Financial Services Commission des
Commission services financiers
of Ontario de l’Ontario
Neutral Citation: 2017 ONFSCDRS 109
FSCO A15-007904
BETWEEN:
KEVIN CALDWELL
Applicant
and
WAWANESA MUTUAL INSURANCE COMPANY
Insurer
DECISION ON EXPENSES
Before:
Arbitrator Deborah C. Anschell
Heard:
By written submissions due February 10, 2017
Appearances:
Mr. Leonard H. Kunka for Mr. Kevin Caldwell
Mrs. Megan Murphy for Wawanesa Mutual Insurance Company
Issues:
The Applicant, Mr. Kevin Caldwell, was injured in a motor vehicle accident on February 23, 2011 and sought accident benefits from Wawanesa Mutual Insurance Company (“Wawanesa”), payable under the Schedule.1 The parties were unable to resolve their disputes through mediation, and the Applicant, through his representative, applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c. I.8, as amended.
With the exception of the Applicant’s expenses, the issues in dispute were resolved prior to the scheduled Arbitration. The parties did not prepare for or attend the Arbitration.
The issue in this Expense Hearing is:
- What reasonable expenses flow from the settlement of this matter?
Result:
- The Applicant is entitled to expenses incurred with respect to this matter in the amount of $3,625.55, inclusive of HST.
EVIDENCE AND ANALYSIS:
Under subsection 282(11) of the Insurance Act, (as reiterated in Rule 75.2 of the Dispute Resolution Practice Code (“DRPC”)), an Arbitrator shall 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;
Whether novel issues are raised;
The conduct of a party or the party’s representative;
Whether any aspect of the proceeding was improper, vexatious or unnecessary.
Both parties provided detailed written submissions with respect to the issue of expenses. Mr. Kunka is seeking a total amount of $6,840.00 for fees, and a further amount of $987.02 for assessable disbursements.
Mr. Kunka submits that the Arbitration settled shorty before the scheduled dates of February 16 and 17, 2017. The Applicant was forced to prepare all documents, attend at Mediation, incur disbursements for the preparation of materials and payment for medical reports, and incur significant legal costs, all on account of Wawanesa’s refusal to pay for two treatment plans submitted in 2014.
Mr. Kunka notes that the issues in dispute were two treatment plans, in the total amount of $11,649.16. Both treatment plans were submitted to Wawanesa in 2014. The parties participated in a Mediation by way of telephone conference on August 18, 2015. The Application for Arbitration was delivered by the Applicant on November 12, 2015. A Pre-Hearing was conducted on March 1, 2016. The dispute was not resolved at that time.
In November 2016, Wawanesa offered to resolve the issues in dispute by payment of the remaining medical and rehabilitation benefits in the amount of $11,422.54, without any payment toward the expenses of the Arbitration. A settlement discussion was booked for January 13, 2017, to discuss what amount Wawanesa was prepared to pay toward expenses and disbursements relating to the Arbitration. One day prior to the settlement discussion, Wawanesa paid the amount referenced above ($11,422.54), but nothing was remitted toward the expenses of the Arbitration. At the settlement discussion, Wawanesa made an offer of $500.00 for legal costs and disbursements to resolve the expenses of the Arbitration.
The Applicant submits that he was successful on all issues. The payment made by Wawanesa unfortunately was two years after it had initially denied the two treatment plans. The Applicant submits that Wawanesa’s conduct significantly prolonged this matter. It wasn’t until one month before the scheduled Arbitration that Wawanesa paid an amount in settlement of the Arbitration.
In reply, Ms. Murphy submits that no expenses or disbursements should be awarded to the Applicant. Alternatively, Ms. Murphy submits that an appropriate amount for expenses would be $450.00.
Wawanesa submits that given the timing of the settlement in this matter, the parties did not prepare for or attend the Arbitration. The reason that the two disputed treatment plans were not approved initially was that the Applicant refused to attend Insurer Examinations to assess entitlement.
Wawanesa argues that it ensured that the issues in dispute were resolved prior to the Arbitration and before any expenses to prepare for the Arbitration had to be incurred. Further, Wawanesa submits that a total of 45.6 hours of counsel and clerk time is not reasonable. This is particularly true given that this Arbitration was resolved well before preparation for the Arbitration would have taken place.
I find that the Applicant was successful with respect to the outcome of the issues to be determined in the Arbitration. There were no formal offers of settlement until two years after Wawanesa denied the two treatment plans in dispute. I do not have any difficulty with respect to the conduct of either party or their representatives. The proceedings were not improper, vexatious or unnecessary. There were no novel issues to consider in this matter.
The Applicant is clearly entitled to be reimbursed for his fees and disbursements. The question then remains as to the appropriate calculation of the amount.
An hourly amount for legal fees is governed by Rule 78 of the DRPC, which provides that the hourly rate established under the Legal Aid Services Act, 19982 shall apply. Where an Arbitrator is satisfied that a higher amount for legal fees to an insured person is justified, an hourly rate may be ordered of up to $150.00. Based upon Mr. Kunka’s experience, I am satisfied that he is entitled to the $150.00 per hour rate.
I am reducing Mr. Kunka’s time claimed slightly, given that the matter did not proceed to a Hearing. I am prepared to allow 10 hours at the rate of $150.00 per hour, for a total of $1,500.00. Similarly, I am reducing the law clerk’s time to 20 hours at a rate of $32.37 per hour. This totals $647.40. I am allowing the associate’s time as claimed for a total of $491.13. Total fees are therefore $2,638.53.
I am allowing the disbursements claimed in the amount of $987.02.
EXPENSES:
Total expenses inclusive of fees and disbursements are $3,625.55, inclusive of HST, and are payable to the Applicant.
April 10, 2017
Deborah C. Anschell
Arbitrator
Date
Financial Services Commission des
Commission services financiers
of Ontario de l’Ontario
Neutral Citation: 2017 ONFSCDRS 109
FSCO A15-007904
BETWEEN:
KEVIN CALDWELL
Applicant
and
WAWANESA MUTUAL INSURANCE 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 Ontario Regulation 664, as amended, it is ordered that:
- The Applicant is entitled to expenses incurred with respect to this matter in the amount of $3,625.55, inclusive of HST.
April 10, 2017
Deborah C. Anschell
Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule - Effective September 1, 2010, Ontario Regulation 34/10, as amended.
- S.O. 1998, C. 26.