Allstate Insurance Company of Canada v. T.S., 2015 ONFSCDRS 152

Commission des services financiers de l’Ontario

Neutral Citation: 2015 ONFSCDRS 152

Appeal P11-00032

Appellant

and

Respondent

BEFORE:

David Evans

Jennifer Griffiths for Allstate Insurance Company of Canada

Patrick Di Monte for T.S.

By written submissions received by May 8, 2015

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

T.S. shall pay Allstate Insurance Company of Canada its legal expenses of the arbitration and appeal proceedings herein, fixed at the amount of $20,000.00, inclusive of disbursements and HST.

July 17, 2015

David Evans Director’s Delegate

Date

REASONS FOR DECISION

I. BACKGROUND

Allstate Insurance Company of Canada was successful in its appeal of the order of Arbitrator Wilson dated November 15, 2011, as well as of several preceding interim decisions. The Arbitrator had found that T.S. suffered a catastrophic impairment under s. 2(1.1)(g) of the SABS‑1996¹ due to a marked or extreme impairment due to mental or behavioural disorder.

However, I found that the evidence presented by T.S. could not support a finding of catastrophic impairment because the medical evidence she led did not address the relevant criteria, and her uncorroborated evidence standing alone was insufficient to prove catastrophic impairment.

I also found that the Arbitrator failed to give adequate reasons for his decision, reversed the burden of proof at several key points of the decision, and failed to fairly consider the evidence from both parties. However, I did not order a rehearing, considering that there were several arbitration orders issued, the arbitration hearing itself took a number of days, and I had no confidence that repeating the process would result in any better evidence.

Accordingly, I struck the orders that T.S. sustained a catastrophic impairment and was entitled to attendant care benefits and housekeeping expenses more than 104 weeks after the accident of November 21, 2001.

At the end of my appeal decision, I asked if the parties were agreeable to my deciding both arbitration and appeal expenses. While T.S. did not agree when she was unrepresented, her counsel did address both sets of expenses, seeking that there be no order as to expenses either at arbitration or appeal. I find that the most just, quickest and least expensive resolution of the dispute is for me to decide all the expenses, especially since only a Delegate under s. 283(4) of the Insurance Act has the specific power to decide a matter on the record without a hearing, which is how I said I would deal with expenses. This saves a further hearing on arbitration expenses, and considering the time that has gone into this case already, I find this is the most expedient way to proceed.

II. ANALYSIS

The criteria for an award of expenses are set out in R. 75.2 of the Dispute Resolution Practice Code (Fourth Edition, Updated – January 2014). Allstate submits that it is entitled to expenses under almost all of them.

Criterion (a) is “each party’s degree of success in the outcome of the proceeding.” While T.S. submits that she was entirely successful in the interim proceedings and the proceedings below to a significant degree, I find that her ultimate lack of success and Allstate’s success on appeal means that this criterion favours Allstate.

There were no offers to settle per criterion (b).

Regarding whether novel issues were raised in the proceeding under criterion (c), T.S. submits that there were novel issues, specifically whether the evidence tendered met the definition of catastrophic impairment. However, I find there was nothing novel in this factual determination in this case, and as noted above the evidence was entirely insufficient to lead to a finding of catastrophic impairment. Accordingly, this criterion does not favour T.S.

Allstate submits that it is entitled to its expenses under criterion (d), namely conduct of a party that “tended to prolong, obstruct or hinder the proceeding,” and (e), “whether any aspect of the proceeding was improper, vexatious or unnecessary.” In that regard, T.S. submits that she did not create the error of law that allowed the appeal, so the appeal was outside her control, and as an unrepresented litigant in a complex proceeding she could not have been expected to know there had been an error of law.

However, it was the choice of T.S. to proceed at arbitration and appeal without legal advice. T.S. also prolonged the hearing when she so tainted the evidence of a witness that the evidence was struck and when she failed to call her treating psychiatrist. The hearing was dragged out because of her conduct; by way of contrast, Allstate presented its case in under three days. In any event, even if it could be said the delays in the arbitration proceedings were simply as a result of an attempt to accommodate T.S., at best these criteria do not favour T.S. either.

Accordingly, I find that Allstate is entitled to its legal expenses both at arbitration and appeal.

With respect to quantum, Allstate seeks a total of $64,091.96 in arbitration and appeal expenses. This represents 270.1 hours of counsel time on the arbitration proceeding and 97 hours on the appeal. It submits that this high expenditure of time was required because of the delays caused by T.S. at the arbitration proceeding and by the fact that it had to extensively review the transcripts to address the errors it was alleged to have made. The solicitors’ fees claimed are thus over $28,000 at arbitration and $12,000 on appeal, plus HST. The fees are based on the appropriate tariff fees.

While I acknowledge that Allstate is entitled to expenses higher than the average, some of the hours claimed at arbitration relate to a recusal motion that was later ultimately unsuccessful on judicial review, and the appeal expenses include 15 hours for drafting the bill of costs, which I find excessive.

As has often been stated, 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.

I find that a reasonable global assessment for arbitration fees is $10,000, inclusive of HST.

Regarding appeal expenses, Bains and RBC General Insurance Company, (FSCO P09-00005, September 8, 2010) notes average appeal expense awards of $2,812.91 to insurers. I find that Allstate is entitled to more than the average in this case, as a day of appeal hearing was wasted, and the submissions required an extensive review of the transcripts. Accordingly, I find a reasonable global assessment for appeal fees is $5,000, inclusive of HST.

As for the disbursements claimed of $18,623.89, about $10,000 is for the transcripts. Allstate submits that T.S. should be liable to pay them because the Arbitrator ordered that Allstate was to obtain the transcripts from July 2010 onwards and to file them with the Commission to assist in his deliberation. However, as I stated in Kingsway General Insurance Company and Pereira, (FSCO P05-00031, September 17, 2007), transcript costs are generally not recoverable. Rule 74.3 provides that, where a party orders all or a portion of the transcript of a proceeding, the party must directly pay the person or agency providing the transcript. Further, there is no specific provision that the expense can be reclaimed, unlike filing fees, and the transcript expense does not easily fit in the “other out-of-pocket” expenses category. The fact that no caps are placed on expenses for court reporters or transcripts, although they may add up to thousands of dollars, suggests that transcripts are not meant to be recoverable as expenses.

I find $5,000, inclusive of HST, reasonable towards disbursements.

Accordingly, I find that Allstate is entitled to its legal expenses of the arbitration and appeal herein in the amount of $20,000, inclusive of disbursements and HST.

July 17, 2015

David Evans Director’s Delegate

Date

Footnotes

The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.