Marco P and Michael P v. TD General Insurance Company, 2014 ONFSCDRS 169

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2014 ONFSCDRS 169

FSCO A13-001116

and A13-001136

BETWEEN:

MARCO P and MICHAEL P

Applicants

and

TD GENERAL INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before: Arbitrator Jeffrey Rogers

Heard: By written submissions completed on September 5, 2014 and a telephone conference call on September 19, 2014

Appearances: Mr. Ian Little, solicitor for Marco P and Michael P Mr. Benjamin Sim-Tzung Lee, solicitor for TD General Insurance Company

Issues:

Michael and Marco P’s mother was injured a motor vehicle accident on August 31, 2004. They claimed that TD General was liable to pay them a non-earner benefit because of their resulting psychological or mental injuries. In a decision dated May 16, 2014, I dismissed their claims.

The issue in this further hearing is:

Is TD General entitled to its expenses incurred in respect of this arbitration hearing, and if so, in what amount?

Result:

Marco P shall pay TD its expenses of the arbitration in the amount of $2,029.92.
Michael P shall pay TD its expenses of the arbitration in the amount of $2,029.92.

EVIDENCE AND ANALYSIS:

Entitlement to Expenses

Section 12 of the Expense Regulation¹ requires an Arbitrator to consider only the seven criteria listed there, for the purposes of awarding all or part of the expenses incurred in respect of an arbitration. Of the listed criteria, I find the following to be relevant in this case:

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

I find that TD General is entitled to its expenses of the arbitration, based on its complete success. In my decision, I noted conduct by TD General that tended to prolong the hearing. Although relevant, I find that TD’s conduct does not merit disentitlement to its expenses. This conduct prolonged the hearing by a small fraction and it was not so improper that a punitive response is required. I will address this issue further when I consider the quantum of expenses.

I reject TD General’s submission that its success means that the proceeding was improper, vexatious or unnecessary. Although ultimately unsuccessful, the claims were not so devoid of merit that it can be inferred that they were improper, vexatious or unnecessary.

I reject the applicants’ submission that their claims were novel. Section 2(1)(g) of the Schedule clearly establishes their right to claim accident benefits.

I reject TD General’s submission that its offer to settle is relevant. The offer related only to a final settlement of all claims for accident benefits. It is therefore impossible to relate its value to the outcome of these proceedings.

Quantum of Expenses

The applicants filed separate applications for arbitration but the claims were resolved in a single hearing. The hearing took about 3.5 days. TD delivered a Bill of Costs claiming much more, but it later limited its claim to a total of $5,000, inclusive taxes and disbursements. The claim for disbursements is $1,804.88. The claim for legal fees is therefore $3,195.12.

TD currently claims far less than it could have recovered, given the length of the hearing, the nature of the dispute and the extent of pre-hearing proceedings. As I noted above, TD engaged in conduct that tended to prolong the hearing. Normally, such conduct would warrant a fractional reduction of TD’s expenses. However, I find that no further reduction is warranted because of TD’s significant voluntary reduction. Each of the applicants is therefore ordered to pay TD half of its claimed legal fees, being $1,597.56.

The claimed disbursements include $940.16 for reporting services. That expense is not recoverable under the Expense Regulation. I therefore disallow it. I reject the applicants’ suggestion to engage in a further line-by-line analysis of the claim for disbursements. I award TD the balance claimed in the amount of $864.72. Each applicant shall pay half of this amount. Therefore each applicant is ordered to pay TD $432.36 for disbursements, plus $1,597.56 for legal fees. The total is $2,029.92.

October 16, 2014

Jeffrey Rogers

Arbitrator

Date