Financial Services Commission of Ontario
Neutral Citation: 2012 ONFSCDRS 146
FSCO A11-000560
BETWEEN:
ASHOK KUMAR EMMANUVEL Applicant
and
ECONOMICAL MUTUAL INSURANCE COMPANY Insurer
FSCO A11-002525
AND BETWEEN:
NIROGINI ASHOKKUMAR Applicant
and
ECONOMICAL MUTUAL INSURANCE COMPANY Insurer
FSCO A11-002526
AND BETWEEN:
CHALET VICTOR EMMANUEL Applicant
and
ECONOMICAL MUTUAL INSURANCE COMPANY Insurer
DECISION ON EXPENSES
Before: Richard Feldman Heard: Written submissions received by August 23, 2012
Appearances: Muthu Annamalai for the Applicants Nicholaus de Koning for the Insurer
Issues:
The Applicants claim to have been involved in an accident on September 20, 2009. The Insurer denied their entitlement to accident benefits on the basis of the Insurer’s investigations and sought a hearing to determine whether or not the Applicants had, in fact, been involved in an “accident”.
That preliminary issue hearing was conducted by me on March 27 and 28, 2012. The parties attended for about 7 hours on each day (for a total of about 14 hours). On June 8, 2012, I issued a decision in each of these applications. I found in favour of the Insurer since the Applicants had failed to prove on a balance of probabilities that they were involved in an “accident” on September 20, 2009.
On July 6, 2012, counsel for the Insurer requested a hearing on the issue of the legal expenses related to these matters. The expense hearing proceeded by way of written submissions.
The issue in this hearing is:
- Is any party liable to pay another party’s expenses in respect of the arbitration proceeding under section 282(11) of the Insurance Act and, if so, in what amount?
Result:
- The Applicants are jointly and severally liable to pay to the Insurer its expenses in respect of the arbitration proceeding, fixed in the amount of $7,500.00 (inclusive of fees, disbursements and any applicable taxes).
EVIDENCE AND ANALYSIS:
Summary of the Position of the Parties
The Insurer takes the position that, of the relevant criteria set out in the Expense Regulation (the only criteria I am permitted to consider), the only one that is relevant to these proceedings is the degree of success of the parties. The Insurer was completely successful as the Applicants were unable to prove that they were involved in an “accident” on the date in question. Consequently, the Insurer is seeking legal fees (at the applicable Legal Aid rates) of about $7,700.00 and disbursements of about $3,800.00 (for a total of about $11,500.00).
The Applicants make no reference to the relevant criteria under the Expense Regulation but submit (without any supporting evidence) that they are each facing difficult financial circumstances. Consequently, the Applicants are seeking an order that the Insurer pay them $2,000.00 each (plus HST) for legal fees as well as about $3,400.00 for disbursements (for a total of about $10,000.00).
Entitlement to Expenses
I agree with the Insurer that, of the criteria I am required to consider, the only relevant criterion in this instance is the complete success of the Insurer. I therefore find that the Insurer is entitled to its reasonable expenses. I do not find that the alleged financial position of the Applicants is a relevant consideration in this case. Even if I had concluded otherwise, there is no evidence before me to support the assertions contained in the written submissions of the Applicants’ representative.
Quantum
Precise calculation of fees and disbursements is difficult in this case because the bills from Insurer’s counsel show services related to these three arbitration proceedings but also services related to defending property damage claims advanced in court by one of the Applicants. While Mr. de Koning has been helpful in pointing this out and appears to have done his best to parse out those parts of the accounts that do not relate to the accident benefit claims before me, there remains the possibility that some of the fees or disbursements being claimed relate to a different legal proceeding. Bearing this in mind, I have not attempted to precisely calculate the expenses as I find it more appropriate in this case to adopt a more holistic approach and to fix the amount of expenses awarded as a global sum.
For the reasons that follow, and having considered the relative complexity of this matter, the time spent, the applicable Legal Aid rates permitted under the Expense Regulation, the written submissions of the parties and the supporting documentation filed, I find it appropriate to fix the Insurer’s expenses at $7,500.00, inclusive of all fees, disbursements and any applicable taxes.
Fees
The hearing lasted about 14 hours. This involved claims by three individuals, all related to the same incident. It was neither the simplest nor the most complex proceeding. It turned largely upon technical evidence from engineers and my assessment of the credibility of the Applicants. The Insurer is seeking expenses based upon a total of about 78 hours of legal services (about 58 hours by Mr. de Koning and about 20 hours by a clerk or law student). I find that, for the purposes of determining the expenses that the Applicants must pay to the Insurer, a more reasonable number of hours in this case would be about 50. The bulk of this would relate to work done by Mr. de Koning but approximately one-quarter of this time would be attributable to law clerks and/or articling students.
Disbursements
The Insurer is seeking reimbursement for the report of its engineers (up to the maximum amount permitted by the Expense Regulation − $1,500.00) as well as for the cost of having Mr. Kodsi (the engineer who testified on behalf of the Insurer) prepare for ($500.00) and attend at the hearing to testify ($600.00). The total sought in relation to this expert evidence is $2,600.00. I find this to be reasonable.
The Insurer is also seeking a further $1,200.00 (approximately) related to miscellaneous disbursements such as photocopying and courier expenses. There is no supporting documentation with respect to these disbursements. Some of the disbursements may relate to another proceeding or may have resulted (at least in part) from the Insurer’s choice to retain counsel in Waterloo. Under these circumstances, I find that a much more modest number for these disbursements ($300.00 - $500.00) would be more appropriate.
Total
For all of the preceding reasons, I fix the Insurer’s expenses at $7,500.00, inclusive of all fees, disbursements and any applicable taxes.
Joint and Several Liability
These three applications were heard together but were not formally joined. I invited submissions from the parties as to whether any cost order that might be made against the Applicants ought to be joint and several.
The Applicants’ representative did not specifically address this issue in his written submissions. I agree with and adopt the written submissions from Insurer’s counsel on this issue.
Given the nature of these claims and the manner in which these cases proceeded together, the Applicants ought to be held jointly and severally liable for any expenses related thereto. There is no reasonable way to apportion the expenses between the Applicants and no good reason to do so.
CONCLUSION:
For the reasons set out above, the Applicants shall pay to the Insurer its expenses in respect of these arbitration proceedings, fixed in the amount of $7,500.00 (inclusive of fees, disbursements and any applicable taxes).
October 25, 2012
Richard Feldman Arbitrator
ARBITRATION ORDER
Financial Services Commission of Ontario
Neutral Citation: 2012 ONFSCDRS 146
FSCO A11-000560
BETWEEN:
ASHOK KUMAR EMMANUVEL Applicant
and
ECONOMICAL MUTUAL INSURANCE COMPANY Insurer
FSCO A11-002525
AND BETWEEN:
NIROGINI ASHOKKUMAR Applicant
and
ECONOMICAL MUTUAL INSURANCE COMPANY Insurer
FSCO A11-002526
AND BETWEEN:
CHALET VICTOR EMMANUEL Applicant
and
ECONOMICAL MUTUAL INSURANCE COMPANY Insurer
It is ordered that:
- Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, the Applicants shall pay to the Insurer its expenses in respect of these arbitration proceedings, fixed in the amount of $7,500.00 (inclusive of fees, disbursements and any applicable taxes).
October 25, 2012
Richard Feldman Arbitrator