Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2015 ONFSCDRS 78

FSCO A12-004216

BETWEEN:

SAMANTHA BATUZSKIN

Applicant

and

TD GENERAL INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before: Stuart Mutch

Heard: March 10, 2015 at the offices of the Financial Services Commission in Toronto

Appearances: Mr. Luke Hamer for Ms. Batuzskin

Mr. Geoffrey Keating for TD General Insurance Company

The Applicant, Samantha Batuzskin was injured as the result of a motor vehicle accident that took place on September 12, 2008. She applied for benefits from TD General Insurance Company (“TD”), payable under the Schedule.¹ Disputes arose as to Ms. Batuzskin’s claims. The parties were unable to resolve their disputes through mediation, and Ms. Batuzskin applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

A decision concerning her entitlement to benefits was issued November 24, 2014. In that decision, I indicated that if the parties could not agree on entitlement to, or the amount of expenses of the proceeding they could request an appointment to determine expenses in accordance with Rule 79.1 of the Dispute Resolution Practice Code.

The parties were unable to do so and on March 10, 2015 they appeared before me and made submissions as to expenses.

Issues:

1. Is either party entitled to a part or all of its expenses as a result of the hearing that took place June 3, 4, 5, 6, 2014 pursuant to Rule 75 of the Dispute Resolution Practice Code?

Result:

1. The Applicant is entitled to $11,675.93 in fees plus $8,961.71 in disbursements for a total of $20,637.64, plus HST where appropriate.

Analysis

Rule 75 of the Dispute Resolution Practice Code states:

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. (Emphasis added)

Relevant Criteria

I consider criteria (a), (b) and (d) in the above to be relevant. The remainder are not relevant to this case.

Offers to Settle

Both parties made offers to settle prior to the hearing. There was an offer made by the Applicant to settle matters on a full and final basis which I do not consider relevant. On May 15, 2014, the Applicant’s counsel sent an offer to TD’s counsel to settle the issues in dispute for the sum of $92,500.00 plus costs and disbursements.²On June 2, 2014, the day before the commencement of the hearing, TD’s counsel sent an offer to the Applicant’s counsel of $22,599.70 plus costs, disbursements and interest for settlement of the issues in dispute.³ The Applicant was awarded $28,527.00 as a result of the hearing, exclusive of interest, according to the calculations of her counsel.

Degree of success

The Applicant had mixed success at this hearing. She claimed weekly income replacement benefits for an indefinite period and attendant care and housekeeping benefits for the two year period following the accident as well as various medical benefits and costs of examinations. She was awarded weekly income replacement benefits for two years post-accident and attendant care and housekeeping benefits to one year post-accident. She was awarded three of eight separate medical benefits claims and two of three cost of examinations claims.

The parties differ as to the Applicant’s degree of success at the hearing. Counsel for the Applicant pointed out that the amount awarded to the Applicant exceeded TD’s offer by nearly $6000, or approximately 26% of the offer. He also notes that the offer was made on the eve of arbitration and that the Applicant did not have a reasonable amount of time to evaluate the offer.

TD takes the position that the Applicant was awarded just $28,527.00 or approximately 25% of what she might have been awarded had she been 100% successful, which TD calculates to be $112,600. TD argues that it therefore enjoyed a greater degree of success and that the Applicant enjoyed a “minimal” degree of success.

In Dobkina and Commercial Union Assurance Company⁴ Ms. Dobkina was awarded her expenses even though she succeeded in obtaining only 6% of the sums claimed. The arbitrator noted that her claims were not without merit and the three day arbitration was not frivolous although he found some of the testimony unhelpful.

There is no question that the Applicant’s success was mixed, but it was success nonetheless. It is not diminished by the fact that the Applicant was not successful in claiming a Special Award. Up to the time of the hearing, almost six years after the accident, TD had paid the Applicant nothing in the way of income replacement benefits, housekeeping or attendant care benefits. As I noted in my decision, the Applicant was tardy in providing supporting documentation to TD. However, by 2011 TD had been provided with enough medical evidence to support the Applicant’s claim that she was quite seriously impaired after the accident and required attendant care and housekeeping assistance for at least six months after the accident.

I believe the same principle applies to this arbitration. I agree that the Applicant was forced to proceed with the arbitration in order to obtain any benefits from TD. Although TD’s offer could be said to be quite close to the final result, both in the claims awarded and the sum total, it was not incumbent on the Applicant to accept it. She proceeded with the arbitration and obtained a better result than if she had accepted the offer.

Prolonging the proceeding

Number of witnesses

TD argues that the arbitration was prolonged unnecessarily by the Applicant calling six expert witnesses and by my consenting to the Applicant’s exceeding the limit of two.

From the adjudicative perspective it is difficult to place limits on the number of witnesses called without raising the concern that one, if not both of the parties will be deprived of a fair hearing, either an applicant being deprived of an opportunity to introduce probative evidence, or the opposing party being denied the opportunity to cross-examine. The adjudicator cannot predict which witnesses will provide useful evidence and which will be discredited under cross-examination. This is the job of counsel who have presumably met the witnesses and had a chance to judge their usefulness.

In my view, the oral evidence of Dr. Gozlan, Dr. Wudom and Fred Winch added little to the documents authored by them. Dr. Friedlander was a clear and cogent witness whose testimony bolstered the probative value of his report. At the same time Dr. Almas, who was called by TD, diminished the weight of his report when it became apparent that his examination of the Applicant was perfunctory and his conclusions regarding her ability to work were found to be unsubstantiated.

Tardiness producing medical records

TD also argues that the Applicant’s tardiness in providing medical documents and documents relating to her income has unnecessarily prolonged the proceedings.

I think there is some truth to TD’s argument that provision of bank records would have allowed TD to better determine the Applicant’s entitlement to Income Replacement Benefits. That is not to say that there would not still be conflict regarding the amount.

Certainly there was little medical documentation provided to TD until the report of Dr. Rod dated August 2010 and little financial information provided until March 2011. However, as noted in my decision, by late 2011 there was sufficient evidence provided to conclude that the accident had a long term effect on the Applicant’s ability to function at her pre-accident level and that she was substantially unable to perform her pre-accident self-care, housekeeping and vocational tasks for the first six months after the accident. While some documentary verification was lacking, there was enough financial information to calculate a modest weekly amount of income replacement benefits. Indeed, TD accountants stated in a letter dated November 9, 2011, “it appears that the calculations of the Davis Report may be plausible for the first 104 weeks of her disability, subject to verifying same to objective financial evidence”. This is reflected in TD’s offer to settle of June 2, 2014⁵, whereby it offered attendant care benefits and housekeeping benefits for six months post-accident and income replacement benefits to the two-year mark. To my mind TD was essentially acknowledging it was liable to pay these benefits and it should have been able to come to that conclusion by the latter part of 2012, at the latest. So, while the Applicant may have delayed the adjustment of her claim by the late provision of documentation, TD prolonged the proceeding, which was commenced in July 2012 by refusing to acknowledge a degree of liability for the aforementioned benefits until the very eve of arbitration.

TD also claims that the hearing was unnecessarily prolonged by the Applicant’s tardiness in identifying precisely what amounts were being claimed in IRB benefits. Indeed, I understand those figures were not identified until the morning of the hearing. However I don’t see how this prolonged the hearing. TD’s position was that the Applicant provided insufficient documentation to make their own determination as to quantum. Greater precision in the Applicant’s claim would not have altered or prejudiced its position.

I find that both parties have unnecessarily prolonged this proceeding. However, that does not alter the fact that the Applicant was forced to proceed with the arbitration in order to obtain benefits. I find she is entitled to her reasonable expenses, with some reduction for unnecessary testimony.

Quantum of Expenses

The Applicant has presented a Bill of Costs.⁶ Following are my observations.

• The Applicant’s counsel billed 45 hours for a hearing that lasted 3.5 days. The actual length of hearing days, as I recall, averaged 7 hours at the most. I appreciate that counsel has included review and preparation time in this figure but that is not properly included in actual hearing time hours. I would estimate the total hearing time to be approximately 25 hours. The Applicant’s counsel billed 39 hours of his time in preparation for this hearing plus a further 101 hours for the work of others at his firm including paralegals and assistants for a total of 140 hours. He admitted that these were estimates and that he and they had not kept dockets. This is ratio of approximately 5.5:1 preparation to hearing time which exceeds the generally accepted maximum of 4:1. I find a 3:1 ration to be more appropriate in these circumstances. I am reducing the total billable hearing time by a further three hours as, in my view, some of the witnesses added little to the proceedings. I therefore allow 22 hours of billable hearing time and 66 hours of preparation time.

• Applicant’s counsel has billed his time at a rate of $125.00 per hour. Rule 78.1 of the Dispute Resolution Practice Code provides that the maximum amount that may be awarded for legal fees is an amount calculated using the hourly rate established in the Legal Aid Services Act, 1998, with some discretion for an increase to a $150.00 per hour maximum. The Legal Aid 2014 hourly rate for lawyers of Applicant’s counsel experience is $103.94. I find $110.00 per hour to be a reasonable rate for Applicant’s counsel’s services.

I find that the Applicant is entitled to her expenses as follows:

i. Fees

For pre-arbitration work, including mediation, as in the Bill of Costs

I have reduced the hourly rate billed for Christopher Jackson and Donna Wardell to the 2014 Legal Aid rate for Law Clerks of $30.83 per hour

$ 2,390.71

From mediation to pre-arbitration.

Rate for Luke Hamer reduced to $110.00 per hour, rate for Christopher Jackson and Donna Wardell reduced as above

1,493.26

Work from pre-arbitration to arbitration – 3 to 1 ratio. 66 hours of preparation allowed. This comes to approximately 47% of the time billed.

Rates for Luke Hamer,Christopher Jackson, Donna Wardell reduced as above, Jacob Murad and Sharon Rondaris reduced to Law Clerk rate as above

4,143.70

The arbitration hearing:

Luke Hamer 22 hours at $110.00/hour

Christopher Jackson 20 hours at $30.83/hour

3,036.60

Post arbitration work

Luke Hamer 5 hours at $110.00/hour

Christopher Jackson 2 hours at $30.83/hour

611.66

TOTAL

$11,675.93

ii. Disbursements

Paid to the Minister of Finance for Application for Arbitration

$ 100.00

Paid to Fred Winch for a Vocational Assessment - $2,148.50

The maximum allowable under the Expense Regulation (section 5(3)) for preparation of a report by an expert is $1500. Mr. Winch’s report was brief and less than thorough.

500.00

Paid to Dr. Wudom for medical records

249.35

Paid to Rehab First re arbitration preparations and witness testimony - $1,615.75

The maximum payable for preparation of an expert witness is $500 and $200 per hour for testimony. Ms. Smith testified for less than two hours. I will allow 2 hours for testimony and two for preparation at $100 per hour and one hour of travel time at the rate of $100 per hour

500.00

Paid to Dr. Wudom for witness testimony - $1,550.00

Dr. Wudom testified for less than two hours. I will allow two hours for testimony and three hours of travel time at the rate of $200 per hour.

$ 1,000.00

Paid to Fred Winch re arbitration preparations and witness testimony - $1,387.00

Mr. Winch testified for less than one hour. I will allow one hour of testimony at the rate of $100 per hour and three hours of travel time at the rate of $100 per hour.

400.00

Paid to the Ministry of Finance for decoded OHIP summary

94.00

Paid to Dr. Friedlander of ProMed Evaluations regarding arbitration preparation $540.00

The maximum allowable under the Expense Regulation (section 5(3)) for preparation of a report by an expert is $1500.

500.00

Paid to Dr. Gozlan of ProMed Evaluations regarding arbitration preparation

300.00

Paid to Dr. Friedlander of ProMed regarding witness testimony - $3,370.00

Dr. Friedlander testified less than 2 hours. I will allow 2 hours and three hours travel time at the rate of $200 per hour.

1,000.00

Paid to Jesse Hawley of Davis Martindale re witness testimony - $2,005.74

I will allow 2 hours plus 2 hours travel time at $100 per hour.

400.00

Paid to Davis Martindale for supplemental letter — $2,401.25

The maximum allowable under the Expense Regulation (section 5(3)) for preparation of a report by an expert is $1500.

1,500.00

Paid to Dr. Gozlan of ProMed regarding witness testimony — $2,655.00

I will allow 2 hours for testimony plus 3 hours of travel time at $200 per hour

1,000.00

Paid to staff for mileage

450.47

Paid for audio visual equipment rental

325.00

Paid for courier

242.89

Paid for document binding

100.00

Paid for photocopying

200.00

Paid for scanning

100.00

TOTAL

$8,961.71

I find that the Applicant is entitled to $11,675.93 in fees plus $8,961.71 in disbursements for a total of $20,637.64, plus HST where appropriate.

April 17, 2015

Stuart J. Mutch

Arbitrator

Date

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2015 ONFSCDRS 78

FSCO A12-004216

BETWEEN:

SAMANTHA BATUZSKIN

Applicant

and

TD GENERAL INSURANCE COMPANY

Insurer

ORDER

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

1. TD shall pay the Applicant her expenses in the amount of $11,675.93 in fees plus $8,961.71 in disbursements for a total of $20,637.64, plus HST where appropriate.

April 17, 2015

Stuart J. Mutch

Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2Copy of the letter containing the offer was provided at the expenses hearing.
3. 3Applicant’s Brief, Tab 11
4. 4Dobkina and Commercial Union Assurance Company (FSCO A98-001232, July 25, 2000)
5. 5Tab 11, Respondent’s Brief
6. 6Tab 2, Applicant’s Brief