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

Neutral Citation: 2016 ONFSCDRS 247

FSCO A13-011064

BETWEEN:

RICHARD DELEARY

Applicant

and

MOTOR VEHICLE ACCIDENT CLAIMS FUND

Insurer

Before: Arbitrator Kimberly Parish

Heard: By written submissions completed on July 12, 2016

Appearances: Mr. James Virtue for Mr. Richard Deleary Ms. Jennifer Chapman for Motor Vehicle Accident Claims Fund

Issues:

The Applicant, Mr. Richard Deleary, was injured in a motor vehicle accident on January 1, 2003 and sought accident benefits from Motor Vehicle Accident Claims Fund (“MVACF”) payable under the Schedule.¹ The parties were unable to resolve their disputes through Mediation, and Mr. Deleary, 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.

The issues in this Expense Hearing are:

Are the following amounts as previously agreed upon by the parties payable forthwith by MVACF: i) $476,037.97 to Siskinds LLP in trust for Richard Deleary; ii) 2% interest compounded monthly on the $476,037.97 from November 25, 2015 to the date of payment to Siskinds LLP in trust for Richard Deleary; iii) $21,479.16 for disbursements to Siskinds LLP?
Should ongoing Attendant Care and Housekeeping and Home Maintenance Benefits be paid directly to Richard Deleary?
What is the quantum of expenses to be paid respecting this proceeding?

Result:

MVACF shall pay forthwith the following amounts as directed below: i) $476,037.97 to Siskinds LLP in trust for Richard Deleary; ii) 2% interest compounded monthly on $476,037.97 from November 25, 2015 to date of payment to Siskinds LLP in trust for Richard Deleary; iii) $21,479.16 for disbursements to Siskinds LLP.
Ongoing Attendant Care and Housekeeping and Home Maintenance Benefits shall be paid directly to Richard Deleary.
MVACF shall pay forthwith $46,100.40 plus HST for fees to Siskinds LLP.

EVIDENCE AND ANALYSIS:

BACKGROUND

The Applicant’s counsel, Mr. Virtue, and the Insurer’s counsel, Ms. Chapman, resolved the issues in dispute prior to the Arbitration Hearing scheduled to commence December 1, 2015. A settlement conference was held on November 24, 2015 and the parties reached settlement of the issues in dispute for the Arbitration, with the exception of Mr. Virtue’s fees. This was conveyed to ADR Chambers through an e-mail from Ms. Chapman on November 27, 2015, which also stated the Hearing should be cancelled. MVACF agreed to pay the full disbursements requested by Siskinds LLP in the amount of $21,479.16. The parties initially tried to resolve the amount claimed for Mr. Virtue’s fees, but were unsuccessful. A Motion was brought before me to address the issue of fees claimed by Mr. Virtue and to determine if an Order is required to address amounts agreed upon by the parties at the November 24, 2015 settlement conference but which to date remain owing to the Applicant.

I issued a letter, dated December 2, 2015, to the parties which stated the parties would need to advise ADR Chambers by December 29, 2015 if they were able to resolve the issue of expenses. On December 23, 2015, Mr. Virtue advised by e-mail to ADR Chambers and Ms. Chapman that the parties were unable to resolve the issue of fees claimed by Mr. Virtue. I set up the timelines for an Expense Hearing to proceed in writing.

To date, the parties have not been able to resolve the issue regarding fees claimed by Mr. Virtue. Further, there has been no payment made by MVACF for the settlement amounts agreed upon by the parties at the settlement conference on November 24, 2015. MVACF has not paid anything towards fees and disbursements to Mr. Virtue’s office (Siskinds LLP) as identified in Mr. Virtue’s Motion Record.

The Applicant’s Submissions Respecting Payment of the Settlement

The Application for Arbitration in this case was filed by the Applicant’s counsel, Mr. Virtue, on September 3, 2013. Per the written submissions contained within the Motion Record filed by Mr. Virtue, dated May 31, 2016, the issues in dispute for Arbitration were as follows:

Attendant Care Benefits of $5,221.23 per month from October 12, 2011;
Housekeeping and Home Maintenance Benefits of $93.60 per month from September 1, 2011;
Treatment Plan in the amount of $1,476.00 for an In Home Occupational Therapy Assessment, dated July 5, 2011;
Treatment Plan in the amount of $3,266.08 for Occupational Therapy Services, dated October 17, 2011;
Treatment Plan in the amount of $10,499.61 for a power wheelchair, dated December 14, 2010;
Treatment Plan in the amount of $5,593.50 for a riding lawnmower, dated June 9, 2011;
Treatment Plan for the three month rental of a commode for $150.00, dated December 21, 2011; and
Costs of a Rebuttal Report in the amount of $640.07, dated December 19, 2011

On November 24, 2015, a settlement conference was conducted by telephone. Mr. Virtue, his law clerk, Ms. Marcia Fraser and Ms. Chapman were all present for this call. Mr. Virtue submitted that during this settlement conference, Ms. Chapman stated that MVACF agreed to pay the amount of $476,037.97 to Siskinds LLP in trust for all issues for Arbitration and interest, and in addition agreed to pay $21,479.16 inclusive of taxes for disbursements to Siskinds LLP. The amount for Mr. Virtue’s fees was not resolved.

Mr. Virtue submitted copies of written requests he had sent to Ms. Chapman on December 17, 2015, January 11, 2016 and January 22, 2016, in which he inquired when payment would be sent by the Insurer, as per the amounts agreed upon by the parties at the November 24, 2015 settlement conference. Mr. Virtue submitted a copy of an e-mail from Ms. Chapman, dated January 25, 2016, wherein she stated she had contacted the adjusting firm (ClaimsPro, on behalf of MVACF) to determine the status of the settlement cheque. The last written request was sent from Mr. Virtue’s office to Ms. Chapman on April 11, 2016, advising the cheques had not been received.

Applicant’s Submissions Relating to Fees

In his submissions for costs, Mr. Virtue is claiming 541 hours were spent on this file. The time was allocated to: applying for Mediation, attending private Mediations, ongoing follow-up and review of medical documents, settlement discussions, preparation for Arbitration and a settlement conference, following up on when the settlement funds would be provided, and preparation of his cost submissions and Motion materials. Mr. Virtue is requesting a total of $152,495.00 plus HST for fees, plus $21,279.16 for total disbursements to be paid to Siskinds LLP.

The Insurer’s Submissions Respecting Payment of the Settlement

In the Insurer’s written submissions, Ms. Chapman noted that the injuries Mr. Deleary sustained as a result of the motor vehicle accident on January 1, 2003 entitled Mr. Deleary to the catastrophic impairment designation pursuant to the provisions listed in the Schedule. Ms. Chapman further noted that Mr. Deleary had a complicated and significant pre-accident medical history.

Ms. Chapman identified that the issues in dispute for this Arbitration were:

Attendant Care
Housekeeping and Home Maintenance Benefits
Medical and Rehabilitation Benefits.

She referenced that a Special Award originally claimed by Mr. Deleary was withdrawn prior to the Hearing.

Ms. Chapman acknowledged in her submissions that all of the issues in dispute were resolved on November 24, 2015, and the details of the settlement were confirmed in an e-mail, dated November 24, 2015, from Mr. Virtue to Ms. Chapman.

Ms. Chapman submitted that Mr. Deleary had undergone an above-knee amputation of his right leg as a result of the January 1, 2003 accident. On September 6, 2011, Mr. Deleary had surgery performed in which his left leg was amputated. MVACF had a concern regarding whether the left leg amputation was causally linked to the January 1, 2003 accident. For the purposes of settlement, Ms. Chapman noted that the MVACF accepted that Mr. Deleary was a double amputee as a result of the January 1, 2003 accident.

Ms. Chapman submitted: “The settlement of this claim has become complicated by the fact that MVACF and Allstate Insurance Company have entered into an agreement in whereby they are equally responsible for Mr. Deleary’s ongoing Accident Benefit Claims.”² The vehicle which struck Mr. Deleary on January 1, 2003 was insured by Allstate Insurance Company, and it responded to the tort claim which was filed as a result of this accident. Ms. Chapman added: “It is the position of the MVACF that the settlement owing cannot be separate from the issue of costs and that a partial payment cannot be made. It is accepted that interest accumulates on the settlement amount from November 25, 2015.”³

The Insurer’s Submissions Relating to the Applicant’s Fees and Disbursements

Ms. Chapman submits that the 541 hours being claimed for fees and the rates being sought by Mr. Virtue are excessive and unreasonable.

Ms. Chapman submitted that MVACF accepts the claim put forward by Mr. Virtue that disbursements be paid to Siskinds LLP in the amount of $21,479.16.

DECISION

I will first address the Motion which requests an Order that payments be made from MVACF to the Applicant, Mr. Deleary. I will then address the fees being claimed by Mr. Virtue.

In her submissions, dated July 4, 2016, Ms. Chapman did not dispute that MVACF agreed to pay $476,037.97 to Siskinds LLP in trust for Mr. Deleary as part of the agreement made on November 24, 2015 to settle the issues in dispute. Ms. Chapman noted interest accumulates on the settlement amount from the date of November 25, 2015, and acknowledged that the all issues in dispute for this Arbitration had resolved in the Applicant’s favour prior to the Hearing (with the exception of the Special Award which was withdrawn). Ms. Chapman referenced that the payment of ongoing accident benefits had been complicated by an agreement that MVACF entered into with Allstate Insurance Company. I note the Insurer did not provide the Applicant with a determination regarding whether ongoing Attendant Care and Housekeeping and Home Maintenance Benefits will be paid directly to Mr. Deleary. I conclude these benefits should be paid directly to Mr. Deleary to ensure that these benefits are received by Mr. Deleary in a timely and efficient manner, which will serve to prevent further delays and frustration to Mr. Deleary in the future.

I am not in support of the position taken by MVACF that the settlement amount owing to Mr. Deleary could not have been made until the issue of costs was resolved. The e-mail documentation indicated that MVACF agreed to the terms of settlement reached on November 24, 2015, and that payment for the settlement amount would be forwarded to Siskinds LLP. Prior to the submissions of Ms. Chapman, dated July 4, 2016, it had not been previously mentioned that MVACF could not separate the settlement amount owing to Mr. Deleary from the issue of costs.

EXPENSES:

An Arbitrator shall, under subsection 282(11) of the Act, consider only the following criteria for the purposes of awarding all or part of the expenses incurred in respect of an Arbitration proceeding.

In considering the appropriate amount to award, the Arbitrator will consider only the criteria noted in the Expense Regulation found in Section F and Rules 75 to 78 of the Dispute Resolution Practice Code (“DRPC”). The 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.

(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.

Upon review of the criteria above, I find only criteria (a), (d), and (e) to be relevant in this matter.

Regarding the parties’ success, it was acknowledged by both parties that the Applicant was 100% successful regarding the resolution of the issues in dispute, with the exception of the Special Award which was withdrawn prior to the Hearing.

I will now address the conduct of the Insurer. I find the conduct of MVACF, through their counsel Ms. Chapman, was misleading toward the Applicant. A settlement agreement was made on November 24, 2015, and acknowledgement was made by Ms. Chapman that funds had been requested from MVACF. A timeframe was noted by Mr. Virtue’s office in which Siskinds LLP on behalf of Mr. Deleary could expect to receive these funds. Prior to Ms. Chapman’s written submissions of July 4, 2016, it was never mentioned that the settlement amount could not be separated from the costs issue and that MVACF could not issue a partial payment. The settlement amount agreed to by both parties on November 24, 2015, and further acknowledged by e-mail correspondence, has been significantly delayed in its delivery. The Applicant and Insurer agreed to cancel the Hearing scheduled to commence on December 1, 2015. When a settlement is reached between parties, the assumption is that the terms of the settlement will be executed in a reasonable amount of time. Several months have passed since November 24, 2015, and Siskinds LLP on behalf of Mr. Deleary has not received any settlement amount from MVACF. I find this has been an unnecessary and unfair delay for Mr. Deleary.

Quantum of Fees

A Hearing did not take place for this Arbitration. I acknowledge that a Hearing had been scheduled and adjourned a few times and that Mr. Virtue had to prepare for the Hearing. However, the bulk of the preparation for a Hearing was likely undertaken once. This case was complex due to the nature of the injuries sustained by Mr. Deleary as a result of the January 1, 2003 accident and Mr. Deleary’s pre-accident medical history. I accept that there would have been a significant amount of medical information that Mr. Virtue would have needed to obtain and review in preparation for any settlement discussions or a Hearing. Mr. Virtue claims 501 hours for time spent on the file, plus an additional 40 hours for his Motion. However, Mr. Virtue provided items that involved preparation and participation in the Mediation, which are not payable as part of this Arbitration. Mr. Virtue is also claiming hourly rates which exceed the published hourly amounts contained in the Legal Aid Tariff Rates. Mr. Virtue has requested $152,495.00 plus HST for his fees. I note in Mr. Virtue’s cost submissions that a detailed breakdown relating to the allocation of hours was not provided in the docket. I also note that the Insurer did not provide me with a copy of their docket or Bill of Costs, so I could compare the number of hours spent by opposing counsel to support the Insurer’s argument that the number of hours being billed by Mr. Virtue is excessive.

When determining the appropriate quantum of expenses and as determined by established case law, the objective should be to determine an amount that is fair and reasonable given the number of issues, their complexity, and the amounts in dispute.

I find a fair and reasonable amount the Applicant is entitled to for their fees is 340 hours. This is based partly upon 160 hours, as listed on the Applicant’s Bill of Costs, reflecting Mr. Virtue’s time spent on the file. The hours are to be paid at $150.00 per hour, the highest hourly rate allowed as per rule 78.1 of the DRPC.

Mr. Virtue holds over 10 years’ experience as a lawyer, and this claim involved complexities which arose over the past 13 years since the date of the accident. In addition to Mr. Virtue’s time spent on this file, another lawyer, Ms. Rasha El-Tawil, also invested time on this file. I acknowledge that there was a significant amount of time spent on this file by Mr. Virtue’s law clerks, as listed in the Applicant’s Bill of Costs. I recognize that Mr. Virtue and Ms. El-Tawil would have also invested a significant amount of time overseeing and directing the file to assist with its handling. I am therefore assessing an additional 180 hours be paid at the rate of $122.78 per hour, which is based on the Tier 2 Lawyer Rate listed in the Revised Legal Aid Tariff Rates. Thus, the amount to be awarded to the Applicant for legal fees is $46,100.40 plus HST, for a total of $52,093.45.

September 19, 2016

Kimberly Parish Arbitrator

Date