Financial Services Commission des
Commission services financiers
of Ontario de l’Ontario
Neutral Citation: 2017 ONFSCDRS 104
FSCO A15-002228
BETWEEN:
VINCENT SINCLAIR
Applicant
and
UNIFUND ASSURANCE COMPANY
Insurer
DECISION ON EXPENSES
Before: Anita Idemudia
Heard: By written submission from the Solicitor for Unifund received July 14, 2016.
Mr. Sinclair made no submissions.
Introduction:
The Applicant, Vincent Sinclair, was injured in a motor vehicle accident on April 27, 2013 and sought statutory accident benefits from Unifund Assurance Company (“Unifund”), payable under the Schedule.1 The parties were unable to resolve their disputes through mediation, and the Applicant applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.1.8, as amended.
In a decision on a preliminary issue, dated June 23, 2016, Arbitrator Wilson found that Mr. Sinclair is precluded from proceeding to arbitration because the sole issue in his application for arbitration, entitlement to non-earner benefits, was not mediated or the subject of the report of mediator dated November 25, 2014.
Following the decision on the preliminary issue, Unifund requested an award of expenses pursuant to subsection 282(11) of the Insurance Act, the applicable provisions of the Expense Regulation and the Dispute Resolution Practice Code (the “Code”). It relied on the following grounds:
That it was the successful party at the conclusion of the preliminary issue hearing;
That it provided Mr. Sinclair with the legislation, cases and evidence relied upon well in advance of the hearing;
That Mr. Sinclair knew the case he had to meet and failed to address the jurisdictional issues raised by the Insurer.
I requested written submissions to be completed by October 13, 2016. Mr. Sinclair failed to file or serve any submissions.
The issue in this expense hearing is:
- Is Unifund entitled to its expenses incurred in respect of the arbitration hearing and, if so, in what amount?
Result:
- Unifund Assurance Company is entitled to its expenses in the amount of $1,590.68, inclusive of fees, disbursements and applicable HST.
Entitlement to Expenses:
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.
The criteria an adjudicator shall consider when deciding whether to award expenses are found in Ontario Regulation 664, in Rule 75.2 and section F of the Code (Fourth Edition – Updated January 2014). They are as follows:
a. Each party’s degree of success;
b. Any written offers to settle made in accordance with Rule 76;
c. Whether any novel issues are raised in the proceeding;
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 the Statutory Accident Benefit Schedule;
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 – 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 discuss each of these criteria in order:
(a) Each Party’s Degree of Success in the Outcome of the Proceeding:
Unifund was entirely successful in the preliminary issue hearing.
(b) Any Written Offers to Settle Made in Accordance with Rule 76
Unifund made Mr. Sinclair a Rule 76 offer on January 5, 2016, for a withdrawal of the Application for Arbitration on a without costs basis.
(c) Whether any novel issues are raised in the proceeding
The issues were not novel.
(d) The conduct of a party or a party’s representative that tended to prolong obstruct or hinder the proceedings, including a failure to comply with undertakings and orders
I note that no conduct to prolong, obstruct or hinder the proceedings was alleged by Unifund, and neither was there was a failure to comply with undertakings or orders. Further, Arbitrator Wilson noted on page 8 of his decision, that “Mr. Sinclair was co-operative and assisted in keeping the hearing process timely and efficient.”
This factor is therefore neutral.
(e) Whether any aspect of the proceeding was improper, vexatious or unnecessary
Under this criterion, Unifund submitted that the entire hearing was unnecessary and that Mr. Sinclair had been provided with relevant legislation, evidence and case law to make that determination well in advance of the hearing but Mr. Sinclair chose to proceed with the hearing, causing Unifund to incur legal expenses.
It is clear that the issue at the preliminary issue hearing was whether Mr. Sinclair could proceed to arbitration. Arbitrator Wilson found that Mr. Sinclair was precluded from proceeding to arbitration on the basis that he failed to mediate entitlement to the non-earner benefit.
(f) Whether the insured person refused or failed to submit to an examination as required under section 42 of the Statutory Accident Benefit Schedule;
Not applicable to this proceeding
(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.
Not applicable to this proceeding
Based upon Unifund’s complete success at the hearing, the reasonable offer to settle, which Mr. Sinclair rejected and the fact that it was Mr. Sinclair who required the matter to proceed to the hearing stage, I have determined that the Insurer is entitled to its expenses from this Arbitration proceeding up to and including preparing for this Expense Hearing.
Amount of Expenses:
The type and amount of expenses I may award, are set out in the Schedule to the Expense Regulation (Dispute Resolution Expenses), pursuant to subsection 282(11) of the Insurance Act. It states as follows:
The filing fees paid by the insured person when applying for arbitration may be awarded to the insured person.
The filing fees paid by the insured person or the insurer when appealing the order of an arbitrator or applying to vary or revoke an order may be awarded.
(1)The legal fees payable by the insured person or the insurer for the following matters may be awarded:
For all services performed before an arbitration, appeal, variation or revocation hearing.
For the preparation for an arbitration, appeal, variation or revocation hearing.
For attendance at an arbitration, appeal, variation or revocation hearing.
For services subsequent to an arbitration, appeal, variation or revocation hearing.
(2) The number of hours for which legal fees may be awarded shall be determined by the arbitrator, having regard to the criteria set out in subsection 12 (2) of this Regulation.
(3) The maximum amount that may be awarded for legal fees is the amount calculated using the hourly rates set out in the Dispute Resolution Practice Code published by the Ontario Insurance Commission or Financial Services Commission of Ontario, as it may be amended from time to time.
Insurer’s Claim for Expenses:
In a Bill of Costs dated July 14, 2016, Unifund claimed fees in the amount of $1,974.00 and disbursements in the amount of $643.92. The fees represent time spent in preparing for and attending at the preliminary issue hearing, review of Arbitrator Wilson’s decision on the preliminary issue hearing and for drafting cost submissions for a total of 9.4 hours at $210.00 per hour.
Analysis and Findings:
It is established case law that in determining the appropriate quantum of expenses, the objective is to fix an amount that is fair and reasonable given the number of issues, their complexity and the amounts in dispute.
I find the number of hours claimed reasonable, but disagree with the hourly rate claimed by counsel. Rule 78 of the Code allows an adjudicator, where justified, to award a higher amount for legal fees up to a rate of $150.00 per hour to an insured person. This amount is not available to an insurer. I have therefore applied the Tier 3 Legal Aid rate for Ms. Zelezenic at the rate of $136.43 per hour. This results in a total of $1,282.44, plus HST, for fees. The final total for fees is therefore $1,449.15.
Disbursements:
Unifund claims the following disbursements:
Photocopying
$108.75
Delivery Services/Messengers
$ 16.50
Court Reporter
$518.67
TOTAL
$643.92
I am accepting the disbursement list as claimed by counsel for Unifund, except for the court reporter fees. I find that this item is not recoverable as it is not specifically allowed in the Schedule to the Expense Regulation and has been consistently refused by the Commission.2
Unifund is also seeking to recover $3,000.00 for the insurer assessment fee paid to the Commission for the Arbitration. The Assessment Fee is only recoverable where an applicant has failed to provide material required for an insurer’s examination, or failed to submit to an examination. I have no evidence that either instances apply in this case, therefore, I am denying it.3
I find that the remaining disbursements totaling $141.53, inclusive of HST are payable.
EXPENSES:
Having considered the applicable criteria in the Expense Regulation, the Insurer’s Bill of Costs, and the Written Submissions of the Insurer, I find it appropriate to fix the Insurer's expenses at $1,590.68, inclusive of fees, disbursements and applicable taxes.
April 7, 2017
Anita Idemudia
Arbitrator
Date
Financial Services Commission des
Commission services financiers
of Ontario de l’Ontario
Neutral Citation: 2017 ONFSCDRS 104
FSCO A15-002228
BETWEEN:
VINCENT SINCLAIR
Applicant
and
UNIFUND ASSURANCE COMPANY
Insurer
ARBITRATION ORDER
Under section 282 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, as amended, it is ordered that:
- Mr. Sinclair to pay Unifund its expenses in respect of the Arbitration proceeding, fixed in the amount of $1,590.68, inclusive of fees, disbursements and applicable taxes. .
April 7. 2017
Anita Idemudia
Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule – Effective September 1, 2010, Ontario Regulation 34/10, as amended.
- See Singh and Wawanesa Mutual Insurance Company (FSCO A02-001401, May 18, 2004); Kingsway General Insurance Company and Pereira (P05-00031, September 17, 2007); Mawugbe and Certas Direct Insurance Company (FSCO A13-009558, September 19, 2016)
- Section 7 of the Schedule to the Expense Regulation