Fee Nung Wong v. St. Paul Fire & Marine Insurance Company, 2015 ONFSCDRS 95

Financial Services Commission of Ontario / Commission des services financiers de l’Ontario

Neutral Citation: 2015 ONFSCDRS 95

FSCO A09-001953

BETWEEN:

FEE NUNG WONG

Applicant

and

ST. PAUL FIRE & MARINE INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before: Arbitrator John Wilson

Heard: By written submissions.

Appearances: Darryl Singer for Ms. Wong Michael Chadwick for St. Paul Fire & Marine Insurance Company

Issues:

The Applicant, Fee Nung Wong, was injured in a motor vehicle accident on March 13, 2008. In a decision dated September 30, 2010, I dealt with her claims for statutory accident benefits under the Schedule.¹ I made the following orders, while reserving on the issue of expenses:

Ms. Wong was not injured as a result of an "accident" as defined in section 2. (1) of the Schedule.
Consequently, Ms. Wong's application for arbitration is dismissed.
I reserve on the issue of expenses.

St. Paul Fire & Marine Insurance Company ("St. Paul") has since advised that it has been unable to reach agreement on the issue of expenses and that it wishes to pursue its claim for expenses. It has now served and filed the Bill of Costs for its counsel in this matter, Mr. Chadwick, and has requested a formal determination of the issue of expenses.

The issue in this further hearing is:

Is St. Paul entitled to its expenses incurred in respect of this arbitration hearing?

Result:

Ms. Wong shall pay to St. Paul $5,000.00 including H.S.T. as its fixed costs in this matter

EVIDENCE AND ANALYSIS:

St. Paul has put forward a claim for expenses and disbursements totalling some $7,010.85 and has requested an order that Ms. Wong be required to reimburse it for these expenses.

Rule 75 of the Dispute Resolution Practice Code (the "Code"), relating to the expenses of parties, reads as follows:

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.

While there are some differences between the courts and FSCO in the treatment of expenses or costs, one important criterion in both systems is the success or failure of any party to an arbitration.

In this arbitration I found that Ms. Wong was not injured as a result of an accident and hence was not eligible for the accident benefits that she had claimed from St. Paul. Clearly St. Paul was successful in the arbitration.

St. Paul also filed an offer to settle pursuant to Rule 76 of the Code. St. Paul clearly bettered the amount contained in the offer to settle, since, as a consequence of my decision following the hearing, Ms. Wong received zero benefits.

While there are often interesting issues involved in the determination of whether or not an accident took place, in this arbitration the result turned on the application of established case-law, some dating back to a century or more. This was not a "novel issue" as expressed in Rule 75.2 (c) of the Code.

Having heard of no extenuating or mitigating circumstances that could affect an order of expenses, I find that St. Paul is entitled to an award of expenses from Ms. Wong.

Quantum of expenses:

As noted above, St. Paul claims an award of $7,010.85 as its expenses in this matter.

An award of expenses at arbitration is rarely the occasion for a detailed line by line review of a Bill of Costs, There are, however, some general principles that may be applied in determining the appropriateness of an amount claimed.

Of primary importance is the policy that expenses are based on the amounts set out in the appropriate legal aid tariff, rather than the full indemnity costs actually incurred by a party.

The Code allows for one important variation on this policy at Rule 78.1 which provides that "where an adjudicator is satisfied that a higher amount for legal fees to an insured person is justified, an hourly rate of up to $150 may be awarded."

It is important to note that this exception only applies for legal fees to an insured person, and does not authorize a higher amount for counsel for an insurer, such as Mr. Chadwick.

Unfortunately, Mr. Chadwick, by oversight or misunderstanding, has chosen to base his fees claimed on the rate for counsel for an insured rather than an insurer.

While I acknowledge that even $150 per hour does not reflect the current market rates for experienced litigation counsel, Mr. Chadwick is clearly not entitled to this amount in the context of an accident benefit arbitration.

Such issues may soon become moot however since even the notoriously parsimonious legal aid tariff is beginning to catch up to the so-called experienced counsel exception provided by the Code.

Unfortunately for Mr. Chadwick, the legal aid tariff tier 3 rate for 2010 (most experienced counsel rate) ran from only $101.81 to $106.90 per hour .

I accept that Mr. Chadwick, as a distinguished counsel with significant years at the bar, would be eligible for the tier 3 rate. At that rate, however, Mr. Chadwick is only entitled to some 70% of the amounts that he has billed. Including H.S.T. this would mean a reduction of about $1,998.00.

Since the balance of the Bill of Costs appears on its face to be acceptable I would find that St. Paul is entitled to an amount which I would round out and fix at $5,000.00 as its expenses in this matter. This amount includes H.S.T.

May 1, 2015

John Wilson, Arbitrator

Date