Ahmad Jawid Ata Mohammad v. State Farm Mutual Automobile Insurance Company, 2014 ONFSCDRS 156

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2014 ONFSCDRS 156

FSCO A12-007779

BETWEEN:

AHMAD JAWID ATA MOHAMMAD

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before: Richard Feldman

Heard: By written submissions received by July 17, 2014

Representatives: Ahmadreza Bazyar (licensed paralegal) for the Applicant

Jonathan Schrieder (solicitor) for the Insurer

Background:

The Applicant made numerous claims against the Insurer arising from an accident that occurred on April 16, 2010. The disputed issues proceeded to arbitration and were heard by me on February 24 and 25, 2014. On May 9, 2014, I issued my written decision in this arbitration proceeding, dismissing all of the Applicant’s claims (for the reasons attached to my decision). In the order of May 9, 2014, I reserved my decision on the issue of the expenses of the arbitration proceeding.

Issues:

The issue in this hearing is:

Is the Applicant liable to pay the Insurer's expenses in respect of the arbitration proceeding under section 282(11) of the Insurance Act and, if so, in what amount?

Result:

The Applicant is liable to pay to the Insurer its expenses in respect of the arbitration proceeding, fixed in the amount of $5,300.00 (inclusive of fees, disbursements and any applicable taxes).

EVIDENCE AND ANALYSIS:

Introduction

The Insurer is seeking expenses in the total amount of $16,587.10, made up as follows: approximately $13,000 in fees (representing about 120 hours of legal services), approximately $1,400 in disbursements, plus HST on both amounts. Counsel for the Insurer provided no written submissions as to why the Insurer ought to be awarded its expenses in this proceeding. Presumably, the Insurer is relying upon its complete success. The Applicant does not dispute that the Insurer was completely successful but suggests that the Insurer ought to be deprived of its expenses because the Insurer made no valid offer to settle the issues in dispute.

Entitlement to Expenses

While, under the Expense Regulation, qualifying offers (i.e., those made in accordance with Rule 76 of the Dispute Resolution Practice Code) are to be taken into consideration when determining disputes over expenses, I do not accept the contention that the failure of a party to make such an offer precludes that party from being able to claim reimbursement of its reasonable legal expenses of the proceeding.

The Insurer was completely successful in this proceeding. All of the Applicant’s claims were dismissed. Based on this, I find that the Insurer is entitled to its expenses of the arbitration proceeding.

Quantum

Fees

The hearing lasted less than two days. The only witness called on the Applicant’s side was the Applicant himself. The only witness called by the Insurer was the Applicant’s former family physician, Dr. Satei. His testimony lasted about 20 minutes. On the second day of the hearing (February 25, 2014), the testimony was concluded by 11:30 a.m. The hearing recessed until 1:00 p.m. and then I heard closing arguments by both sides. The hearing was concluded by 2:00 p.m. that day.

This was a relatively simple case, with only two witnesses and limited documentary evidence. The Insurer is seeking expenses related to a total of about 120 hours of legal services (about 54 hours by Mr. Schrieder, about 35 hours by Ms. Galea, about 3 hours by Ms. Stephenson and about 28 hours by Mr. Arduini, a law clerk). The Applicant's representative has criticized this as being unreasonable and excessive in the circumstances of this case. I agree.

With respect to preparatory work prior to the hearing, given the nature of the issues in dispute, I find that a ratio of about 1:1 (the ratio of preparation time to hearing time) is appropriate. The Applicant’s representative has suggested that since the hearing only took about 12 hours, “no more than 24 hours at the legal aid tariff is justified in the circumstances.” This, however, ignores work that may have been done prior to the hearing date having been set. I find that a reasonable number of total hours for all legal services in this case (including, but not limited to, reviewing the Application for Arbitration, preparing a Response, preparing for and attending the pre-hearing discussion, exchanging documentation and preparing for and participating in the hearing) would be about 36 hours. About half of this would relate to work done by Mr. Schrieder. At the appropriate Legal Aid rates,¹ this would be equivalent to legal fees of about $4,300 (approx. $3,800 plus HST).

Disbursements

A party to an arbitration proceeding at FSCO is only permitted to seek compensation for expenses of a type and in an amount permitted under the Expense Regulation.

The Insurer is seeking reimbursement for the following disbursements:

Description

Amount ($)

Conduct money

288.40

Process Serving²

687.35

Courier Fees (Turtle Express Inc.)

41.25

Photocopies (Print Three)

256.76

HST

165.59

Travel Expenses of Jonathan Schrieder

53.75

Total

1,493.10

Invoices were only provided for the first two items on this list. No written submissions were provided by Insurer’s counsel with respect to why these disbursements ought to be permitted.

The disbursements claimed are all types of disbursements that can be permitted under the Expense Regulation and, given the nature and amount of these claims, I am generally prepared to accept these expenses, even in the absence of detailed written submissions or extensive documentation. In the absence of particulars or any justification from the Insurer, however, I will not permit any of the following:

conduct money for persons who were not actually called as witnesses at the hearing
the “expedite fee” charged by the process server
solicitor’s travel expenses.

Thus, of the disbursements claimed on behalf of the Insurer, based on the written submissions of the parties and the supporting documents filed, I find that a total of about $1,050.00 would be reasonably permitted under the Expense Regulation.

Total Expenses

Having considered the relative complexity of this matter, the time spent, the applicable Legal Aid rates, the written submissions of the parties, the supporting documentation filed and the maximum amounts permitted under the Expense Regulation, I find it appropriate to fix the Insurer's expenses at $5,300.00, inclusive of all fees, disbursements and any applicable taxes.

CONCLUSION:

For the reasons set out above, the Applicant shall be ordered to pay to the Insurer its expenses in respect of this arbitration proceeding, fixed in the amount of $5,300.00 (inclusive of fees, disbursements and any applicable taxes).

September 29, 2014

Richard Feldman Arbitrator

Date