Neutral Citation: 2015 ONFSCDRS 196 FSCO A14-000553

BETWEEN:

SCOTT ROGERS Applicant

and

TD HOME AND AUTO INSURANCE COMPANY Insurer

REASONS FOR DECISION

Before: Arbitrator Marcel D. Mongeon

Heard: In person at ADR Chambers on August 17, 2015

Appearances:

Mr. Scott Rogers did not participate Ms. Seema Passi participated for Mr. Rogers Ms. Maya Krishnaratne participated for TD Home and Auto Insurance Company

Issues:

The Applicant, Mr. Scott Rogers, was injured in a motor vehicle accident on August 31, 2011 and sought accident benefits from TD Home and Auto Insurance Company (“TD”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mr. Rogers, through his representative, applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c. I.8, as amended.

At the outset of the Hearing in this matter, the Applicant sought to withdraw the Application for Arbitration (“the application”). The Insurer did not consent to the withdrawal unless I considered making the withdrawal conditional on a costs order payable by the Applicant.

The issues in this Hearing are:

Is the Applicant entitled to withdraw the application?
If the Applicant is entitled to withdraw the application, what conditions, if any, as to expenses should be applicable?

Result:

The Applicant’s request to withdraw his application is granted.
The Applicant shall pay the Insurer expenses of $2,500.00 and disbursements of $1,800.00, both amounts inclusive of HST.

EVIDENCE AND ANALYSIS:

The Applicant sought to withdraw this application at the commencement of what was scheduled to be a three-day Hearing.

The only substantive issue for determination in the Hearing was whether or not the Applicant was entitled to a Non-Earner Benefit and, if so, for what time frame. At the time of the accident, the Applicant was 15 years old. The scheduling of this Hearing was delayed at the Pre-Hearing conference to ensure that the Applicant would be 18 years old at the time of the Hearing.

The Applicant sought to withdraw the application on a without costs basis.

The Insurer was not prepared to agree to such a withdrawal unless costs would be ordered.

The Dispute Resolution Practice Code (the “DRPC”) provides:

70.2 An adjudicator may permit a party to withdraw all or part of a dispute where all parties agree.

70.3 Where a party does not agree to the withdrawal, an adjudicator may:

(a) permit the withdrawal on such terms and conditions as he or she considers just;

(b) award expenses to either party as permitted by Rule 75 and following.

I invited the parties to provide submissions on costs that I should consider.

The Insurer submitted a draft bill of costs and disbursements. The costs outlined showed preparation for a three-day Hearing. The disbursements included the Insurer’s $3,000.00 arbitration fee; a $1,600.00 cancellation fee for a medical witness; and other minor disbursements in aggregate slightly more than $200.00.

The Applicant provided information that the Applicant is 18 years old and continues to live with his mother and has little means to pay any expenses order that I may make.

If I allow the withdrawal without an expenses order, my decision might be taken as precedent for the proposition that Applicants can freely force Insurers to Arbitration Hearings with no repercussions if those applications are withdrawn at the last minute.

Rules 70.3 (cited above) and 75.2 of the DRPC are applicable. Rule 75.2 reads as follows:

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.

I note the first criterion (a) of Rule 75.2. In this case, although the Insurer has prevailed given the withdrawal, there is no evidence before me that would suggest that scheduling the Hearing was unnecessary.

I have also considered criteria (d) and (e). I do not find any evidence that either party in this Hearing acted in a manner that was improper, vexatious or unnecessary. The only concern that I have is that the withdrawal might likely have been sought earlier than the outset of the Hearing. I note that normally adjournments should be sought at least seven (7) days prior to a Hearing (see DRPC Practice Note 9 on Adjournments). In leaving the withdrawal request until the last moment, I believe that some award of expenses against the Applicant is warranted.

In setting the level of expenses, I note that the legal fees I am prepared to award are only a partial indemnity of the expenses incurred by the Insurer and within the other limits prescribed. I believe that this is warranted based on the criteria that I have cited above from Rule 75.2.

I find that the correct amount of legal fees to be included in the expenses should be $2,500.00 inclusive of HST. I have set this amount as a reasonable award for the preparation costs for the Hearing incurred by the Insurer.

With respect to the disbursements, I am not allowing the arbitration fee of $3,000.00. Section 7 of the Expense Regulation only permits the claiming of this fee in specific situations. I have no evidence that such situations are applicable here. (See also Saleh and State Farm, FSCO A12-007868, July 21, 2015 under the heading ‘Disbursements’).

I am allowing the disbursement of the cancellation fee of an expert witness of $1,600.00 and incidental expenses of $200.00 for a total of $1,800.00. In setting the amount for the expert witness, I have considered the provisions of Section 5 of the Expense Regulation relating to the attendance of expert witnesses. The section speaks to the attendance of witnesses and, in this case, the Hearing never happened, so there was no such attendance.

However, I believe that it is appropriate that the Applicant pay the cancellation expense. The Applicant could have avoided this cancellation by giving earlier notice of the withdrawal of the application. I consider the amount sought of $1,600.00 for the cancellation fee of the expert witness to be reasonable and within the Expense Regulation. All expenses are inclusive of HST.

EXPENSES:

The withdrawal of the application is allowed on the condition that expenses of $2,500.00 and disbursements of $1,800.00, both amounts inclusive of HST, are payable by the Applicant to the Insurer.

September 25, 2015

Marcel D. Mongeon Arbitrator

Date

Financial Services Commission of Ontario