Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2016 ONFSCDRS 84

Appeal P15-00068

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Appellant

and

THOMAS WALDOCK Respondent

BEFORE: Delegate Lawrence Blackman

REPRESENTATIVES: Mr. T.F. Bond and Mr. E.A.F. Grigg for the Appellant, State Farm Mutual Automobile Insurance Company Mr. L.H. Kunka and Mr. C. Spano for the Respondent, Mr. Thomas Waldock

HEARING DATE: March 14, 2016 (Oral decision delivered March 14, 2016)

PRELIMINARY ISSUES APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

Paragraphs 1, 2 and 4 of Arbitrator Henry’s November 16, 2015 Order are stayed.
Paragraph 3 of the Arbitrator’s November 16, 2015 Order is stayed to the amount of $109,189.25. The Appellant shall forthwith pay the Respondent the balance of $62,070.27 in arbitration legal expenses.
The Respondent’s motion and the Appellant’s cross-motion are dismissed.
The Respondent shall forthwith pay the Appellant its legal expenses of this preliminary issues appeal order assessed in the amount of $2,500, inclusive of HST.

March 18, 2016

Lawrence Blackman Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL AND BACKGROUND

The Respondent, Mr. Thomas Waldock, was injured in a March 25, 2008 motor vehicle accident. He applied to his first-party automobile insurer, the Appellant, State Farm Mutual Automobile Insurance Company, for statutory accident benefits available under the 1996 Schedule.¹

In his November 10, 2014 “Decision on a Preliminary Issue,” Arbitrator Henry of ADR Chambers (the “Arbitrator”) found the Respondent’s injuries catastrophic within the meaning of paragraphs 2(1.2)(f) and (g) of the 1996 Schedule. The Arbitrator deferred the question of the parties’ respective entitlement “to their expenses” to the arbitrator hearing the matter.

The Arbitrator subsequently issued a November 16, 2015 “Decision on Expenses.” Contrary to the Arbitrator’s statement that his November 10, 2014 decision was upheld on appeal, Delegate Evans’ March 9, 2015 letter confirmed the appeal was withdrawn, on consent, under Rule 70.2 of the Dispute Resolution Practice Code (Fourth Edition, Updated – January 2014) (the “Code”).

The Arbitrator’s November 16, 2015 decision further stated:

At the end of the first day of oral submissions, it was apparent that the balance of the Hearing could be conducted by written submissions from the parties, who consented to this arrangement. I made an oral order on June 25, 2015 setting out timelines for the submissions. I confirmed those directions in an email to both counsel on July 3, 2015.

The Arbitrator’s July 3, 2015 e-mail set a time line for written submissions on “the expenses claimed by the Applicant (Waldock)” and, “Regarding the issue of catastrophic impairment,” “where the Insurance Act requires that an application for a Special Award must be filed as a part of the application for arbitration.” The Arbitrator limited the submissions “to a maximum of three (3) pages (excluding any case law quotations), 12 point type.”

The Arbitrator’s November 16, 2015 decision stated that neither party had pointed him to any provision, nor was he aware of any, that prohibited an applicant from seeking a special award when that claim was not set out in the application form.

The Arbitrator’s November 16, 2015 decision further held:

The Appellant was entitled to payment of $361,520.30 for Attendant Care and Housekeeping and Home Maintenance Benefits, commencing July 7, 2010.

The Arbitrator gave no reasons for this award. He did not mention any evidence or submissions regarding entitlement to this award of statutory accident benefits. There is no allegation that this was a consent order.

The Arbitrator ignored, for the purposes of his benefits payment order, paragraph 6 of the Respondent’s July 8, 2015 written arbitration submissions (following the Arbitrator’s July 3, 2015 e-mail) that the Appellant had already paid $298,353.52 of his $334,991.09 claim for attendant care benefits and had paid his entire $23,000 housekeeping claim, and that only $63,471.05, including interest, was still owing.

The Appellant was entitled to interest in respect of his overdue benefits, calculated at 2% per month, compounded monthly, commencing July 7, 2010.
The Respondent’s Arbitration Bill of Costs set out three different hourly rates: the legal aid rate under Rule 78 of the Code (for a total amount of $20,925.25), the maximum $150 an hour rate under Rule 78 for insureds’ counsel (for a total of $33,450) and a “substantial indemnity rate,” with hourly rates up to $750 an hour (for a total of $125,435). The Arbitrator allowed $125,435.

Subsection 5(5) of the Schedule to R.R.O. 1990, Regulation 664 under the Insurance Act, as amended, sets a maximum of $1,500 for preparation of an expert report. The Arbitrator allowed the Respondent’s full disbursement claim of $45,824.52, including $2,500, $4,225 and $13,000 for individual expert reports set out in the Respondent’s Bill of Costs.

The Arbitrator stated that the Appellant did not raise any persuasive objections to any of the amounts claimed (totalling $171,259.52), which he held were reasonable and “conform to the criteria set out in the Regulation.”

The Appellant was entitled to a Special Award of $108,456.09, plus interest at 2% per month, compounded monthly, commencing July 7, 2010, the date the benefits first became payable under the Schedule.

The Arbitrator stated he had allowed the Appellant an opportunity to present its case fully and fairly in written submissions. He noted the Appellant’s reliance on a report that failed to follow accepted guidelines. The Arbitrator found the report, being untested by cross-examination, less credible than the Respondent’s evidence. He found the Appellant’s payment of a significant portion of past benefits to be a mitigating factor.

The December 11, 2015 Notice of Appeal submits, in part, that the Arbitrator never put the parties on notice that he would be addressing overdue benefits, interest or the substantive aspects of entitlement to and the quantum of a special award, and that he made these awards without hearing any evidence or receiving any submissions. The Appellant further submits that the Arbitrator awarded legal expenses beyond what is allowed.

That Notice of Appeal sought a stay of the Arbitrator’s November 16, 2015 Order. It did not set out the grounds for a stay. The Appellant subsequent delivered a January 8, 2016 amended Notice of Appeal that did address the grounds for a stay.

The Respondent argues that the Appellant is restricted to its initial Notice of Appeal. His motion dated February 19, 2016 sought an order that the Appellant was estopped from disputing the Arbitrator’s orders, as well as orders rejecting the Appellant’s requested stay and striking out 69 of the 70 paragraphs of the Appellant’s reply submissions. Succinctly, the Respondent argues the Appellant is estopped from, essentially, proceeding with this appeal because:

(1) It failed to appeal or proceed with an appeal of the Arbitrator’s November 10, 2014 decision.

(2) It failed to provide submissions on the Respondent’s claims at the appropriate times.

(3) The Arbitrator had already determined entitlement to a special award.

(4) The Arbitrator has, effectively, already heard the appeal from his own decision.

(5) The Appellant agreed to the procedure suggested by the Arbitrator.

The Response to Appeal submits “the Appellant was provided with an extraordinary level of procedural fairness when given an opportunity to respond to issues which it had neither responded to in its original submissions nor raised in its original Appeal of the Decision on a Preliminary Issue.”

The Appellant brings a cross-motion dated February 26, 2016 under cover of letter dated March 1, 2016 delivered to the arbitration unit March 7, 2016 and received by this appeals office on March 10, 2016. The Appellant seeks to strike out part of the Respondent’s affidavit material.

II. ANALYSIS

As the Appellant states at paragraph 65 of its submissions to the Respondent’s motion, its Amended Notice of Appeal was served before the Response to Appeal was delivered. Following his eighteen-page Response to Appeal, the Respondent brought a motion, with supporting material, to have this appeal essentially rejected at this time. An opportunity for oral submissions was provided to both parties, in addition to the written submissions filed. Both parties agreed to the suggested sequence and time line for these oral submissions.

Rule 1.1 of the Code provides that these Rules will be broadly interpreted to produce the most just, quickest and least expensive resolution of the dispute. Rule 81 permits an adjudicator, on such terms as are considered just, to set aside any time limit for doing any act, serving any notice and filing any document, and/or decide that any Rule does not apply in respect of a proceeding.

I find the most just, quickest and least expensive resolution of these preliminary issues is to decline to descend into a contest for strategic advantage advanced by both parties. Rather, I exercise my discretion to allow in all of the documentation delivered, on the condition that it may be considered as a factor under Rule 75.2(d) of the Code in determining legal expenses.

Other than losing a strategic advantage, I see no prejudice to the Respondent in receiving the Amended Notice of Appeal. I am not striking out the Appellant’s submissions or portions of the affidavit evidence in support. Nor am I striking out any of the Respondent’s submissions or supporting material.

For the Respondent to succeed on his motion is to effectively reject this appeal at this initial stage. I find that this appeal raises substantive and substantial questions of law, including that of procedural fairness, as set out below. I am not persuaded the Notice of Appeal is incomplete or lacks sufficient details to allow the other party to respond. I am not persuaded to essentially reject or limit this appeal as requested by the Appellant on any of the grounds provided in Rule 51.2 of the Code. I am not persuaded to essentially reject or limit this Notice of Appeal as requested by the Respondent on any of the further grounds argued.

Subsection 283(6) of the Insurance Act, R.S.O. 1990, c.I.8, provides that an appeal does not stay the order of the arbitrator, unless decided otherwise. As the Respondent submitted, the onus is on the moving party to establish that the extraordinary remedy of a stay. In Guardian Insurance Company of Canada and Armstrong, (FSCO P00-00037, July 20, 2000), Delegate McMahon adopted the following criteria in determining whether to grant a stay:

The bona fides of the appeal;
The substance of the grounds for appeal; and,
The hardship to the respective parties if the stay is granted or refused.

I am not persuaded that the Respondent lacks sufficient details to respond to the Appellant’s request for a stay or has been denied an opportunity to reasonably respond to the Appellant’s submissions. I find by far the most important criterion in determining whether to stay any part of the Arbitrator’s November 16, 2015 Order is the substance of the grounds of appeal, which ground also addresses the bona fides of this appeal and the respective hardship to the parties.

I will address the Arbitrator’s Orders in turn.

1. Attendant Care and Housekeeping/Home Maintenance Benefits of $361,520.30

The January 4, 2013 Report of Mediator from ADR Chambers notes the issues in dispute in this matter as “Other Disputes” and interest. The Mediator did not tick off the boxes beside Attendant Care Benefits or Housekeeping and Home Maintenance Benefits as issues in dispute.

The Commission received the Application for Arbitration February 5, 2013. The Respondent did not tick off the boxes for Attendant Care Benefits or Housekeeping and Home Maintenance Benefits as issues in dispute. Rather, he sought a declaration that he had sustained a catastrophic impairment “which in turn would entitle him to the maximum limits under the S.A.B.S. (medical benefits, rehabilitation benefits, attendant care benefits and housekeeping/home maintenance benefits), as well as case management services” [emphasis added].

As the Ontario Court of Appeal stated in Liu v. 1226071 Inc. (Canadian Zhorong Trading Ltd.), 2009 ONCA 571, “simply meeting the statutory definition [of catastrophic impairment] does not automatically mean entitlement [to payment of benefits under the Schedule] It will still remain for claimants to prove their damages as the appellant did at trial.”

Rule 33.1(a) of the Code states that one of the purposes of an arbitration pre-hearing discussion is to identify and obtain agreement as to the issues for arbitration. Arbitrator Bowles did not note attendant care, housekeeping or a special award as issues. Rather, his September 26, 2013 pre-hearing letter, in setting a four-day hearing for May 2014, states that the issues in dispute were identified and agreed to as follows:

Did the Appellant suffer “an impairment as a result of the accident within the meaning of the Regulations?”
The parties’ expenses in respect of the arbitration.
Interest for the overdue payment of benefits.

Arbitrator Bowles’ April 28, 2014 pre-hearing decision denied the Appellant’s request for a section 44 insurer’s medical examination and a stay of the scheduled arbitration hearing.

The Arbitrator’s November 10, 2014 Preliminary Issue arbitration decision did not issue an order on attendant care benefits, housekeeping benefits or entitlement to or the quantum of a special award. Under subsection 283(1) of the Insurance Act, a party may appeal the order of an arbitrator on a question of law. One does not appeal reasons. I do not agree with the Appellant’s submission that a party may appeal the other party’s arguments in the absence of any order on the issue in question.

I agree with paragraph 55 of the Appellant’s reply submissions that there can be no appeal from an issue that has yet to be decided. I agree with paragraph 59 of the Appellant’s reply that an adjudicator cannot sit in appeal of his or her own decision.

The Respondent’s January 13, 2015 e-mail (at Tab 5 of the Respondent’s Response to Appeal) states he would be submitting to the Appellant a claim for past expenses and benefits that were not paid and for interest on those claims. The Respondent’s January 28, 2016 Application for Arbitration sought attendant care benefits ongoing from May 24, 2015, plus interest thereon.

Section 6 of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, as amended, provides that the parties to a proceeding shall be given reasonable notice of the hearing by the tribunal. ADR Chambers e-mailed the parties March 27, 2015 (Tab “B” to Mr. Gregg’s March 2, 2016 affidavit) that the “Expense Hearing” in this arbitration had been booked for June 25, 2015.

The Respondent submits, at paragraph 17 of his Response to Appeal, that the “Hearing on Expenses and State Farm’s motion to strike the request for a Special Award was scheduled to be heard on June 25, 2015 before Arbitrator Knox Henry.”

I am persuaded, for the purposes of these preliminary appeal procedural issues, that neither the Arbitrator nor any other person at ADR Chambers gave notice that the Respondent’s entitlement to attendant care and housekeeping benefits was to be determined by the Arbitrator in the decision under appeal. This is entirely consistent with the Appellant not providing, as the Respondent strenuously argues, any argument on the attendant care and housekeeping benefits claims either at the June 25, 2015 oral hearing or in its written submissions.

I am not persuaded by paragraph 2 of the Respondent’s March 10, 2016 submissions that the Arbitrator’s July 3, 2015 e-mail setting a time line for written submissions “on the expenses claimed by the Applicant (Waldock)” meant $361,520.30 for attendant care and housekeeping and home maintenance benefits, plus interest. I am not persuaded by the Respondent’s intimation that the Arbitrator could remedy any misunderstanding in July 3, 2015 e-mail in what he meant by “expenses” by clarifying that, after submissions had been completed, in his November 16, 2015 decision awarding $361,520.30 for benefits, plus interest.

Subsection 283(1) of the Insurance Act restricts appeals from the order of an arbitrator to questions of law. As stated by the Appellant at paragraph 67 of its reply submissions, Delegate Makepeace stated in Howard and State Farm Mutual Automobile Insurance Company, (FSCO P04-00017, November 19, 2004), that questions of law include questions about fair procedure.

The Appellant, at paragraph 11 of its reply submissions, cites Ontario (Provincial Police) v. Mosher, 2015 ONCA 722, that the principle of audi alteram partem consists, first, of the right to be heard by the decision-maker and, arising out of that right, the right to notice of the hearing sufficient in time and substance to enable the party to present his or her case on the issues to be decided.

The Appellant also cites Cardinal v. Director of Kent Institution, 1985 CanLII 23 (SCC):

… the denial of a right to a fair hearing must always render a decision invalid, whether or not it may appear to a reviewing court that the hearing would likely have resulted in a different decision. The right to a fair hearing must be regarded as an independent, unqualified right which finds its essential justification in the sense of procedural justice which any person affected by an administrative decision is entitled to have. It is not for a court to deny that right and sense of justice on the basis of speculation as to what the result might have been had there been a hearing.

In any event, the Appellant, by affidavit evidence, attests that following the Arbitrator’s November 10, 2014 Order, it paid the Respondent $298,353.52 (on March 6, 2015) in attendant care benefits (plus $191,247.35 in interest) and $30,200 in housekeeping benefits (plus $14,906.17 in interest).

The Respondent conceded, before the Arbitrator, at paragraph 6 of his July 8, 2015 arbitration factum that the Appellant had already paid $321,353.52 in attendant care and housekeeping benefits, plus $206,153.52 in interest, with only $63,471.05, inclusive of interest, still owing.

The Respondent’s March 10, 2016 affidavit on appeal, at paragraph 9, reiterated that “Prior to the expense hearing on June 25, 2015, State Farm had paid a total of $336,961.33 toward the retroactive claims submitted by Mr. Waldock” and “$206,153.52 on account of the interest owed” [emphasis added]. The Respondent submits that $63,471.05 was still owed for benefits and interest.

Exercising my discretion under subsection 283(6) of the Insurance Act, I am persuaded, on the basis of the strong substance of the argued error of law (in addition to there being no arguable hardship to the Respondent in not having some $300,000 in benefits paid a second time) to stay the Arbitrator’s award of $361,520.30 for attendant care and housekeeping benefits.

2. Interest on Overdue Benefits

For the same reasons, exercising my discretion under subsection 283(6) of the Insurance Act, I am also persuaded, based on the strong substance of the argued error of law and on the criteria of relative hardship and the bona fides of the appeal, to stay the Arbitrator’s interest award.

3. Special Award of $108,456.09, plus interest

The Appellant brought a motion returnable June 25, 2015 before the Arbitrator to strike the Appellant’s claim for a special award. The Respondent, at paragraphs 4 and 5 of his June 24, 2015 arbitration factum, states that neither party made any argument regarding the special award during the arbitration itself leading to the Arbitrator’s November 10, 2014 decision and that the Arbitrator did not address the special award within that decision.

The Respondent’s July 8, 2015 Supplementary Factum at arbitration, following oral submissions on June 25, 2015, includes, at Tab 7, his counsel’s June 30, 2015 e-mail to the Appellant:

It seemed to me that Arbitrator Henry was sending a fairly clear message that he wanted to hear or receive further evidence from the adjuster who was handling the claim when the decision regarding the CAT was made … if you are prepared to agree, I am content to agree that the Arbitration be reconvened for the purpose of calling the evidence of the adjuster who was handling the file at the time of the CAT assessments.

The Respondent’s July 8, 2015 Arbitration Supplementary Factum, at paragraph 10, states:

The Applicant agrees that if the Learned Arbitrator is prepared to hear further evidence regarding the special award, the Applicant should be entitled to cross-examine the adjuster from State Farm, and potentially State Farm supervisors … [Emphasis added]

The Respondent’s March 10, 2016 appeal submissions, at paragraph 8, state:

The emails of counsel for Mr. Waldock relate to potential further evidence which should or should to assist [sic] the Learned Arbitrator in setting the amount of the Special Award. These emails do not relate to whether the Special Award could be granted after the close of the Preliminary Issue Hearing.

Submissions are not evidence. I am persuaded, for the purposes of these preliminary appeal issues, that the statements of counsel for the Respondent are consistent with a two-step arbitration process. The first step was the Appellant’s motion to strike the Appellant’s request for a Special Award. The second step, if the Appellant was unsuccessful on its motion, was for a subsequent determination of entitlement to and, if so found, the quantum of a special award.

I am persuaded, for the purposes of these preliminary appeal issues, that neither the Arbitrator nor anyone else at ADR Chambers gave notice that the Arbitrator was going to determine in his decision issued November 16, 2015, in addition to whether the Respondent could proceed with his claim for a special award, the further questions of entitlement to and the quantum of a special award. This is consistent with the Respondent’s strenuous argument that the Appellant provided no submissions arguing against his $180,260.15 claimed special award (based on 50% of $361,520.30 in submitted expenses, payment of which the Respondent argued was delayed but conceded had been largely been paid).

I am not persuaded that this appeal should be essentially rejected on the basis the Appellant failed to present its arguments on issues I am persuaded, for the purposes of this preliminary decision, no notice was given they were going to be presently determined by the Arbitrator.

Under section 46 of the 1996 Schedule, interest is payable on overdue benefits. The Respondent argues, at paragraph 57 of his Response to Appeal, that a special award is not a benefit. Accordingly, one further queries the basis upon which the Arbitrator ordered interest on a special award under the 1996 Schedule at 2% per month, compounded monthly, from the July 7, 2010 date the benefits (not the special award) first became payable

I am not persuaded as to the strength of the substance of any appeal that the Arbitrator erred in law in finding that the Respondent could proceed with his claim for a special award.

However, exercising my discretion under subsection 283(6) of the Insurance Act, I am persuaded, on the basis of the strong substance of the argued error of law of procedural unfairness, to stay the Arbitrator’s order determining actual entitlement to and the quantum of $108,456.09 for a Special Award, plus interest.

4. Legal Expenses of $171,259.52

As noted above, the Arbitrator’s November 16, 2015 decision stated that the amounts set out in the Appellant’s Bill of Costs “conform to the criteria set out in the Regulation.”

As noted, Rule 78 of the Code sets a maximum rate of $150 an hour for insureds’ counsel. Subsection 5(5) of the Schedule to Regulation 664 sets a maximum of $1,500 for preparation of an expert report.

The Arbitrator allowed hourly rates from $225 to $750 an hour. The Arbitrator allowed amounts higher than $1,500 for an expert report. Neither “conforms to the criteria set out in the Regulation.”

The parties filed competing affidavits as to what was or was not argued at arbitration. The Arbitrator does not say that Appellant failed to object at all to the Respondent’s claim for legal expenses. He says that the Appellant failed to raise any persuasive objections.

The Arbitrator awarded the Appellant $125,435 for counsel time. I find $33,450 (based on $150 an hour) is payable forthwith. The parties did not address the Arbitrator’s apparent failure to award HST on the counsel rate. Exercising my discretion under subsection 283(6) of the Insurance Act, I am persuaded, on the basis of the strong substance of the Appellant’s argued error of law, to stay the Arbitrator’s additional award of $91,985 for counsel time.

The Arbitrator allowed $2,500, $4,225 and $13,000 for three expert reports. This totals $19,725. Subsection 5(5) of the Schedule to Regulation 664 allows a maximum $4,500 for three reports.

I am persuaded, on the basis of the strong substance of the Appellant’s argued error of law, to stay the difference of $15,225. Pursuant to Rule 65.5 of the Code, I correct my oral order that had an error of calculation or technical error. The further sum of $1,979.25, representing HST on $15,225, is also stayed. I am not persuaded to stay payment of any other disbursements on the basis of less obvious argued errors of law. The balance of $28,620.27 in disbursements is payable forthwith.

Accordingly, I am staying payment of $109,189.25 of the Arbitrator’s expense award. The balance of $62,070.27 is payable forthwith.

III. WRITTEN APPEAL SUBMISSIONS

Amending, by extending the time lines under Rule 54 of the Code for the written submissions of both parties, as allowed by Rule 81, I set the following time line for the exchange of written submissions on the substantive appeal:

The Appellant shall, by Friday, May 6, 2016, serve the Respondent and file (with a Statement of Service in Form F) with this office its written submissions.
The Respondent shall, by Friday, June 24, 2016, serve the Appellant and file (with a Statement of Service) with this office his responding written submissions.
The Appellant shall, by Friday, July 15, 2016, serve the Respondent and file (with a Statement of Service in Form F) with this office its written reply submissions.

IV. APPEAL LEGAL EXPENSES

For these preliminary appeal matters, the Respondent puts forward three accounts at different hourly rates. The highest account includes $47,355 for counsel time at what is termed a “substantial indemnity rate.” The latter consists of 55 hours for senior counsel at $750 an hour (for a total of $41,250), $325 an hour for 15.6 hours ($5,070) for an associate lawyer and $225 an hour for 4.6 hours ($1,035) for a licensed paralegal. In addition, $1,317.20 is claimed for disbursements, for a total Bill of Costs of $48,672.20.

Subsection 12(2) of the Schedule to Regulation 664 sets out the criteria for awarding legal expenses. This is reproduced in section 75.2 of the Code as applicable to both arbitration and appeals. I find the Appellant entitled to its reasonable legal expenses of this preliminary issues appeal hearing for the following reasons:

(1) Each party’s degree of success in the outcome of the proceeding (criterion “a”). The Appellant was largely successful in its stay request. It provided substantive and substantial grounds for its appeal and for its stay request. The Respondent’s motion was rejected. I find that my rejection of the Appellant’s cross-appeal should go to the question of the quantum of legal expenses, not entitlement.

(2) The conduct of a party or a party’s representative that tended to prolong, obstruct or hinder the proceeding (criterion “d”). The Respondent’s motion was ill-conceived. He conceded, amongst other things, receipt prior to the June 2015 arbitration of 90% of the Arbitrator’s November 16, 2015 subsequent $357,991.09 benefits award, yet maintained a stubborn refusal to look at the reality of this case.

My present, albeit limited, acquaintance with this entire proceeding is that both parties have engaged, at different times, in seemingly guerilla procedural warfare in an effort to gain a strategic advantage that would ignore the substantive merit of a matter.

The Appellant sought, in 2014, to stay the scheduled arbitration on catastrophic impairment to obtain a further medical assessment. In 2015, the Appellant sought to squash the Respondent’s claim for a special award on a procedural basis. The Respondent now seeks to strike out virtually anything the Appellant delivers.

I am persuaded, however, that the Appellant’s missteps in this appeal to date, including failing to set out the basis for a stay in its initial Notice of Appeal (that was later rectified with the Respondent having more than a reasonable opportunity to know the Appellant’s case and to be able to respond both in written and oral submissions, should go to the question of the quantum of legal expenses, not entitlement.

The Appellant seeks 33.8 hours. It sets out different hourly rates for a total of $5,140.55 at the legal aid rate to its actual fee of $11,729.97. I find that the Appellant, as an insurer, is limited under Rule 78.1 of the Code to the hourly rates set out in the Legal Aid Services Act,1998.

Henri and Allstate Insurance Company of Canada, (OIC A-007954, August 8, 1997), held that a line-by-line assessment of the expenses claimed is not appropriate. Rather, a global assessment of reasonable expenses should be made. In Bains and RBC General Insurance Company, (FSCO P09-00005, September 8, 2010), in regard to appellate cost awards for an entire appeal, I stated:

My own review of appeal expense orders from the last six years are set out below … The twenty cases indicate an average appeal expenses award of $3,389.11 - $4,733.58 where insureds were successful, $2,812.91 where the award was to insurers. The modest differential in absolute terms may be due, in part, to the higher maximum hourly rate of $150 under Rule 78 of the Code allowed applicants’ representatives, rather than the legal aid maximum applicable to insurers' representatives. [Emphasis added]

The legal expenses presently sought are not for the entire appeal. However, the Respondent claims 75.2 hours for these preliminary appeal issues, issues that approached encompassing the whole appeal. Considering the average awards set out in Bains and my comments above regarding factors that should go to quantum, not entitlement, I find that the Respondent shall forthwith pay the Appellant its legal expenses of this preliminary issues appeal order assessed in the amount of $2,500, inclusive of HST, as being reasonable.