Financial Services Commission des Commission services financiers of Ontario de l’Ontario
Neutral Citation: 2014 ONFSCDRS 32
FSCO A10-000889
BETWEEN:
NERANJANEE SINGH
Applicant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Insurer
DECISION ON EXPENSES
Before: Jessica Kowalski
Heard: Written submissions received by January 31, 2013
Appearances: Jeffrey Raphael and Robert A. Besunder for Mrs. Singh
D’Arcy McGoey for State Farm Mutual Automobile Insurance Company
Issues:
The claim arose following an accident that took place on June 4, 2007. In my decision dated September 13, 2012, I found that Mrs. Singh was entitled to weekly income replacement benefits for approximately 13 months, plus interest, and to a special award fixed at $7,500.00. Each party has requested its expenses.
Issues:
Is Mrs. Singh entitled to an award of expenses?
Is State Farm entitled to an award of expenses?
Result:
- State Farm shall pay to Mrs. Singh expenses in the amount of $15,000.00.
Issues in Arbitration
At issue in the arbitration was Mrs. Singh’s entitlement to income replacement benefits from May 3, 2008 to the date of the hearing and ongoing, together with housekeeping, attendant care and medical and rehabilitation benefits.
During the pre-hearing in October 2010, the parties identified the following issues in dispute:
income replacement benefits in the amount of $367.38 per week for 104 weeks following the accident and ongoing;
Attendant care benefits in the amount of $729.11 per month from June 4, 2007 to June 4, 2009;
the balance of housekeeping and home maintenance benefits to the two-year mark;
seven treatment plans for treatment including massage, chiropractic, acupuncture, physiotherapy and botox injections between 2007 and 2009;
a special award
interest and expenses
The parties resolved Mrs. Singh’s claims for attendant care, housekeeping and past medical and rehabilitation benefits on the morning of the hearing, which reduced the issues for arbitration to income replacement benefits from May 3, 2008 (the denial date) to the date of the hearing and ongoing; a special award; and interest and expenses.
Factors to be considered in awarding expenses
Pursuant to subsection 12(2) of Ontario Regulation 664 (the Expense Regulation), an arbitrator shall consider only the following criteria for the purposes of awarding all or part of the expenses incurred in respect of an arbitration proceeding:
(a) each party’s degree of success in the outcome of the proceeding;
(b) any written offers to settle made in accordance with subsection (3);
(c) whether novel issues are raised in the proceeding;
(d) the conduct of a party or party’s representative that tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders;
(e) whether any aspect of the proceeding was improper, vexatious or unnecessary; and,
(f) the applicant’s failure to attend examinations; and,
(g) whether the insured person refused or failed to submit to an examination or provide material as required under section 44 of the Schedule.
I find that both parties engaged in conduct that contributed to moderate delay: Mrs. Singh in calling her employer after her cross-examination was complete for the primary purpose of testifying about an attempt to work that followed the cross-examination. I found that the return to work was not honest or remotely sustained and was designed solely to bolster her position in the arbitration. In State Farm’s case, there was some delay in producing the relevant adjusters. Because there was some delay on both sides, I find this criterion moot.
As a result, I find that the only relevant criteria in this case are each party’s degree of success and an offer to settle that State Farm made prior to the hearing.
The results of the hearing
In my decision dated September 13, 2012, I ordered State Farm to pay income replacement benefits from May 3, 2008 (the denial date) to June 3, 2009 (the two year mark) at the rate of $367.38, plus interest, plus a special award in the amount of $7,500.00.
After calculating interest on outstanding benefits, State Farm paid $60,454.29 to Mrs. Singh in satisfaction of the order.
Together with the partial settlement made on the morning of the hearing, the total paid to Mrs. Singh was $70,490.13.
Although Mrs. Singh was successful in achieving a positive result, the claim for income replacement benefits was for benefits to the two-year mark and beyond. The income benefits awarded were for 13 months – from State Farm’s termination date on May 3, 2008, to June 3, 2009.
Analysis
I find that each party had some degree of success in the arbitration. I agree with Aviva that the bulk of Mrs. Singh’s IRB claim fell beyond the two year mark. The May 12, 2011 offer to settle did not resolve the IRB claim, which made up a substantial portion of Mrs. Singh’s claim and therefore required a hearing. But for the hearing, Mrs. Singh might not have been paid any further monies for attendant care and housekeeping benefits to the two-year mark, or outstanding medical and rehabilitation expenses. Nor is it likely that she would receive any further payments for income replacement benefits.
I also found that State Farm did unreasonably delay the IRBs to which Mrs. Singh was ultimately entitled. It had no reasonable answer for not reconsidering her benefits after May 2, 2008 and relied on defective or incomplete reports to terminate those benefits, hence the special award.
I therefore find that, notwithstanding only partial success, she did have some success and is entitled to a portion of her expenses.
The general approach with respect to fees is to take a pragmatic, broad-strokes approach, with a view to fixing an amount that is reasonable.1 This includes taking into account the length of the proceeding and the complexity of the issues, and frequently involves applying a ratio of pre-hearing preparation time to hearing time in the range of 1:1 to 4:1.2
Fees
Mrs. Singh claims fees in the amount of $40,086.75 ($35,475.00 plus HST of $4,611.75).
I find the claim for expenses excessive relative to the issues in dispute. The hearing itself took 5 days, and was not so complex as to require two counsel. Because the issues were not novel or complex, I find a ratio of about 2:1 (of preparatory to hearing time) is appropriate. Given that the average hearing day lasted 8 hours, I find that a reasonable number of total hours for this case would be about 90. Taking a pragmatic, broad strokes approach, I have reduced the maximum hours I would allow for fees to $8,000.00 which I find more appropriately reflects Mrs. Singh’s partial success and the nature of the arbitration.
Disbursements
Mrs. Singh claims disbursements of $15,815.22. These include disbursements she has identified as having been paid prior to a tort settlement, without further explanation.
With respect to experts, the maximum amounts that may be claimed under the Expense Regulation are: $1,500.00 for preparation of a report; $200.00 per hour for attendance at a hearing (up to $1,600.00 per day); and $500.00 for preparation for a hearing at which the expert actually testifies.
Because the disbursements were not better clarified, I have taken a global approach and fix an amount for disbursements that I feel is appropriate in the circumstances. I have reduced the amounts for expert reports and attendances to the maximum allowable under the Expense Regulation, and have allowed disbursements for the relevant productions. I have also factored in the mixed success and the apparent fact that some expenses were related to the tort action. I therefore find that an appropriate amount for disbursements in this case is therefore $7,000.00, inclusive of applicable HST.
For these reasons, State Farm shall pay to Mrs. Singh her expenses fixed in the amount of $15,000.00, inclusive of all applicable fees, disbursements and any applicable taxes).
February 21, 2014
Jessica Kowalski
Arbitrator
Date
Financial Services Commission des
Commission services financiers
of Ontario de l’Ontario
Neutral Citation: 2014 ONFSCDRS 32
FSCO A10-000889
BETWEEN:
NERANJANEE SINGH
Applicant
and
STATE FARM MUTUAL AUTOMOBILE
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:
- State Farm shall pay to Mrs. Singh expenses in the amount of $15,000.00.
February 21, 2014
Jessica Kowalski
Arbitrator
Date