Julia Lo-Papa v. Certas Direct Insurance Company, 2015 ONFSCDRS 25

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2015 ONFSCDRS 25

FSCO A12-005538

BETWEEN:

JULIA LO-PAPA

Applicant

and

CERTAS DIRECT INSURANCE COMPANY

Insurer

DECISION ON EXPENSES (AMENDED)

*Minor error under “Appearances” corrected on August 3, 2017, in accordance with the Dispute Resolution Practice Code and section 21.1 of the Statutory Powers Procedures Act.

Before: Arbitrator Barry S. Arbus, Q.C.

Heard: By telephone conference on November 7, 2014 and by written submissions completed on December 4, 2014

Appearances: Ms. Merai Daoud for Ms. Julia Lo-Papa

Ms. Pamela Quesnel and Ms. Kimberly Tye for Certas Direct Insurance Company

Issues:

The Applicant, Ms. Julia Lo-Papa, was injured in a motor vehicle accident on October 10, 2010 and sought accident benefits from Certas Direct Insurance Company (“Certas”), payable under the Schedule.¹ A dispute arose as to entitlement to benefits and an Arbitration Hearing was held on January 29, 2014 further to which a Decision was issued, dated March 14, 2014.

A portion of the Decision reads as follows:

“1. The Applicant, Julia Lo-Papa, is subject to the Minor Injury Guideline Cap of $3,500 as defined by the Schedule.

The Applicant is not entitled to funding for the treatment plans and assessments in dispute.”

Neither party made submissions on expenses and because they were unable to resolve this issue, they subsequently scheduled an Expense Hearing before me in accordance with the provisions of Rule 79 of the Dispute Resolution Practice Code.

The issue in this Expense Hearing is:

Should an Expense Oder arising from the Hearing in this matter be made in favour of Certas and, if so, in what amount?

Result:

Certas Direct Insurance Company is entitled to expenses incurred with respect to the Hearing in the amount of $10,701.50 inclusive of HST.

EVIDENCE AND ANALYSIS:

On November 7, 2014, I had a telephone conference with counsel for both parties to deal with the issue of expenses of this Arbitration. Under subsection 282(11) of the Insurance Act (as reiterated in Rule 75.2 of the Dispute Resolution Practice Code), 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:

Each party’s degree of success in the outcome of the proceeding;
Any written Offers to Settle;
Whether novel issues are raised;
The conduct of a party or the party’s representative;
Whether any aspect of the proceeding was improper, vexatious or unnecessary.

After discussion with both parties’ counsel, it was agreed that the only two issues that are relevant for the Decision in this matter were item 1, “each party’s degree of success in the outcome of the proceeding” and 2, “any written Offers to Settle”.

Each party then agreed to provide written submissions to support their positions.

The Applicant’s counsel, in supporting her submission that the Respondent is not entitled to costs, submitted that Certas had submitted an Offer to Settle this matter on a full and final basis on November 27, 2013 which was a date after the Mediation and Pre-Arbitration Hearing but before the formal Arbitration. This Offer to Settle was only open for acceptance until Friday November 29, 2013.

Ms. Daoud, on behalf of the Applicant, stated that because Ms. Lo-Papa was enduring difficult personal circumstances with respect to her pregnancy and familial circumstances, they were unable to contact her to obtain instructions until January 9, 2014, at which time they wrote to counsel for the Respondent accepting the Respondent’s Offer to Settle. The Respondent’s counsel responded in writing stating that although they were prepared to accept the Respondent’s position, they were not prepared to forego costs in this matter. It was also their submission that the Applicant’s letter of January 9, 2014, accepting the Respondent’s position, should be considered a counter-offer to settle this matter.

The Respondent’s counsel also raised the view that issues presented at the Arbitration were novel and this should be considered in this Expense Decision as well.

Counsel for Certas states that the only criteria to be reviewed are each party’s degree of success and any written offers made in accordance with Rule 76. They also submit that there were no novel issues raised in the proceeding. I will deal with the latter issue first.

At our telephone conference held on November 7, 2014, it was agreed between counsel that the only two issues to be raised were each party’s degree of success and any written offers to settle and that I would restrict my Decision on Expenses to these issues only. Accordingly, I do not need to address the issue as to whether or not a novel issue has been raised in this proceeding.

Certas was completely successful at the Arbitration as the Applicant was found to be subject to the Minor Injury Guidelines and therefore was not entitled to funding of the treatment plans or assessments in dispute. Accordingly, Certas has satisfied the first criterion as set out in Rule 75.2.

In dealing with the Offers to Settle, the first formal Offer to Settle was made by Certas’ counsel on November 27, 2013 with a very short time for acceptance, being only two days. Although I am sympathetic to Ms. Lo-Papa’s personal situation, the fact is that no acceptance was received until six weeks later, in January 2014. Although I would have been sympathetic for a slight delay in the response, I do not find a six week delay from the deadline to be acceptable in determining costs.

Ms. Lo-Papa’s counsel then issued a counter-offer to settle on January 10, 2014 by offering to withdraw their Application for Arbitration, which Certas’ counsel responded to by agreeing, provided that Certas would not forego its right to claim costs. Ms. Lo-Papa’s counsel treated this as a rejection of the Offer to Settle and accordingly, this matter proceeded to Arbitration.

Certas’ counsel submits that it was open to the Applicant bringing a Motion to withdraw its Application for Arbitration and argue costs at that Hearing. That would have substantially reduced the costs in this matter by having both parties avoid the costs of the Arbitration Hearing which took place on January 29, 2014.

Rule 76 of the Dispute Resolution Practice Code spells out, in substantial detail, the terms under which an Adjudicator will consider Offers to Settle in connection with an award of expenses. I am satisfied that the original Offer to Settle made by Certas was not accepted by the Applicant on a timely basis. I am also satisfied that the new Offer to Settle made by the Applicant on January 10,

2014 offering to withdraw the application, when responded to by Certas’ counsel in accepting this but adding the proviso that Certas would not forego its right to claim costs, amounted to a new offer and was not agreed to by the Applicant’s counsel.

Accordingly, I am satisfied that any Offers to Settle made by either party to this Arbitration are not to be considered in the awarding of expenses.

An hourly amount for legal fees is governed by Rule 78 of the Dispute Resolution Practice Code which provides that the hourly rate established under the Legal Aid Services Act, 1998 shall apply subject to a 25% increase for lawyers with the equivalent of ten years’ experience or more, and an increase of an hourly rate up to $150.00 for lawyers with the equivalent of ten years’ experience or more. Both Kimberly Tye and Robert Rogers, Counsel for Certas, have in excess of ten years’ experience.

The Insurer, in submitting its cost outline, provided a time summary for Kimberly Tye, in-house counsel for Certas, and her law clerk, plus the fees and disbursements charged by Evans Philp, outside counsel for Certas.

EXPENSES:

In reviewing the time expended in preparing for and attending at the Arbitration, I am satisfied that the total time expended by both counsel, being 59.8 hours and 24.3 hours by the respective law clerks, is reasonable and appropriate for this Arbitration. Accordingly, I award the Respondent the sum of $10,701.50 inclusive of HST.

February 11, 2015

Barry S. Arbus

Arbitrator

Date