Laavanyan Sangaralingam v. TD General Insurance Company, 2016 ONFSCDRS 259

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2016 ONFSCDRS 259

FSCO A11-002571

BETWEEN:

LAAVANYAN SANGARALINGAM

Applicant

and

TD GENERAL INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before: Richard Quan

Heard: Written submissions received by May 19, 2016

Appearances: David S. Wilson for Mr. Sangaralingam

Jonathan Barr for TD General Insurance Company

Background:

The Applicant, Laavanyan Sangaralingam, was injured in a motor vehicle accident on June 15, 2007 and sought accident benefits from TD General Insurance Company, ("TD"). In a decision dated February 4, 2016, later to be amended on February 16, 2016, Arbitrator Isoken Osunde dealt with certain claims for medical benefits under the Schedule.¹ Following a hearing that took place at the Offices of the Financial Services Commission of Ontario on February 18, 19, 20, and June 11, 2015, and by way of written submissions that concluded on November 17, 2015, Arbitrator Osunde issued an order that found in favour of the Applicant for four treatment and assessment plans that were claimed; held against the Applicant on two treatment and

assessment plans and on his claim for a special award; and reserved decision on the issue of expenses.²

The parties were unable to reach agreement on the matter of expenses and, at the request of the Applicant, I am seized in the matter to determine the issue.

Issue:

The issue in this further hearing is:

Is Mr. Sangaralingam entitled to his expenses incurred in respect of this arbitration hearing?

Result:

Mr. Sangaralingam is entitled to his expenses of the arbitration proceeding in the amount of $21,257.00 inclusive of fees, disbursements and H.S.T.

EVIDENCE AND ANALYSIS:

Entitlement to Expenses:

Subsection 282(11) of the Insurance Act³ gives arbitrators the discretion to award expenses to parties at a hearing, according to criteria prescribed by the regulations. Subsection 12(2) of O. Reg. 664, (the Expense Regulation), prescribes the awarding of expenses in respect of an arbitration proceeding.⁴

In describing what an Arbitrator shall consider, the subsection provides as follows:

An arbitrator shall, under subsection 282 (11) of the Act⁵, 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 made in accordance with subsection (3).
Whether novel issues are raised in the proceeding.
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.
Whether any aspect of the proceeding was improper, vexatious or unnecessary.
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.
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.

I have reviewed the criteria for awarding expenses and I have considered the submissions of the parties and having done so, I find that the only ones relevant to this case are Items 1 (Degree of Success) and 3 (Novel Issues Raised).

Each party derived some success at the hearing. The Applicant sought payment for six treatment and assessment plans: two for occupational therapy services, one for case management services, one for speech therapy services, one for rehab coaching and a gym membership, and one for the cost of a catastrophic assessment. The Applicant also sought interest on overdue payments owing on these services and made a claim for a special award.

Arbitrator Osunde denied one of the treatment plans for occupational therapy services finding it to be similar to the other one that was claimed. Arbitrator Osunde dismissed the treatment plan for case management services in accepting TD’s submission that the insured person would only be eligible for the benefit if he has sustained a catastrophic impairment as a result of the motor vehicle accident. Arbitrator Osunde did not find evidence to make a special award.

Of the eight disputed issues, the Applicant has been successful on five of them. Accordingly, I find that the Applicant is entitled to his reasonable expenses of the arbitration. The quantum of the expenses however will be reduced owing to TD’s degree of success in the proceedings.

Upon holding that the Applicant is entitled to his expenses, I do not find it necessary to consider, at this juncture, the criterion of whether novel issues were raised during the hearing. Such a discussion, however, is relevant when considering the quantum of fees to be awarded.

Quantum of Expenses

Fees:

The amount of expenses to be awarded must be fair and reasonable in the circumstances taking into account, among other things, the nature of the proceedings, the complexity and number of issues, and the amounts in dispute.

It has been suggested in some prior decisions that a pragmatic, broad-stroke approach (rather than a line-by-line assessment) is frequently favoured using a ratio in the general range of 1:1 to 4:1 for pre-hearing preparation time to hearing time.⁶

In the instant case, I see no reason to depart from this approach. For the following reasons, I find that a ratio of 2:1 is appropriate.

The Applicant presented the Bill of Costs for work completed by his representative, Mr. David Wilson, as part of his written submissions. The Applicant seeks expenses for 158.3 hours of legal services at a rate of $150.00 per hour broken down as follows:

Four days of hearing time - 33.75 hours
Preparation for hearing - 94.6 hours
Preparation of submissions following hearing - 28.95 hours
Review of decision and preparation of account - 1 hour⁷

Total sought: $23,745 plus $3,086.85 H.S.T. = 26,831.85

The Applicant has applied a ratio of 2.8:1 for preparation time to hearing time. In support of this ratio and in opposing any reduction to the legal fees, the Applicant makes the following submissions:

That the case involved a novel fact situation complicated by a prior motor vehicle accident which called upon arguments relating to the issue of causation;
That given the cost of running a law practice and by virtue of Mr. Wilson’s extensive legal experience, the fees should not be reduced from the claimed amount;
That less preparation time was spent on behalf of the Applicant for and less consideration was given by the hearing Arbitrator on those issues for which the ruling was not in his favour.

In terms of the complexity of this case, I am inclined to agree with TD in its overall assessment of the proceedings. TD asserts:

“It is not novel or complex for an arbitrator to adjudicate a matter where the applicant has a pre-existing condition or where causation is an issue. There is a plethora of case law from FSCO and appellate courts on these issues. The law on causation is settled. This case was no more complex, than any other case that arbitrators routinely decide.”⁸

From my review of the Hearing Arbitrator’s decision, this case does not involve an expert witness; there does not appear to be any novel arguments made by the parties; and though a prior accident and the matter of causation does complicate the scope of the discussion, it seems to have been accommodated by a lengthier hearing and related preparation time.

In terms of the costs associated with running a law practice, and with due respect for Mr. Wilson’s venerable legal experience, Rule 78.1 of the Practice Code sets out the maximum permissible billable rate.⁹ Any consideration of compensating for legal experience in adjusting the amount of fees to be awarded would seem to be contrary to the conditions set out in this Rule.

As for the degree of preparation time spent for and to the extent that the Hearing Arbitrator deliberated on those issues for which the Applicant did not find success, I find that these are considerations beyond the scope of this decision. Suffice it to say though that there are instances when each issue cannot be taken in isolation. I can safely assume that the evidence and submissions made for the treatment plans relating to occupational therapy services would have relevance as much for one as to the other.

TD disputes the Applicant’s calculation of hearing time. TD submits that the total hearing time was 33 hours and not 33.75 hours as put forward by the Applicant. In addition, TD disputes the Applicant’s allocation of correspondence time. TD submits that it, “would be unreasonable to require the insurer to pay for 57 hours of correspondence without knowing the substance and subject matter of that correspondence.”¹⁰

The Applicant submits in its Bill of Costs that there have been 285 letters. Using a ratio of 0.2 per letter, this amounts to 57 hours of preparation time. In response to TD’s assertion that additional details need to be provided, the Applicant cites the decision in Hutchinson and Security National where the Arbitrator held that it was, “Inappropriate … to seek to attack the reasonableness of … dockets without being prepared to make similar disclosure.”¹¹ The Arbitrator in Hutchinson also accepted the ratio of .02 per piece of correspondence.

An award of expenses must be reasonable. For these reasons, I find that a 2:1 ratio of preparation time and hearing time is appropriate. Given TD’s degree of success in the proceeding, I find that it would be reasonable to use 33 hours as the length of the hearing. Finally, I am willing to accept the ratio of 0.2 per letter; however, I feel that 285 pieces of correspondence is excessive. I therefore will use 200 pieces of correspondence for a total of 40 hours of preparation time.

In conclusion, I have arrived at the accounting of fees as follows:

Four days of hearing: 33 hours;
Hours of preparation time: 66 hours less 17 hours of correspondence = 49 hours;
Preparation time post hearing: 28.95 hours;
Review of decision and preparation of account: 1 hour.

Total: 111.95 hours.

Total fees: 111.95 @ $150 per hour = $16,792.50 plus $2,183.03 H.S.T.= $18,975.53

Disbursements:

The Applicant has claimed disbursements in the amount of $2,409.22 plus $300.20 H.S.T. Of the items listed in the Applicant's Bill of Costs, TD objects to the photocopying amount of $1,170.66; the conduct money paid to Alison Cocking of $53.00; and the cost of the report of Michelle Cohen & Associates, Speech Pathologists, in the amount of $247.50.

With respect to the conduct money and report fee, I am satisfied with the explanations provided in the Applicant’s Reply to Response Submissions.¹² I find, however, that the amount for photocopying is excessive. I find that what would be reasonable is 2/3 of the billed amount or $780.44.

In terms of disbursements, I am satisfied with the amount of $2,019 plus $262.47 in H.S.T. for a total of $2,281.47.

Conclusion

Having considered the applicable criteria in the Expense Regulation, as well as the Applicant’s Bill of Costs in relation to the degree of success enjoyed by the parties, the complexity of this matter, and the permissible items and maximum amounts provided for in the Schedule to the Expense Regulation, I find that Mr. Sangaralingam is entitled to his expenses of the arbitration proceeding, fixed in the amount of $18,975.53 for fees and $2,281.47 for disbursements, for a total amount of $21,257.00 inclusive of H.S.T.

September 28, 2016

Richard Quan

Date

Arbitrator