1,475.00 was uncontested. I find it therefore appropriate to award the same amount for Dr. Conn.

The total for disbursements after subtracting the unallowable amounts is $3,459.07. This amount plus the solicitor’s costs gives a sum of $5,959.07. Given the shared success of the parties in regard to the issue of income replacement benefits, and the total success of State Farm in regard to the other issues, I find it appropriate to award State Farm $3,000.00 as expenses in respect of the arbitration.

April 13, 2010

Edward Lee Arbitrator

Financial Services Commission of Ontario