Subashini Yogesvaran v. State Farm Mutual Automobile Insurance Company, 2012 ONFSCDRS 140

Financial Services Commission des Commission services financiers of Ontario de l’Ontario

Neutral Citation: 2012 ONFSCDRS 140

FSCO A08-001142

BETWEEN:

SUBASHINI YOGESVARAN Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Insurer

DECISION ON EXPENSES

Before: Joyce Miller

Heard: Written submissions received by May 28, 2012

Appearances: David S. Wilson for Ms. Yogesvaran Robert S. Franklin for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Subashini Yogesvaran, was injured in a motor vehicle accident on May 13, 2007. In a decision dated March 1, 2012, I dealt with a motion brought by State Farm. I made the following orders, while reserving on the issue of expenses:

The motion is dismissed.
If needed, the parties can speak to me on the issue of expenses within 30 days of receipt of decision.

The issue in this further hearing is:

Is Ms. Yogesvaran entitled to her expenses incurred in respect of this arbitration hearing?

Result:

Ms. Yogesvaran is entitled to her expenses in the amount of $6,034.20 inclusive of HST.

SUBMISSIONS

Ms. Yogesvaran’s Submissions

Ms. Yogesvaran submits that she was successful in this motion and accordingly is entitled to her expenses for this motion hearing. In addition, Ms. Yogesvaran submits that she is entitled to her expenses “thrown away.” Specifically, Ms. Yogesvaran claims that she is entitled to those expenses which were required for immediate preparation for the arbitration hearing, which was adjourned as a result of the insurer’s late request for the motion.

Ms. Yogesvaran submits that the time claimed is in respect of her counsel’s time spent to review documents and preparation of her testimony for the hearing, all of which will have to be repeated again.

Ms. Yogesvaran submits that even if she is ultimately unsuccessful in her claim for expenses in the arbitration hearing, she still should be entitled to be reimbursed for the expenses now claimed as the duplication of time was caused solely by the conduct of the insurer.

State Farm’s Response Submissions

State Farm submits that it was reasonable for it to move for a stay of the arbitration on the basis that it should not be expected to proceed to arbitration without having had the opportunity to avail itself of its right to re-examine the applicant pursuant to the post-104 week entitlement test.

State Farm submits it moved for a stay of the arbitration on the basis of the provisions of the Statutory Accident Benefit Schedule¹, and the interpretation of the arbitral decisions of Kostynyk and Albanese.² As such, State Farm’s motion was not ill conceived, but rather grounded in the applicable legislation and arbitral law.

State Farm submits that it disputes the portion of the Insured’s Bill Of Costs entitled “Expenses Thrown Away” in respect of time spent to prepare for the arbitration.

State Farm submits that the necessity of this motion was occasioned by the insured’s refusal to attend an independent medical examinations post-104 weeks. Accordingly, State Farm submits the insured’s duplicated costs could have been avoided by her if she complied with State Farm’s request to attend an independent examination in April and May of 2011, eight months prior to the motion.

State Farm further submits that costs should be reserved until the final disposition of the proceeding.

Ms. Yogesvaran’s Reply Submissions

Ms. Yogesvaran submits that in respect of entitlement to her costs she notes that State Farm completely ignored, in its submissions, the finding of the Arbitrator that it was unreasonable for the insurer to have waited until the eve of the presumed arbitration hearing to bring the motion. Moreover, she submits that State Farm’s submissions ignored the arbitator’s finding that the insurer failed to provide any explanation of why it did not conduct itself in a timely manner, and that the lengthy delay in requesting the insurer’s examination was unreasonable, and if there was any procedural fairness, it was caused to the insured.

In respect to the issue of expenses “thrown away” Ms. Yogesvaran submits that in its submissions, State Farm ignores my finding that the conduct of the insurer strongly prejudiced the insured is of significance with respect to this aspect of the insured’s position.

Ms. Yogesvaran submits that not only did the conduct of the insurer significantly delay the insured’s ability to have her case heard in a timely and expeditious manner, but the prejudice extended to the insured being required to incur additional legal fees as previously described.

Ms. Yogesvaran submits that the insurer has not disputed the amount of time expended by her counsel; accordingly, one can reasonably infer that the insurer agrees that the time spent by her counsel was reasonable and appropriate under the circumstances.

Ms. Yogesvaran submits that her counsel expended a further .85 hours to prepare the reply and requests a further allowance in the amount of $144.07 inclusive of HST.

Ms. Yogesvaran submits that the insurer’s submission that costs be reserved until the final disposition of the proceeding is contrary to general arbitral practice and in particular, would arguably be an inappropriate result in the circumstances of this case, given the arbitral findings and the submissions of the insured.

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.

FINDINGS

With these criteria in mind, I make the following findings:

Each party’s degree of success in the outcome of the proceeding.

Ms. Yogesvaran was completely successful in the motion hearing.

Any written offers to settle made in accordance with subsection (3).

Neither party made any written offer to settle.

Whether novel issues are raised in the proceeding.

The issue was not novel

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.

Neither party prolonged or obstructed or hindered the progress of the motion hearing.

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

No aspect of the motion hearing was improper, vexatious and unnecessary.

The sixth criterion is not applicable to this arbitration.

Based on the above criteria, pursuant to subsection 282(11) of the Insurance Act, I find that Ms. Yogesvaran, who has been completely successful in this motion, is entitled to her expenses in this motion hearing.

ASSESSMENT OF EXPENSES

The amount of expenses which I may award is set out in section 3 of the Schedule to the Expense Regulation, which states:

3(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 what is the amount of expenses Ms. Yogesvaran is entitled to for the services by her counsel, I will adhere to the above principles of “reasonableness” and “global assessment.”

FINDING

Having been completely successful in the motion hearing, I find it is appropriate that Ms. Yogesvaran not have to wait until a final determination of the proceeding before she gets her expenses for the motion hearing.

State Farm did not dispute the amount of expenses claimed for the services of Ms. Yogesvaran’s counsel. State Farm, however, disputed Ms. Yogesvaran’s claim for expenses “thrown away.”

I give very little weight to State Farm’s argument that the delay in the arbitration was as a result of Ms. Yogesvaran’s refusal to attend an IME in April and May of 2011. As noted in my decision, State Farm could have requested their motion at the time of Ms. Yogesvaran’s refusal instead of waiting, almost a half year, until the commencement of the arbitration hearing.

It is clear, with the hearing delayed by almost a year, there will have to be duplication of preparation. Accordingly, I find that Ms. Yogesvaran is entitled to be reimbursed for the expenses “thrown away” as the need for duplication of preparation was caused solely by the conduct of the insurer.

Having reviewed the Bill of Costs, I find that the expense claim is reasonable.

Accordingly, I find that Ms. Yogesvaran is entitled to her legal fees in the amount of $5,212.50 plus HST of $677.63, as well as, the additional legal fee of $144.07 inclusive of HST.

Accordingly, I find that Ms. Yogesvaran is entitled to her expenses for the motion hearing in the amount of $6,034.20 inclusive of HST.

October 1, 2012

Joyce Miller Arbitrator

Date