Financial Services
Commission of Ontario
Commission des services financiers
de l’Ontario
Neutral Citation: 2015 ONFSCDRS 117
Appeal P15-00009
OFFICE OF THE DIRECTOR OF ARBITRATIONS
ROYAL & SUNALLIANCE INSURANCE COMPANY OF CANADA
Appellant
and
NICLAS OLSEN
Respondent
BEFORE:
Delegate Lawrence Blackman
REPRESENTATIVES:
Mr. Thomas R. Hughes for the Appellant, Royal & SunAlliance Insurance Company of Canada
Mr. Andrew Bergel for the Respondent, Mr. Niclas Olsen
HEARING DATE:
By written submissions due May 29, 2015
APPEAL ORDER
Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- The Appellant, Royal & SunAlliance Insurance Company of Canada, shall forthwith pay the Respondent, Niclas Olsen, his legal expenses of this present appeal, fixed in the amount of $4,317.64, including HST.
June 2, 2015
Lawrence Blackman
Director’s Delegate
Date
REASONS FOR DECISION
I. BACKGROUND
Exercising my discretion under Rules 50.2 and 51.2(c) of the Dispute Resolution Practice Code (Fourth Edition – Updated January 2014), my April 2, 2015 order rejected this appeal from Arbitrator’s Robinson’s December 30, 2014 decision on a preliminary issue. This was without prejudice to the Appellant renewing its appeal upon a final arbitration decision being issued on the entitlement and quantum issues in dispute.
The Respondent’s April 30, 2015 letter enclosing his Bill of Costs of $4,317.64 submitted he was entitled to his legal expenses of this appeal for the following reasons:
The appeal had dubious merit, being essentially an expression of dissatisfaction with the Arbitrator’s finding of facts.
The Respondent was entirely successful in resisting the Appellant’s leave to appeal.
The appeal delayed resolution of the substantive issues in dispute.
Regarding the quantum of his requested expenses, the Respondent submits:
Responding to the Appellant’s leave application required considerable resources and effort including drafting extensive submissions and providing oral submissions.
Counsel was called in 2002. He was previously awarded $150 an hour in Honaramand and Security National Insurance Co./Monnex Insurance Mgmt. Inc., (FSCO A10-001801, November 28, 2011).
The Appellant, however, argues that the Respondent is not entitled to his legal expenses or that legal expenses should be payable in the cause because:
The Respondent was successful only in delaying the appeal. That should not entitle him to his legal expenses.
The Respondent is responsible for the delay is this proceeding, both in his past actions and in having set an arbitration hearing to start July 11, 2016.
There was strength to this appeal.
The Respondent’s fees are not reasonable. Bains and RBC General Insurance Company, (FSCO P09-00005, September 8, 2010) noted average appeal expense awards of $4,733.58 to insureds and $2,812.91 to insurers (the difference due to the higher maximum hourly rate allowed insureds’ representatives). The Respondent’s fees are in line with an entire appeal, not a leave motion. The Appellant’s own legal expenses of this appeal are $2,023.56.
The Respondent replies, in part, that the Appellant is responsible for the delay in this matter while he himself has scheduled an arbitration motion for October 2015 for interim benefits. The Respondent submits that it is now more than four years since the date of loss and that he “has received meager benefits from the insurer” in a case that is potentially catastrophic.
II. ENTITLEMENT TO APPEAL LEGAL EXPENSES
Subsection 282(11) of the Insurance Act, R.S.O. 1990, c.I.8, provides:
The arbitrator may award, according to criteria prescribed by the regulations, to the insured person or the insurer, all or part of such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations, to the maximum set out in the regulations.
By virtue of subsection 283(7) of the Insurance Act, subsection 282(11) applies, with necessary modifications, to appeals. I note that I am determining only the legal expenses of this present appeal, not any entitlement to legal expenses of arbitration. I leave the question of any delay at that level to arbitration.
Subsection 12(2) of R.R.O. 1990, Reg. 664 (the “Expense Regulation”), provides the criteria in awarding legal expenses. I find most relevant to this appeal each party’s degree of success in the outcome of this present appeal. In this regard I note Allstate Insurance Company of Canada and Torok, (FSCO P01-00021, May 29, 2001), referenced in my prior April 2, 2015 decision, that “the over-arching principle guiding the exercise of the discretion [whether to exercise discretion to hear an appeal from a preliminary or interim order] ‘should be broadly interpreted to produce the quickest, most just and least expensive resolution of the dispute.’”
I had also noted the February 2014 Final Report of the Ontario Automobile Dispute System Review’s emphasis on timeliness. At oral submission I raised the possibility of the arbitration and this appeal (and any subsequent application for judicial review) moving in tandem. The Appellant objected to a determination of the substantive arbitration issues prior to its having exhausted all of its appeal options regarding the determination of its preliminary issue as to whether the incident on April 15, 2011 was an accident within the meaning of the Schedule.
The Appellant had the onus of establishing that leave should be given to it to appeal the Arbitrator’s preliminary order that did not decide all of the issues in dispute. I was not persuaded that hearing this appeal at this time would provide the quickest, most just and least expensive way of disposing of the issues between the parties.
Given the Respondent’s success in this present appeal, I exercise my discretion to award the Respondent his reasonable legal expenses. I am not persuaded to leave the determination of the legal expenses of this present appeal, where time and resources have been unnecessarily expended, to some unknown distant date after the Appellant has, as it has said, exhausted every available right of appeal.
III. QUANTUM OF APPEAL LEGAL EXPENSES
The Respondent provided extensive written submissions opposing leave being granted to this appeal from a preliminary arbitration decision. This required addressing, as set out in Torok and other case law, the apparent strength of the appeal.
Bains and RBC General Insurance Company, (FSCO P09-00005, September 8, 2010) notes average appeal expense awards of $2,812.91 to insurers. The Appellant’s expenses, restricted to its leave application, are $2,023.56, not significantly lower. The Respondent’s claimed $4,317.64 is also somewhat lower than the average $4,733.58 awarded to successful insureds.
Arbitrator Makepeace confirmed in Henri and Allstate Insurance Company of Canada, (OIC A-
007954, August 8, 1997) that a line-by-line assessment of the expenses claimed was not appropriate. Rather, a global assessment of reasonable expenses should be made.
The Appellant does not object to the hourly rates claimed. I find the hourly rates claimed by the Respondent reasonable. Specifically, I find the $150 an hour claimed by counsel reasonable, especially considering the competence and assistance of the submissions provided.
The Appellant does not object to the disbursements claimed. I find the claimed disbursements of $40.68 reasonable.
In State Farm Mutual Automobile Insurance Company and Blakely, (FSCO P12-00005, September 20, 2012), I awarded the insured person her legal expenses fixed at $3,000, inclusive of HST, (also allowing $150 an hour) in successfully resisting a leave to appeal application. That case involved a very narrow legal point regarding the deductibility of the child’s benefit payable under the Canada Pension Plan.
I find the 24 hours of counsel time (plus 6 hours for a clerk at $30.82 an hour) claimed by the Respondent reasonable. They are not out of line with the 18.6 hours of counsel time claimed by the Appellant.
Accordingly, the Appellant shall forthwith pay the Respondent his legal expenses of this present appeal, fixed in the amount of $4,317.64, including HST.
June 2, 2015
Lawrence Blackman
Director’s Delegate
Date