Financial Services Commission des
Commission services financiers
of Ontario de l’Ontario
Neutral Citation: 2012 ONFSCDRS 117
FSCO A09-000167
BETWEEN:
MR. C.
Applicant
and
COACHMAN INSURANCE COMPANY
Insurer
DECISION ON EXPENSES
Before: Joyce Miller
Heard: Written submissions received by February 17, 2012
Appearances: Renee Vinett for Mr. C.
Mr. Stanley Tessis and Kerri P. Knudsen for Coachman Insurance Company
Issues:
The Applicant, Mr. C., was injured in a motor vehicle accident on December 1, 2006. I dealt with the Preliminary Issue of whether Mr. C. was catastrophically impaired as a result of the accident. I made the following orders, while reserving on the issue of expenses:
Mr. C. is catastrophically impaired pursuant to clause 2(1.2)(g) of the Schedule.1
If needed, the parties may speak to the issue of expenses within 30 days of this decision.
The issue in this further hearing is:
- Is Mr. C. entitled to his expenses incurred in respect of this arbitration hearing?
Result:
- Mr. C.’s expenses in this arbitration hearing are fixed at $60,000 inclusive of GST and HST.
THE LAW
Subsection 282(11) of the Insurance Act provides that:
The 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.
The criteria for determining entitlement to expenses of an arbitration proceeding are enumerated in section 12(2) of Ontario Regulation 664, R.R.O. 1990, as amended. The criteria are:
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.
Whether the insured person refused or failed to submit to an examination as required under section 42 of the Schedule or refused or failed to provide any material required to be provided under subsection 42(10) of the Schedule.
The amount of expenses and disbursements which I may award are set out in section 3 of the Schedule to the Expense Regulation (“Expense Guideline”)2, which states:
(1) The legal fees payable by the insured person or the insurer for the following matters may be awarded:
For all services performed before an arbitration, appeal, variation or revocation hearing.
For the preparation for an arbitration, appeal, variation or revocation hearing.
For attendance at an arbitration, appeal, variation or revocation hearing.
For services subsequent to an arbitration, appeal, variation or revocation hearing.
(2) The number of hours for which legal fees may be awarded shall be determined by the arbitrator, having regard to the criteria set out in subsection 12(2) of this Regulation.
In the decision of Henri and Allstate Insurance Company of Canada,3 Arbitrator Makepeace outlined a number of general principles that have emerged from the arbitration decisions with regard to the assessment of arbitration expenses. These principles include the following:
The overriding consideration in fixing arbitration expenses is reasonableness.
A line-by-line assessment of the expenses claimed is not appropriate. Rather, the Arbitrator should make a global assessment of reasonable expenses.
In deciding the issues in this expense hearing, namely, what is the amount of legal fees, hourly rate and disbursements that Mr. C. is entitled to for the services rendered by his counsel, I will adhere to the above principles of “reasonableness” and “global assessment.”
EVIDENCE
Although Mr. C. requested and received a one month’s extension to provide his submissions on expenses, Mr. C. provided very little by the way of submissions to support his claim for expenses in the amount of $114,811.55 ($68,875.29 for legal fees and $45,936.26 for disbursements).4 Not only did Mr. C. not provide any law to substantiate his claim for expenses, including any law to support the claim for expenses that exceed the Guidelines, he only offered, but did not provide the dockets to support his claim.
When I asked for a copy of the dockets, although not requested, Mr. C. provided additional submissions, but again did not provide any law to support his claim.
Coachman on the other hand, provided very detailed submissions and the law to support its submissions.
COACHMAN’S SUBMISSIONS
Coachman engaged in an in-depth critique of Mr. C.’s legal fees, expert fees and disbursements as follows:
(a) Legal Fees
Coachman submits that Mr. C. provided dockets that are vague, excessive and, often do not relate to the issues involved in the preliminary hearing. Furthermore, they include duplicate billable hours and time for administrative tasks.
Coachman submits that pursuant to Ms. G. and Pilot Insurance Company5 it does not intend to review the docket line-by-line. Instead, Coachman submits that Mr. C.’s lawyers’ hours should be reduced by 25% based on the following:
(1) Mr. C. submitted dockets for all work completed by Mr. C.’s lawyers, regardless of whether they related to the preliminary issue of whether the insured suffered a catastrophic impairment. For example:
The issue of catastrophic impairment was not in dispute at the time of the pre-hearing and accordingly any time docketed on this issue prior to the pre-hearing is not compensable.
Time claimed spent by lawyers reviewing the issues related to attendant care does not relate to the preliminary issue and therefore are not compensable.
Time spent by lawyers reviewing for the Children’s Aid Society file on July 29, 2010 should not be compensated in light of the fact that on July 15, 2010, an order was made, confirmed by written reasons dated July 23, 2010, that the Children’s Aid Society did not have to produce its records for the preliminary hearing.
(2) Mr. C. submitted dockets:
for work completed by his lawyers related to his wife’s claim for statutory accident benefits, which clearly do not relate to the preliminary issue.
for administrative work completed by his lawyers, for example, letters to service providers enclosing payments, updating and organizing Primafact (which is an electronic database), organize file and filing.
that are duplicates, for example, Tania Harris docketed 13 hours on July 5, 2010 for attending the arbitration and then another 14 hours on the same day for attending the arbitration.
that relate to the settlement of the insured’s entire file when only time spent on the preliminary issue is compensable.
for time that is excessive and unnecessary, for example:
the time spent preparing for the hearing that is excessive;
the time spent drafting the costs submissions is excessive, particularly since the dockets and expenses were not reviewed to exclude time and expenses that were not relevant to the preliminary hearing, and since the insured submitted a second submission that was neither asked for nor warranted.
(3) Mr. C. claims HST at 13% on all fees regardless of when the time was docketed. Since HST did not become payable until July 1, 2010, Coachman submits only lawyer’s fees for time docketed from July 1, 2010 onwards is subject to HST. All time prior to July 1, 2010 is subject to GST at 5%.
(b) Expert Expenses
Section 5 of the Expense Guideline provides that:
5(1) The amount of the following witness fees paid by or on behalf of the insured person or the insurer may be awarded:
For the attendance of witnesses, in accordance with subsection (2).
For the attendance of an expert witness who gives opinion evidence at the arbitration or hearing or whose attendance is necessary, in accordance with subsection (3).
For a report prepared by an expert, provided to the other parties to the arbitration or hearing and necessary for the conduct of the arbitration or hearing, in accordance with subsection (4).
(2) The maximum amount that may be awarded for the attendance of a witness is the amount of the attendance allowance for the witness that may be allowed under Rule 58.05 of the rules of court as a disbursement.
(3) The maximum amount that may be awarded for the attendance of an expert witness is $200 per hour of attendance, up to a maximum of $1,600 per day.
(4) The amount of the expenses paid by or on behalf of the insured person or the insurer to an expert witness for preparation for a hearing at which the witness testifies may be awarded, to a maximum of $500.
(5) The amount of the expenses paid by or on behalf of the insured person or the insurer to an expert for the preparation of a report may be awarded, to a maximum of $1,500.
Coachman submits that Mr. C. claims a number of expert expenses in excess of the amounts allowable by the Expense Guideline.
Coachman submits that expenses claimed by Mr. C. for Mr. Stephane Sefter ($1,769.50)
Rosemary Whyte ($2,220.50), Mr. Wayne Fisher ($2,878.15) and Paula Hilborn ($1641.75) are not compensable as they did not give expert evidence at the preliminary hearing.
Coachman submits that these witnesses were called by Mr. C. as fact witnesses. This is supported by the transcript. For example, in the transcript of Rosemary Whyte’s evidence dated July 8, 2010, page 65, the insured’s lawyer acknowledges that Ms. Whyte is not giving expert evidence. In the transcript of Stephane Sefter dated September 27, 2010 at page 31, the insured’s lawyer acknowledges that Mr. Sefter is not giving expert evidence. In the transcript of Paula Hilborn dated July 12, 2010 at page 14, I accept Ms. Hilborn as a witness, not as an expert witness. In respect of Mr. Fisher, Mr. C. did not ask me to qualify him as a compensable expert witness.
Pursuant to Section 5(2) of the Expense Guideline the maximum amount that may be awarded for the attendance of a witness is the amount of the attendance allowance for the witness that may be allowed under Rule 58.05 of the rules of court as a disbursement.
Rule 58.05 of the Rules Of Civil Procedure provide for the payment of conduct money, namely $53.00 per day of necessary attendance (a set in the Tariff - Part II - Disbursements section 21).
Accordingly, Coachman submits that there is no basis for the payment of more than $53 for the attendance of these witnesses.
Coachman submits that the claim of $900 for the services of Dr. Becker is not compensable. The invoice for this amount refers to two telephone conversations with Mr. C.’s counsel in preparation for arbitration at a cost of $450 each. Coachman submits that Dr. Becker did not testify at the hearing. Accordingly, pursuant to the Expense Guideline the invoices are not compensable.
Coachman submits that the only witness who was qualified as an expert at the preliminary issue was Dr. Rosenblat. Coachman, however, submits that the amount claimed, $10,850 is not compensable pursuant to section 5 of the Expense Guideline.
Coachman submits that in accordance with the Expense Guideline, the maximum compensable for preparation for a hearing is $500. The maximum compensable for testifying at the hearing is $1,600 per day. Accordingly, Coachman submits the maximum amount compensable for Mr. Rosenblat’s two days of testimony is $3,700.
(c) Disbursements
Coachman submits that invoices or receipts were not provided for the following expenses claimed: delivery service/messengers ($251.34); facsimiles ($442); office supplies ($59.50); photocopies/scanning - photocopies by current lawyer ($1,499.75), photocopies by former lawyer ($3,579.55) and scanning by current lawyer ($1,184.75); postage ($8.44); MedRehab Group Inc. ($459.85) and Quick Law ($285.50).
Accordingly, Coachman submits that Mr. C. has denied its right to confirm the validity and reasonableness of the expense claims and therefore the expenses should not be compensable.
With respect to Mr. C.’s claim for photocopying charges in the amount of $638.70 from Printing House, Coachman submits that three of the four invoices relate to work done in March 2010. Coachman submits that global mediation in respect of both the insurance tort and statutory accident benefits files was March 10, 2010. It is therefore highly likely that the March 2010 invoices relate to the mediation and not the preliminary issue. Therefore the insurer submits that the only amount that should be compensable is the invoice for $32.50 plus HST.
For Mr. C.’s claim made for the claim for $150.43 for parking at FSCO, Coachman submits that no receipts were provided. As such, Mr. C. has denied Coachman the right to evaluate the reasonableness of the expense and to determine whether the expense relates to the preliminary issue. In addition, the Expenses Guideline does not permit the recovery of the insured’s lawyer’s parking at FSCO. Therefore, Coachman submits the expense should not be compensable. Coachman also submits that there are no details provided regarding rates charged and on what days for the expense of $210 for mileage to and from the arbitration hearing. Coachman submits that the Expense Guideline does not permit the recovery of the insured’s lawyer’s parking at FSCO and accordingly these expenses not compensable.
With respect to Mr. C.’s claims for the clinical notes and records of Dr. Mamelak ($100) and Dr. Wong ($100), Coachman submits that only one half of the expense is compensable and the other half should be paid by the tort insurer.
Expenses claimed by Mr. C.’s previous lawyer, Denny Pollock, in the amount of $17,162.52 for disbursements is disputed by Coachman.
Coachman submits that the clinical notes and records of the various health practitioners that Mr. C. has claimed should only be compensated on the basis of 50% with the other 50% to be paid by the tort insurer. Accordingly, Coachman submits that the amount compensable for the clinical notes and records is $569.49.
Coachman submits that the following reports are not compensable:
$3,375.25 for a report by Evergreen Rehabilitation Services: Coachman submits that this report is a vocational assessment prepared for the purposes of the tort action. It does not relate to the preliminary issue and is not related to the insured’s claims for statutory accident benefits.
$735.50 for a report of North West Rehabilitation: Coachman submits that the invoice at Tab 31 is dated May 6, 2008.6 Catastrophic impairment was not an issue in May 2008 and there is no indication that this report relates to the preliminary issue.
$987.00 report of North West Rehabilitation: the invoice at Tab 28 is dated December 4, 2008.7 Catastrophic impairment was not an issue in May 2008 and there’s no indication that this report relates to the preliminary issue.
$4,502.06 for a report of Rosemary Whyte: Coachman submits that Mr. C. did not provide any invoices or other supporting documentation with respect to this expense and accordingly it cannot validate the reasonableness of the expense or whether it has previously been paid.
Coachman further submits that its arguments above in regards to Mr. C.’s current lawyer’s expenses for postage, facsimiles and courier apply equally to his previous lawyer’s expenses. Accordingly Coachman submits that these expenses are not compensable.
Finally, Coachman submits that Mr. C. wrongly claims for HST at 13% on all disbursements regardless of when the disbursements were incurred. Coachman submits that Mr. C. claimed HST on invoices that clearly only show GST was charged, for example, the invoice at Tab 3 for process serving. Coachman submits that the insured cannot recover more than he actually paid for the service.
ANALYSIS AND FINDINGS
Mr. C. was successful in the preliminary issue hearing and accordingly, I find that he is entitled to his expenses. For the following reasons, I fix Mr. C.’s entitlement to expenses at $60,000 inclusive of GST and HST.
I give full weight to Coachman’s submissions and critique of Mr. C.’s claim for disbursement expenses. In his Reply submissions Mr. C. provided further invoices. Because the invoices were provided in Reply submissions, I cannot give much weight to these invoices as Coachman has been denied the opportunity to examine and respond to these additional invoices. I agree with Coachman’s submissions that Mr. C. has denied its right to confirm the validity and reasonableness of the expenses claims and therefore the expenses should not be compensable.
In respect of legal fees, I agree with Coachman’s submission that Mr. C. provided dockets that are vague, excessive and, often do not relate to the issues involved in the preliminary hearing, include duplicate billable hours and time for administrative tasks.
Two further examples of why I would reduce the amount of hours claimed for legal fees by Mr. C.’s counsel are as follows:
(1) Length of the Hearing
While this was a lengthy hearing, in my view, it was made longer by Mr. C.’s unnecessary cross-examination of Dr. Lawson and Dr. Wilkens. Both medical practitioners provided reports on catastrophic impairment on behalf of Coachman. Coachman did not call the doctors to testify. In my view, given the glaring deficiencies of their reports (noted in my decision) it would appear that Coachman made a pragmatic decision not to call them as witnesses.
The reports were so blatantly deficient that they could have been very easily dealt with in submissions. Nevertheless, Mr. C. called the doctors for cross-examination on their reports. In my view, their cross-examination added nothing to Mr. C.’s case except to unnecessarily lengthen the hearing. In one instance the cross-examination provided Dr. Wilkens with the opportunity to give a diagnosis which she failed to provide in her report. This was a spurious diagnosis, but nevertheless had to be considered in my reasons.
(2) Time Spent on Submissions
Mr. C. asked and received a month’s extension in filing his expense submissions. When the submissions were received, they consisted of a few pages noting that he was successful at the hearing. However, the submissions did not include any expense law on entitlement or to substantiate Mr. C.’s claim for expenses that he was clearly not entitled to by law. In response to a footnote which stated: “dockets available upon request” I asked to be provided with the dockets.
In response to my request, Mr. C. provided a Bill of Costs. However, although not requested, Mr. C. provided additional submissions. Again there was no reference whatsoever to any of the law on expenses. In these additional submissions, Mr. C. claimed that in responding to Coachman’s submissions his counsel “was compelled to perform an extensive review of the Jaggernauth and M.R. cases8 and make detailed responding submissions to set the record straight. This was a tedious and time consuming endeavour, but one that was necessary in the circumstances.”
I give very little weight to this latter submission.
At the conclusion of a hearing, the parties provide submissions to persuade the adjudicator of the value of their position. When providing reasons for a decision, the adjudicator is not bound by the submissions of the parties, but by the evidence and the law that has been presented in the case.
There are situations where a party’s submission is so complete and convincing that an adjudicator can adopt them as their reasons.9 There are, however, cases where counsel’s submissions provide very little assistance to the adjudicator in giving their reasons.
In the present case I found the submissions by Mr. C. on the Preliminary Issue of little assistance. I found the submissions to be very light and superficial. They consisted of a brief summary of the evidence of each witness.10 After the brief summary, the submissions concluded as follows:
… The evidence is clear that [Mr. C.] has significant disabling problems in every aspect of his life. Based on the opinion of Dr. Rosenblat … and the wealth of supporting corroborative evidence before this Tribunal from his family and treating health care providers …it is respectfully submitted that [Mr. C.] has suffered a catastrophic impairment as defined by paragraph 2(1.2)(g) of the Schedule in that he has a marked impairment in the area if work adaptation.
Coachman’s on the other hand provided 221 paragraphs of in-depth submissions, a detailed summary of the witnesses’ evidence substantiated by references to the transcript, as well as a detailed analysis of the case law. In addition, Coachman dealt with all four spheres of function required by the Guides to the Evaluation of Permanent Impairment.11
Despite the fact that Coachman had provided an in-depth analysis of each sphere of function,12 Mr. C. did neither in his submissions or reply submissions. This analysis of each sphere of function was left to the adjudicator, who is bound to apply the evidence presented in the case to the applicable law, even where the submissions are lacking this analysis.
For these reasons, I can give very little weight to the alleged time spent by Mr. C.’s counsel on preparing submissions both for the preliminary issue and for the expense hearing.
Accordingly, for all of these reasons, I fix Mr. C.’s entitlement to expenses in the amount of $60,000 inclusive of GST and HST.
July 24, 2012
Joyce Miller Arbitrator
Date
Financial Services Commission des
Commission services financiers
of Ontario de l’Ontario
Neutral Citation: 2012 ONFSCDRS 117
FSCO A09-000167
BETWEEN:
MR. C.
Applicant
and
COACHMAN INSURANCE COMPANY
Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- Mr. C. is entitled to expenses fixed at $60,000 inclusive of GST and HST.
July 24, 2012
Joyce Miller Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
- Ontario Regulation 664, R.R.O. 1990, as amended.
- (OIC A-007954, August 8, 1997)
- Later amended to $144,279.21.
- (FSCO A04-000446, June 21, 2006)
- The amount stated in the Insurer’s submission is $367.50.
- The amount stated in the Insurer’s submission is $987.00.
- Jaggernauth and Economical Mutual Insurance Company (FSCO A08-001413, December 23, 2010) and M.R. and Gore Mutual Insurance Company (FSCO A09-001224, December 23, 2010)
- In the case of Canada (Attorney General) v. Community Expansion Inc., (2005) 2004 CanLII 50266 (ON SC), 72 O.R. (3d) 546 at 552, Mr. Justice Reilly adopted, “virtually without reservation” as his reasons the submissions of the Plaintiff in that case.
- For example, Mr. C.’s evidence was summarized in seven short paragraphs
- 4th Edition, 1993
- While there were errors and inconsistencies in Coachman’s submissions, the analysis of these errors, as noted in the decision, relied more on the evidence in the case than by the submissions provided by Mr. C.