Rajeev Kashyap v. Security National Insurance Co. / Monnex Insurance Mgmt. Inc., 2010 ONFSCDRS 62

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2010 ONFSCDRS 62

FSCO A08-000498

BETWEEN:

RAJEEV KASHYAP

Applicant

and

SECURITY NATIONAL INSURANCE CO./

MONNEX INSURANCE MGMT. INC.

Insurer

DECISION ON EXPENSES

Before: Judith Killoran

Heard: Written submissions received by February 18, 2010 and a telephone conference call on February 23, 2010.

Appearances: Mark Phillips for Mr. Kashyap

Alexander Lempp for Security National Insurance Co./Monnex Insurance Mgmt. Inc.

Issues:

The Applicant, Rajeev Kashyap, was injured in a motor vehicle accident on April 5, 2006. In a decision dated November 18, 2009, 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:

Mr. Kashyap is not entitled to receive a medical benefit for treatment plans from Prime Health Recovery Centre dated November 15, 2006 and May 22, 2007 respectively, pursuant to section 14 of the Schedule.
Mr. Kashyap is not entitled to payment of $100 weekly from April 5, 2006 to March 31, 2008 for housekeeping and home maintenance services, pursuant to section 22 of the Schedule.
Mr. Kashyap is not entitled to payment of $1,325.29 for a Functional Abilities Evaluation, pursuant to section 24 of the Schedule.
Mr. Kashyap is not entitled to interest under subsection 46(2) of the Schedule.

The issue in this further hearing is:

Is either party entitled to its expenses incurred in respect of the arbitration hearing?

Result:

Each party shall bear its own expenses.

EVIDENCE AND ANALYSIS:

Subsection 282(11) of the Insurance Act grants arbitrators the power to award expenses either to an insured person or an insurer with respect to an arbitration proceeding in accordance with the criteria found in section 12 of Ontario Regulation 664, as amended (the “Expense Regulation”), and echoed in Rule 75.2 of the Dispute Resolution Practice Code. The relevant criteria to be considered are as follows:

a) Each party’s degree of success in the outcome of the proceeding;

b) Any written offers to settle made in accordance with Rule 76;

c) Whether novel issues are raised in the proceeding;

d) The conduct of a party or party’s representative that tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders; and

e) Whether any aspect of the proceeding was improper, vexatious or unnecessary.

INSURER’S SUBMISSIONS

Security National submitted that only one criterion under the Dispute Resolution Practice Code is applicable in the case before me as this was a relatively straightforward two-day hearing with no novel or complex issues. As it was successful on all of the issues at arbitration, the only criterion to be considered when awarding expenses is its degree of success in the outcome of the proceedings. Security National argued that FSCO decisions have moved toward a more results based approach as a result of amendments to the Expense Regulation. It also relied on the causation issue which was resolved in its favour to argue that it was unreasonable of Mr. Kashyap to proceed to hearing. For all of these reasons, Security National argued that it should be awarded its expenses of the hearing.

Applicant’s Submissions

Mr. Kashyap submitted that Security National paid $2462 plus interest for a treatment plan dated August 21, 2006 from Prime Health Recovery Centre on the final day of hearing, claiming that it was an oversight that resulted in the non-payment. However, it was necessary for Mr. Kashyap to proceed to hearing in order to obtain payment as it was only after hearing testimony that Security National conceded entitlement. Mr. Kashyap invoked criteria (d) and (e) and stated that Security National prolonged the proceedings and acted improperly by not making a decision about paying the treatment plan prior to the hearing. Mr. Kashyap submitted that Security National had access to all the medical evidence prior to the arbitration, examined Mr. Kashyap under oath on December 7, 2006 and provided no reasonable explanation for its failure to concede the issue prior to the hearing. Security National acknowledged that it had breached the Schedule by not responding to the treatment plan within the required timeline. It responded by arguing that it reduced the hearing time by resolving the issue at the hearing.

Mr. Kashyap also argued that the causation issue was resolved on a balance of probabilities with the finding that the injuries sustained by Mr. Kashyap were “more likely” caused by the workplace assault than the motor vehicle accident. It was not unreasonable to proceed to arbitration on legitimate issues, which were fact-dependent, and required the determination of an arbitrator.

Mr. Kashyap also asked that I take into consideration that the insurer did not make a written offer to settle while he did make a written offer to settle on August 17, 2009.

CONCLUSION

I do not agree that the only criterion for my consideration when awarding expenses in the case before me is Mr. Kashyap’s overall lack of success at arbitration. I have carefully considered the totality of the criteria listed in the Expense Regulation. In Gray and Zurich Insurance Company²,

Director’s Delegate Draper cautioned:

Arbitrators now have an obligation to consider the legislated criteria, including the result, applying them to both parties. However, I agree with the arbitrator that the criteria do not reflect a move to the kind of results-based approach used by the courts. Success is only one criterion in an open ended list and, therefore, must be weighed against the other relevant considerations.

I find that the failure of Security National to comply with the Schedule when dealing with the August 21, 2006 treatment plan prolonged the proceeding. The issue of the treatment plan should have been resolved long before the hearing date. Also, even though Mr. Kashyap forwarded to Security National a written offer to settle prior to the hearing, there was no response by Security National to the offer, which eliminated the possibility of resolving any issues prior to the hearing. For these reasons, I find that each party shall bear its own expenses.

May 17, 2010

Judith Killoran

Arbitrator

Date