Neutral Citation: 2015 ONFSCDRS 109 FSCO A11-003130

Between:

Catherine Yeboah, Applicant

and

Economical Mutual Insurance Company, Insurer

Decision on Expenses

Before: Arbitrator John Wilson Heard: by written submissions Appearances: No-one appeared for Ms. Yeboah Nicholaus de Koning for Economical Mutual Insurance Company

Issues:

The Applicant, Catherine Yeboah, claimed to have been injured in a motor vehicle accident on November 14, 2009. In a decision dated January 13, 2014, I dealt with her claims for statutory accident benefits under the Schedule.¹ I made the following orders, while reserving on the issue of expenses:

Ms. Yeboah’s claim is dismissed.
Ms. Yeboah shall pay Economical’s reasonable expenses in this matter which I will fix following receipt of Economical’s costs outline.
Economical shall provide its costs outline within 30 days.

The issue in this further expense hearing is:

What amount is Ms. Yeboah required to pay to Economical as its expenses incurred in respect of this arbitration hearing?

Result:

Ms. Yeboah shall pay to Economical $4,865.43, including H.S.T. as its fixed expenses in this matter, forthwith.

Evidence and Analysis:

Economical has put forward a claim for expenses and disbursements totalling $4,865.43 and has requested an order that Ms. Yeboah be required to reimburse it for these expenses.

Rule 75 of the Dispute Resolution Practice Code (the "Code"), relating to the expenses of parties, reads as follows:

75.1 An adjudicator may award expenses to a party if the adjudicator is satisfied that the award is justified having regard to the criteria set out in Rule 75.2. The items and amounts which may be awarded are found in Rule 78 and the Schedule to the Expense Regulation found in Section F of the Code.

75.2 The adjudicator will consider only the criteria referred to in the Expense Regulation found in Section F of the Code. These criteria are:

(a) each party's degree of success in the outcome of the proceeding; (b) any written offers to settle made in accordance with Rule 76; (c) whether novel issues are raised in the proceeding; (d) 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; (e) whether any aspect of the proceeding was improper, vexatious or unnecessary. (f) whether the insured person refused or failed to submit to an examination as required under section 42 of Ontario Regulation 403/96 (Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996) made under the Act or refused or failed to provide any material required to be provided by subsection 42 (10) of that regulation; and (g) whether the insured person refused or failed to submit to an examination as required under section 44 of Ontario Regulation 34/10 (Statutory Accident Benefits Schedule — Effective September 1, 2010), made under the Act, or refused or failed to provide any material required to be provided under subsection 44 (9) of that regulation.

While there are some differences between the courts and FSCO in the treatment of expenses or costs, one important criterion in both systems is the success or failure of any party to an arbitration.

As noted, I dismissed Ms. Yeboah's claims in this arbitration in a decision dated January 13, 2014, in which I dealt with the issue of expenses, with the exception of determining the amount payable. I ordered Ms. Yeboah to pay Economical’s reasonable expenses, noting that “I am left with the impression that her claim had no substance, and was concocted with the sole purpose of obtaining undeserved accident benefits from Economical.” Certainly Economical was successful in this arbitration.

I also found that, given Ms. Yeboah’s failure to attend the May 15, 2013 hearing, pursuant to section 7(1) of the Statutory Powers Procedure Act² she was disentitled from further notice in the proceeding, including this step in which the amount of expenses was to be determined.

As noted above, Economical claims an award of $4,865.43 as its expenses in this matter. This amount is made up of $2,287.86 in fees, and $2,280.15 in disbursements. (All figures include H.S.T.)

An award of expenses at arbitration is rarely the occasion for a detailed line by line review of a Bill of Costs. There are, however, some general principles that may be applied in determining the appropriateness of an amount claimed.

Of primary importance is the policy that expenses are based on the amounts set out in the appropriate legal aid tariff, rather than the full indemnity costs actually incurred by a party.

The Code allows for one important variation on this policy at Rule 78.1 which provides that “where an adjudicator is satisfied that a higher amount for legal fees to an insured person is justified, an hourly rate of up to $150 may be awarded."

It is important to note that this exception only applies for legal fees to an insured person, and does not authorize a higher amount for counsel for an insurer, such as Mr. De Koning of Miller Thompson LLP ("Miller Thompson"). Accordingly, Mr de Koning, in spite of his years of experience, billed at an hourly rate of $111.37.

Regarding disbursements one of the most important documents in this matter was an accident report commissioned by Economical from Kodsi Engineering. This report, which was presented at the pre-hearing concluded that the purported collision damage to Ms. Yeboah’s vehicle was inconsistent with “any contact whatsoever between the two vehicles.”

The effect of this document, which was presented at the original pre-hearing, was important. Firstly, counsel for Ms. Yeboah requested to be removed from the record. Secondly, Ms. Yeboah effectively abandoned her arbitration by not participating further, although she never formally withdrew her claim.

Needless to say, Economical claims the cost of this report as a disbursement. Although Miller Thomson’s dockets show that the report cost $3,602.69, in accordance with the Code's Expense Regulation, only $1,500.00 was ultimately claimed by Economical. Most other disbursements such as couriers and copying appear quite standard to an expense claim at arbitration. I find these expenses payable.

I note however that Economical has claimed for mileage and parking on behalf of Mr. de Koning, who travelled to Toronto from Waterloo, Ontario for each stage of this proceeding.

The address shown for Ms. Yeboah in her application for arbitration, and presumably her policy of insurance is in Toronto. The pre-hearings and hearings were always scheduled to be in Toronto.

While it is not usual to compensate Insurers for travel time for counsel when they choose to hire counsel at some distance from the place of the hearing, I accept that Ms. Yeboah should have anticipated this potential cost since she chose to insure herself with a company located in Kitchener, Ontario, rather than one located in Toronto. I note as well that at no time did Ms. Yeboah or her counsel object on the record to Economical's choice of out-of-town counsel. Consequently I will allow the expense claimed for mileage and parking as reasonable under the circumstances of this case.

Overall I accept that in proving its Bill of Costs, Economical appears to have kept to both the spirit and the letter of the Code. None of the expenses seem out of line. In fact they are appropriate to a process that has been said to encourage “the most just, quickest and least expensive resolution of the dispute.”

Consequently I accept that Ms. Yeboah should pay to Economical $4,865.43, including H.S.T. as its fixed expenses in this matter and I so order.

May 21, 2015

Arbitrator

Date

Arbitration Order

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

Ms. Yeboah shall pay to Economical $4,865.43, including H.S.T. as its fixed expenses in this matter, forthwith.