Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2016 ONFSCDRS 310

Appeal P16-00006

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Appellant

and

IRAM ANSARI Respondent

BEFORE: Richard Feldman

REPRESENTATIVES: Joanna Cox for the Appellant Supriya Sharma for the Respondent

HEARING DATE: By written submissions received by November 14, 2016

APPEAL EXPENSES ORDER

Under section 283 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 Regulation 664, R.R.O. 1990, as amended, it is ordered that:

The Respondent shall pay to the Appellant its legal expenses of this appeal, fixed in the amount of $3,000.00.

November 21, 2016

Richard Feldman Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

In a decision dated July 22, 2016, I allowed the appeal brought by State Farm Mutual Automobile Insurance Company (“State Farm”) of Arbitrator Bowles’ November 9, 2015 decision in File Number A12-004303. I found that the Arbitrator had made errors in law in deciding the issue of Mrs. Ansari’s entitlement to a special award under s. 282(10) of the Insurance Act. Accordingly, I returned the issue of entitlement to and, depending on that determination, the amount of a special award to arbitration for redetermination before a different arbitrator.

State Farm was successful on this appeal. It now seeks its legal expenses of this appeal.

II. SUBMISSIONS OF PARTIES

The parties’ written submissions on the issue of appeal expenses were received by November 14, 2016.

The Appellant seeks total expenses of about $8,260 (inclusive of HST). This is made up of legal fees of about $7,900 (based on about 65 hours of legal services) and disbursements of about $360. Of the criteria that can be considered under the Expense Regulation as grounds for an award of expenses, the Appellant relies upon: (1) its ultimate success on this appeal; and (2) conduct on the part of the Respondent that was either improper or that tended to prolong or obstruct the proceeding.¹

The Appellant also seeks (at p. 8 of the written submissions dated September 22, 2016) an order that the Respondent “repay the $13,000.00 Special Award to State Farm”. Such relief was never previously claimed in this appeal by the Appellant and I find that this issue is not properly before me as part of this expense hearing. This decision will be restricted to the issue of the expenses of this appeal.

The Respondent opposes any award of expenses to the Appellant. Counsel for the Respondent denies that the Respondent’s submissions were too lengthy and argues that the Respondent should not be penalized as a result of her counsel seeking to vigorously protect her interests. It is also pointed out that the Respondent was successful in having the Appellant’s request for a stay denied and that this should be taken into account in making any determination of expenses.

The Respondent argues that the amounts claimed by the Appellant are excessive given the nature of this appeal. While the Respondent does not specifically challenge any of the disbursements claimed by the Appellant, the Respondent does challenge both the number of hours of legal services claimed by the Appellant and the hourly rates² for those services. Finally, the Respondent urges that the issue of the expenses of this appeal ought to be left to the hearing arbitrator who will decide the Respondent’s claim for a special award.

III. ANALYSIS

I reject the Respondent’s submission that the expenses of this appeal ought to be left to the hearing arbitrator. While the hearing arbitrator can decide the issue of expenses related to the arbitration proceeding, it falls upon me to decide the issue of expenses related to this appeal.

In Bains and RBC,³ Delegate Blackman conducted a review of appeal expense decisions at FSCO and found that, in most cases, expenses awarded to successful insurers on appeals fell in the range of $1,000 to $5,700, with an average expense award of about $2,800.⁴

The current appeal was decided based upon the record (i.e., documentary evidence from the original arbitration file and written submissions from the parties). It was not a particularly complex matter. I therefore find the amount of time claimed on behalf of the Appellant (about 65 hours) to be excessive. This is especially so when one considers that a portion of those expenses relate to the preliminary issue hearing (the Appellant’s request for a stay), on which the Respondent was the successful party.

Nevertheless, State Farm was ultimately successful on its appeal and is entitled to its reasonable expenses of this appeal proceeding. A line-by-line analysis of the expenses claimed is neither required nor appropriate. Rather, a global assessment of reasonable expenses should be made. This requires the exercise of discretion, based upon my experience at FSCO and upon the nature of this proceeding.

IV. CONCLUSION

Having considered the degree of success of each party, the nature of the issues raised in this appeal hearing, the manner in which it was conducted, the relative simplicity of the matter, the reasonable amount of time spent by the Appellant’s legal representatives in preparing written submissions and in responding to those of the Respondent, the permissible hourly rates that can be charged under the Expense Regulation and the type and amount of disbursements claimed, I find that the Appellant is entitled to its expenses, fixed in the amount of $3,000.00 (inclusive of all fees, disbursements and any applicable taxes).