Financial Services Commission des
Commission services financiers
of Ontario de l’Ontario
Neutral Citation: 2016 ONFSCDRS 186
FSCO A14-003818
BETWEEN:
QIN NIKKI CHEN
Applicant
and
TD GENERAL INSURANCE COMPANY
Insurer
DECISION ON EXPENSES
Before:
Arbitrator Lynda Tanaka
Heard:
By written submissions due on May 18, 2016
Appearances:
Ms. Qin Nikki Chen did not participate
Mr. Jason M. Kerr participated for TD General Insurance Company
Issues:
The Applicant, Ms. Qin Nikki Chen, was injured in a motor vehicle accident on April 2, 2012 and sought accident benefits from TD General Insurance Company (“TD”), payable under the Schedule.1 The parties were unable to resolve their disputes through mediation, and Ms. Chen, through her representative, applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c. I.8, as amended.
The decision on the claims for benefits was issued on December 14, 2015, denying the Applicant any recovery of benefits claimed. The decision provided for submissions to be made in writing to me if either party wished to claim expenses and disbursements. TD filed submissions claiming expenses in the amount of $33,680.48, inclusive of disbursements and HST.
The issues in this Expense Hearing are:
- Is TD entitled to its expenses, including disbursements and HST, of the Arbitration proceeding, and if so, in what amount?
Result:
- TD is entitled to its expenses of the Arbitration proceeding, including disbursements and HST, in the amount of $14,101.70.
EVIDENCE AND ANALYSIS:
Background
TD served its Insurer’s Expense Submissions, dated January 19, 2016, on Counsel who represented the Applicant at the Arbitration Hearing and it was forwarded to Yeung & Associates (“Yeung”), who were the representatives of record for the Applicant. Yeung sought instructions from the Applicant and, when that proved unsuccessful, notified the Applicant that it wished to be removed as her representative. On notice to the Applicant, Yeung brought a Motion to be removed as the Applicant’s representative that was heard April 28, 2016. I granted the request that Yeung be removed as the Applicant’s representative.
My decision on the Motion was dated May 9, 2016 and was sent to the Applicant by regular and registered mail. The Applicant was invited in that decision to contact ADR Chambers to advise how she wished to proceed and to provide submissions on the expenses claimed by TD. No contact was received from the Applicant and I am therefore issuing this decision on the TD request for an Order as to its expenses without further notice to the Applicant. She has been aware of the request by TD for almost four months and has taken no steps to instruct Yeung or to change her representative so that submissions could be made on her behalf or to make submissions herself.
I am satisfied that the Applicant has been given ample opportunity to arrange for her own representation or new representation. She has been notified of the claim against her. The material on the Motion, heard April 28, 2016, established that Yeung had tried to reach the Applicant by telephone and mail at various times since the decision of December 14, 2015. Yeung’s letter to her including the Insurer’s Expense Submissions was sent to her by registered mail but was returned to them as “not claimed”. I wrote to Yeung and to Counsel for TD on March 1, 2016 with a copy to the Applicant with respect to the claim for expenses against her as well as the motion to remove Yeung as her representative. Further, she was given additional opportunity to participate in the letter of May 9, 2016 removing Yeung as her representative.
The claim by TD
TD is claiming legal fees calculated at the rate that is authorized under Schedule 2 to O. Reg. 107/99 under the Legal Aid Services Act, 1998, totalling $25,662.96, HST of $3,336.18 and disbursements of $4,731.10, including HST.2
A review of these documents indicates that Mr. J. Jason Kerr (“JJK”) (called to the bar in 2006) and three Junior Lawyers (two called in 2013 and one called in 2011) worked on the file, together with two Law Clerks. The hourly rates used were $122.78 (JJK), $109.13 (Junior Lawyers) and $29.36 (Law Clerks).
The Arbitration Hearing was held over four days. The Hearing on August 10 and 12, 2015 lasted for full days. The Hearing on August 11, 2015 ended at approximately 2:30 p.m. (a morning and part of the afternoon) and on August 13, 2015, ended at 11:35 a.m.
Rule 75.2 of Schedule F of the Dispute Resolution Practice Code (“DRPC”) has the appropriate criteria to be considered. I have considered the various relevant criteria from that Rule.
Criteria 1: Each party’s degree of success in the outcome of the proceeding
TD was clearly successful in convincing me that the specific benefits claimed were not reasonable and necessary and that the Applicant’s case was insufficient for me to conclude that her impairments were not minor injuries. Her case was however sufficient to convince me that she continued to suffer ongoing impairments as a result of the accident and that she was not fabricating her symptoms to address family issues, as had been alleged by TD.
Criteria 2: Any written offers to settle that were made in accordance with the rules of practice and procedure applicable to the proceeding after the conclusion of Mediation and before the conclusion of the Arbitration
TD offered the Applicant $1,000.00 in an offer inclusive of costs on July 16, 2015. The offer was open only until July 25, 2015. On the date the Hearing commenced, there was no offer to settle outstanding.
TD indicated in its submissions (Insurer’s Costs Submissions, paragraph 29) that JJK had only docketed 3 hours, a Junior had docketed 30 hours and a Law Clerk had docketed 8 hours by the date the offer was made. The claim for those hours is $3,677.12. The offer of $1,000.00 inclusive of costs was unlikely to have covered the Applicant’s costs, much less to have addressed any risk of her recovering some part of her actual claim. But the offer was better than the outcome of the Hearing.
At the outset of the Hearing, the Arbitration Counsel for the Applicant indicated she would not be calling two health care practitioners who had been expected to give evidence on behalf of the Applicant. It was obvious from the reaction of TD’s Counsel that this was not what they had expected to happen on the first day of the Hearing. The analysis facing the Applicant on July 16, 2015 was therefore different than what actually happened at the Hearing when only one health care practitioner testified in support of her case. I therefore find that it was not unreasonable for the Applicant to reject the offer by TD.
Criteria 3: Whether any novel issues are raised in the proceeding
There were no novel issues raised in the proceeding.
Criteria 4: The conduct of a party or a party’s representative that tended to prolong, obstruct or hinder the proceeding, including the failure to comply with undertakings and orders
Criteria 5: Whether any aspect of the proceeding was improper, vexatious or unnecessary
I am dealing with Criteria 4 and 5 together. TD does not allege that orders were not complied with but TD says that some aspects of the Applicant’s conduct of the case satisfy the requirements of one or another of the above two criteria. The first was the last-minute change in the witness list of the Applicant; the second aspect was the adjournment request by the Applicant at the start of the Hearing; and the third was the request for written submissions, rather than oral submissions.
TD alleges that the last-minute change in the Applicant’s witness list, dropping two health care practitioners and calling another (Dr. Palantzas) with respect to the OCF-3 that she prepared, increased TD’s costs associated with preparing and reorganizing its case. Dr. Palantzas’ evidence was limited to the OCF-3 which she had prepared in 2013, and she was called on August 11 as the first witness after the Applicant’s evidence was completed the previous day. Therefore, any increased preparation time would show in the dockets for August 10, 2015 in the evening. In my view, given that the first day of the Hearing was a full day, the only outcome of the substitution of Dr. Palantzas was a change in the focus of the preparation done by the TD Counsel on the evening of August 10, 2015, and likely not an actual increase in time spent. I note that she was in the stand only from 10:00 am to 11:50 a.m. and that there was a break of over one hour before the first witness for TD was called. TD has not provided the dockets to confirm that it spent additional time preparing its case.
The second issue was the request for an adjournment made by Arbitration Counsel because TD had not produced its adjuster notes until the Friday before the Hearing even though they had been requested 60 days prior to the Hearing, and 30 days prior to the Hearing, TD had been requested to have the adjuster available for cross-examination. TD did not produce the notes promptly or even within 30 days, even though these are computerized. Also, TD substituted a different person for the adjuster that had been requested by the Applicant for cross-examination, one who had only been on the file for six months. Given these facts, TD cannot complain about the adjournment request or the time spent arguing about who should be produced by TD to speak to the issue of the process followed in adjusting the file. In the end, the adjuster called gave clear evidence based solely on her reading the notes and TD’s usual requirements. She could not give first-hand testimony about the adjusting of the file in the early stages and there were in fact notations in the file indicating a limit on benefits above the $3,500.00 Minor Injury Guideline limit.
Also, the adjuster called held a university degree in Economics. She testified on my inquiry concerning the Applicant’s testimony that she had been unable to concentrate and therefore could not complete the university course she had enrolled in (Economics and Statistics). The adjuster confirmed that the course was intense and the majority of the work would be reading. She testified that in such a course, one has to be able to concentrate and retain the information, something that the Applicant said she was unable to do after the accident. I found that insight useful.
The third issue was the request for written submissions rather than giving oral submissions. I do not regard the request by the Applicant’s Arbitration Counsel to be unreasonable in all the circumstances of this case.
TD sent two Counsel to the Arbitration Hearing, one a 2006 call and one a 2013 call. Both participated fully in the Hearing. When an objection was to be raised on behalf of TD, too frequently both Counsel objected on different grounds. Arbitration Counsel for the Applicant was frequently faced with both Opposing Counsel participating in submissions and objections. The issues in the case were not complex or out of the ordinary, but the defence was spirited and lengthy, appeared at times oppressive, and accomplished little. The intent may have been to distract Arbitration Counsel or to disrupt the Applicant’s case, and the effect was to lengthen the proceedings.
While TD is not claiming the 25.5 hours spent by the Junior Counsel at the Hearing, it is claiming all the preparation time as well as the costs of the Court Reporter for all of the Hearing time and also the fees for the witnesses it called.
Counsel spent 150.6 hours after the offer was made for a total time spent up to August 10, 2015 of 177.4 hours on a total claim of $18,278.18. It is correct that the Applicant sought entitlement to another $46,500 after exhausting the MIG limits, but at this stage she was claiming less than the limit. This was not, in my view, a case to spend time at a ratio of 6 hours of preparation time for 1 hour of Hearing time. It was clear from the conduct of Senior Counsel that this case was training for Junior Counsel and the Applicant should not be saddled with that. I also note that TD’s Counsel preferred to use Lawyer time to Law Clerk time and in my view, the less expensive time of a Law Clerk should be used wherever possible and where client service is not compromised by doing so.
I have calculated the amount due for fees for preparation on the basis of one hour of preparation time at the Senior Counsel’s rate of $122.78, one hour at the Junior Counsel’s rate of $109.13 and one hour at the Law Clerk’s rate of $29.36 for each of hour of Hearing time (25.5 hours). The preparation time is therefore approved at $6,662.39. In my view, this is generous. If the reduction in time for that spent by the Junior is large, I have weighted the time for the Senior more heavily than I would otherwise give and I have not made any deduction for the excessive time that TD’s Counsel took during the Hearing in its various Hearing tactics.
I agree with TD’s claim of $3,130.89 for the Hearing time, though, as I have noted above, the Hearing took more time than it should have.
TD also claims $4,209.85 for preparation of the closing submissions and $44.04 for the preparation of the Bill of Costs, the latter composed entirely of the Law Clerk’s time. TD has waived its fees for the Senior to prepare the Bill of Costs. TD is claiming 36.3 hours for preparation of the written submissions, almost 50% more hours than the Hearing took. While I recognize that written submissions can take time, the number of hours is excessive and involved Junior Lawyers other than the Junior who attended at the Hearing. There is therefore duplication of effort that should not be charged to the Applicant. I allow 8 hours at the Senior Counsel’s rate of $122.78 and 4 hours at the Junior Counsel’s rate of $109.13 hours for a total of $1,368.76.
The total for fees is therefore $11,162.04 plus HST of $558.10.
Disbursements
TD is requesting the following disbursements, inclusive of HST:
Mileage for Senior Counsel to attend the Hearing: $57.60
Process servers $363.59
Photocopies $158.97
Summons $159.00
Expert witness invoices $1700.00
Court Reporters $2291.64
Total: $4,730.80
The only reductions I will make to these claims are the claim for mileage by Senior Counsel and the claim for the Court Reporters. On the claim for mileage for Senior Counsel, the Hearing was held in Toronto and Counsel’s office is in Toronto. The Applicant should not have to reimburse a mileage charge in these circumstances. With respect to the invoices for the Court Reporters, I agree with the reasoning of Arbitrator Bujold in Saleh and State Farm Mutual Automobile Insurance Company (FSCO A12-007868) that this cost is not properly recoverable. It is not listed as an authorized expense in the Schedule to the Expense Regulation and the cost is not a generally accepted expense.
TD therefore will recover its expenses of $2,381.56, inclusive of HST. The sum of the recoverable fees, expenses and HST is therefore $14,101.70
July 4, 2016
Lynda Tanaka Arbitrator
Date
Financial Services Commission des
Commission services financiers
of Ontario de l’Ontario
Neutral Citation: 2016 ONFSCDRS 186
FSCO A14-003818
BETWEEN:
QIN NIKKI CHEN
Applicant
and
TD GENERAL INSURANCE COMPANY
Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c. I.8, as it read immediately before being amended by Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, and Ontario Regulation 664, as amended, it is ordered that:
- TD is entitled to its expenses of the Arbitration proceeding, including disbursements and HST, in the amount of $14,101.70.
July 4, 2016
Lynda Tanaka Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule - Effective September 1, 2010, Ontario Regulation 34/10, as amended.
- Insurer’s Written Submissions for Costs of the Arbitration Hearing (“Insurer’s Costs Submissions”) at Tab 2.