Neutral Citation: 2016 ONFSCDRS 268 FSCO A15-001230

BETWEEN:

CANDI COLANDREA Applicant

and

WAWANESA MUTUAL INSURANCE COMPANY Insurer

DECISION ON EXPENSES

Before: Arbitrator Isabel Stramwasser Heard: Heard by written submissions completed September 2, 2016 Appearances: Keith Finley, lawyer for Mrs. Colandrea Brenda Cuneo, lawyer for Wawanesa Mutual Insurance Company

Issues:

The Applicant, Candi Colandrea, was injured in a motor vehicle accident on September 14, 2014. She applied for statutory accident benefits from Wawanesa Mutual Insurance Company (“Wawanesa”), payable under the Schedule.¹ Disputes arose concerning her entitlement to benefits. The parties were unable to resolve their disputes through mediation and Mrs. Colandrea applied for arbitration at the Financial Services Commission of Ontario (“FSCO”) under the Insurance Act.² The arbitration hearing was scheduled for June 28 and 29, 2016, but a week before the hearing, Wawanesa advised FSCO that the parties had settled all issues in dispute, except expenses.

Consequently, the parties requested an expense hearing to take place by way of written submissions. It is settled law that an arbitrator retains jurisdiction to decide a claim for expenses even when all other issues in dispute have settled: Khoury and Zurich Insurance Company, (FSCO A97–000321, December 15, 1999), Thevasagayam and Security National Insurance Company (FSCO A05-000493, April 18, 2006), Sangaralingam and Nordic Insurance Company (FSCO A06-001980, October 23, 2007), Malik and Economical Mutual Insurance Company (FSCO A07-001978, June 26, 2009).

The issue in this hearing is:

Is a party liable to pay another party’s expenses under section 282(11) of the Insurance Act and, if so, in what amount?

Result:

Wawanesa is liable to pay Mrs. Colandrea’s expenses in respect of this arbitration proceeding, fixed in the amount of $5,850.00, inclusive of fees, taxes and disbursements.

EVIDENCE AND ANALYSIS:

Entitlement:

Subsection 282(11) of the Insurance Act provides that an arbitrator may award to the insured person or insurer all or part of the expenses incurred in respect of an arbitration proceeding, according to the criteria prescribed by the Expense Regulation,³ to the maximum set out in the regulations. (Section F and Rule 75 of the Dispute Resolution Practice Code⁴ reiterate this legislation).

I am bound by statute to consider only seven criteria in awarding expenses. I consider each, in turn:

(a) Each Party's Degree of Success in the Outcome of the Proceeding

I am unable to assess which party, if any, enjoyed a greater degree of success in the settlement. The parties did not provide evidence or submissions on the circumstances of settlement. Moreover, Wawanesa pointed out that this factor is not applicable to these proceedings because the matter settled and Mrs. Colandrea did not disagree.

I conclude that this factor is neutral in these proceedings.

(b) Any Written Offers to Settle made in Accordance with Rule 76

Wawanesa made Mrs. Colandrea a Rule 76 offer on June 24, 2016, in the amount of $2,347.00. In doing so, it conceded, at the time, that Mrs. Colandrea was entitled to some expenses. However, Wawanesa submitted at this hearing that Mrs. Colandrea was not entitled to any expenses because she refused the offer. Wawanesa did not point to case law or legislation to support this argument, nor did it give other reasons for its about-face on entitlement. Consequently, I am not persuaded that it is reasonable to deny Mrs. Colandrea her entitlement to expenses.

As a result, this factor supports an award of expenses to Mrs. Colandrea.

(c) Whether Novel Issues are Raised in the Proceeding

According to Wawanesa, there were no novel issues in this arbitration and Mrs. Colandrea did not disagree. The evidence before me at this expense hearing does not suggest otherwise.

This factor is, therefore, neutral to my consideration.

(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

I will consider factors (d) and (e) together.

The parties each made allegations about the other’s conduct, but did not support them with sufficient evidence for me to make a determination.

For example, Mrs. Colandrea argued that Wawanesa’s failure to revisit its Minor Injury Guideline (“MIG”) determination prolonged the proceedings. However, she did not support this argument with sufficient evidence for me to assess its validity.

Similarly, Wawanesa argued that Mrs. Colandrea’s refusal to talk settlement for five months prolonged the proceedings. While Wawanesa acknowledged that Mrs. Colandrea was undergoing medical assessments during those five months to support her removal from the MIG, it argued that Mrs. Colandrea could have asked Wawanesa if it had changed its MIG position during that time. Yet, Wawanesa did not disclose what its MIG position actually was during those five months. Furthermore, neither party provided detail about the medical evidence. For these reasons, I have insufficient evidence to assess the reasonableness of Mrs. Colandrea’s decision to postpone settlement discussions and, hence, whether it prolonged the proceedings.

In addition, Wawanesa argued that Mrs. Colandrea’s “accumulation of expert reports” was “entirely unnecessary” to the proceedings. It argued that the cost of those reports was “grossly disproportionate” to the value of the issues in dispute, but did not include in its valuation of the issues the removal of Mrs. Colandrea from the MIG. Taking her removal from the MIG into consideration, I do not find the cost of the reports to be “grossly disproportionate.”

Lastly, Wawanesa alleged that the Applicant used her medical reports in the tort claim. However, it did not support this allegation with evidence. Furthermore, Wawanesa did not say whether the Applicant was reimbursed for those reports in the other proceeding. In any event, this argument is irrelevant to the question of whether the reports were necessary for these arbitration proceedings. Absent evidence about the relevance of the Applicant’s expert reports to these proceedings, the insurance company’s argument that they were “entirely unnecessary” is unsubstantiated.

It follows that these factors are also neutral in this expense hearing.

(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.

(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.

I will consider factors (f) and (g) together.

While it is undisputed that Mrs. Colandrea refused to attend two insurer’s examinations, the insurer did not explain the relevance of her refusal to this expense hearing.

Wawanesa said that her refusal was “obstructionist,” but did not say how. Mrs. Colandrea stated, at the time that Wawanesa requested her attedance, that she considered the insurer’s examinations to be unwarranted or duplicative, but Wawanesa did not address this fact in its submissions. As a result, I am unable to assess whether the refusal to attend was reasonable.

Furthermore, Wawanesa did not say whether it had expended any resources as a result of Mrs. Colandrea’s failure to attend. The evidence before me does not support such a position. Rather, it suggests the opposite — that Mrs. Colandrea’s failure to attend two insurer’s examinations saved Wawanesa additional expenses in these proceedings.

While it may be the case that a failure to attend creates additional costs for an insurer in mounting a defence at arbitration, that does not appear to be the case here, where the matter settled before a hearing. The insurer did not meet the burden of proving its argument. Consequently, I am not persuaded that the bare fact of the Applicant’s refusal to attend supports an award of expenses to one party over another.

It follows that these criteria are neutral to my assessment.

Having considered the seven criteria, I conclude that Mrs. Colandrea is entitled to an award of expenses.

Quantum:

Mrs. Colandrea is seeking a total expense award in the amount of $16,931.49 broken down as $6,393.01 for fees, $9,385.00 for expert reports and $1,153.48 for the balance of disbursements.

Fees

The Applicant seeks legal fees comprising approximately 41 hours by counsel and 20 hours by law clerks. Wawanesa did not dispute the hourly rates of approximately $120.00 and $30.00, respectively.

Given that this was not a complicated case and that the majority of hearing preparation could be done by law clerks, but noting that the matter did not settle until the eve of the hearing (based on the insurer’s report to FSCO on June 22, 2016 and on the Applicant’s disbursements in relation to witnesses dating June 16 and 30, 2016), I find it reasonable to allow approximately five hours for counsel’s fees and approximately twenty hours for law clerks’ fees, for the entirety of this file. That amounts to $600.00 for the lawyer and $600.00 for the clerks.

I conclude that Mrs. Colandrea is entitled to $1,200.00 in legal fees.

Expert Reports

The Applicant is seeking compensation for three expert reports:

neurosurgeon report of Dr. Jha dated October 29, 2015 in the amount of $1,500.00
psychological re-assessment of Dr. Waxer dated June 4, 2016 in the amount of $2,825.00
neuropsychological report of Dr. Braganza dated April 7, 2016 in the amount of $5,060.00

Section 25(5)(a) of the Schedule provides the following:

(5) Despite any other provision of this Regulation, an insurer shall not pay,

(a) more than a total of $2,000 in respect of fees and expenses for conducting any one assessment or examination and for preparing reports in connection with it, whether it is conducted at the instance of the insured person or the insurer

The insurer did not make submissions on the reasonableness of paying for Dr. Jha’s report. I see no reason to deny this expense in view of the Applicant’s argument that it was necessary for proper adjustment of the file and instrumental to settling the file. I award $1,500.00 for this report.

Wawanesa funded the initial psychological assessment of Dr. Waxer dated September 23, 2015. Dr. Waxer prepared a second report shortly before the hearing in June 2016, which the Applicant is also asking the insurer to pay. Wawanesa argued that a second report by the same assessor constituted a duplication and the Applicant did not deny it. The evidence before me leads me to conclude that Dr. Waxer prepared a second report in 2016 “in connection” with the first one in 2015 as this term is defined in subsection 5(a), above. As such, the second report is not payable.

With respect to Dr. Braganza’s report, Wawanesa’s only argument against it was that it exceeded the $2,000.00 limit. Mrs. Colandrea argued that it was necessary to the arbitration and instrumental in promoting a successful resolution. I am not persuaded otherwise. Consequently, I award $2,000.00 for this report.

It follows that, in total, I award Mrs. Colandrea $3,500.00 for expert reports.

Disbursements

Wawanesa did not make any submissions about the requested amount for disbursements. I do not find them unreasonable. I allow them at 100% (rounded to the nearest ten-dollar increment).

As a result, I order Wawanesa to pay Mrs. Colandrea $1,150.00 for disbursements.

CONCLUSION:

For the preceding reasons, Mrs. Colandrea is entitled to her expenses of this arbitration in the amount of $5,850.00, inclusive of fees, disbursements and taxes.

October 12, 2016

Arbitrator Isabel Stramwasser

Date

Financial Services Commission of Ontario