April Piche (Now known as April Loyst) v. Allstate Insurance Company of Canada, 2010 ONFSCDRS 88

Financial Services Commission of Ontario

Neutral Citation: 2010 ONFSCDRS 88 Appeal: P08-00013

OFFICE OF THE DIRECTOR OF ARBITRATIONS

APRIL PICHE (Now known as April Loyst) Appellant

and

ALLSTATE INSURANCE COMPANY OF CANADA Respondent

BEFORE: David Evans

REPRESENTATIVES: Andrew R. Kerr for Ms. Loyst Ian D. Kirby for Allstate Insurance Company of Canada

HEARING DATE: July 12, 2010 by teleconference

APPEAL EXPENSES ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Allstate Insurance Company of Canada is entitled to its legal fees and disbursements of this appeal proceeding fixed in the amount of $2,164.38, inclusive of GST.

July 19, 2010

David Evans Director’s Delegate

REASONS FOR DECISION

I. NATURE OF THE APPEAL

In a decision dated November 4, 2009, I dismissed Ms. Loyst’s appeal of the arbitrator’s decision dated March 6, 2008. Allstate Insurance Company of Canada now seeks its expenses of responding to the appeal.

II. BACKGROUND

Ms. Loyst was injured in an automobile accident on November 14, 2003. Pursuant to the SABS‑1996,¹ Allstate initially paid income replacement benefits (IRBs), medical/rehabilitation expenses, and attendant care and housekeeping benefits. After these benefits were terminated, Ms. Loyst mediated and then arbitrated her continuing claims.

In his first decision dated August 3, 2007, the Arbitrator found that, despite Allstate’s allegation to the contrary, Ms. Loyst was driving the car involved in the accident. However, his findings on her credibility played a role in his subsequent dismissal of her claims.

Ms. Loyst appealed that dismissal and requested a stay of the repayment the Arbitrator had ordered. The stay was denied by Director’s Delegate Blackman in a decision dated May 9, 2008. I subsequently dismissed the appeal on the substantive issues. On June 24, 2010, the Arbitrator issued an expense decision ordering each party to bear their own arbitration expenses.

III. ANALYSIS

Pursuant to s. 282(11) of the Insurance Act, an arbitrator “may award, according to criteria prescribed by the regulations, to the insured person or the insurer, 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.” Subsection 283(7) of the Act provides that ss. 282 (10) to (11.2) apply with necessary modifications to appeals. Subsection 12(2) of Ontario Regulation 664, R.R.O. 1990, as amended, in turn provides that an arbitrator or delegate shall consider only the criteria set out therein for “the purposes of awarding all or part of the expenses incurred in respect of an arbitration proceeding.”

Allstate relies on criterion 1 of s. 12(2): “Each party’s degree of success in the outcome of the proceeding.” The Arbitrator’s recent arbitration expense decision discusses this criterion. He concluded that “each party should bear her/its own expenses” because Ms. Loyst was successful in the preliminary issue hearing, Allstate was successful in the main hearing, and “the parties probably incurred roughly the same expenses for both parts of the hearing.”

On appeal, there was also a preliminary issue, referred to above, but Ms. Loyst was unsuccessful both there and in the main appeal. Allstate was thus entirely successful on appeal.

Ms. Loyst submits that criterion 3 applies: “Whether novel issues are raised in the proceeding.” In Szabo and CAA Insurance Company (Ontario), (FSCO P03‑00015, June 21, 2004), the Delegate applied criterion 3 and denied the successful respondent its expenses because it was the first appeal to consider the application of s. 48 the SABS. Although the Delegate ultimately endorsed CAA’s reading of s. 48, she found this was an appeal that deserved to be heard because the outcome was not obvious, the arbitrator’s reasons did not address the issue at any length, and this novel issue of general importance required consideration of the legislative objective and context of s. 48.

In contrast to Szabo, however, there was no novel issue or reconsideration of an issue of general importance here. Rather, this appeal focused mostly on Ms. Loyst’s claim for (a) funding for a university education to pursue a new career goal and (b) an increased IRB benefit based on a reallocation of income from a roofing business. The appeal turned entirely on the specific facts of this case as the Arbitrator found that (a) the university education sought was not required for Ms. Loyst’s new career goal and (b) Ms. Loyst’s alleged business income was unverifiable.

Since Allstate was entirely successful on appeal, and there are no other relevant factors to consider, it is entitled to its reasonable and allowable legal fees and disbursements incurred in respect of the appeal proceeding.

Ms. Loyst does not dispute the modest claimed disbursements of about $80, or the counsel fee of $92.34 an hour, but does dispute the total of 21.5 hours in counsel time. She submits that the portions devoted to “reporting to client” and the expenses of this expense hearing itself should not be included in the total assessment. However, the Schedule to the Expense Regulation in ss. 3(1)1 and 3(1)4 specifically provides that the legal fees payable by the insured or the insurer may be awarded for all services performed both before and after an appeal. Communication with the client is certainly recoverable in that context and fees for such services are routinely allowed: see for instance Vellipuram and State Farm Mutual Automobile Insurance Company, (FSCO A05‑002629, March 30, 2007). As for the expenses incurred in the determination of legal expenses, there is no explicit or implicit restriction regarding the powers of adjudicators in awarding expenses in this regard: Jadavji and Security National Insurance Co./Monnex Insurance Mgmt. Inc., (FSCO P08-00033, May 22, 2009). Further, in this case I find such services appropriate and reasonable.

Ms. Loyst submits that the time devoted to preparation for the appeal hearing is disproportionate, being approximately 12 hours for a hearing that lasted 2.1 hours. However, she provided nine pages of submissions, to which Allstate responded with six. I find that the time claimed to properly prepare for the appeal hearing is reasonable. I am not persuaded that the hours claimed should be reduced.

Accordingly, I find that Allstate is entitled to its submitted legal fees and disbursements of this appeal proceeding fixed in the amount of $2,164.38, inclusive of GST.

July 19, 2010

David Evans Director’s Delegate

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.