Neutral Citation: 2017 ONFSCDRS 127 FSCO A14-003770

BETWEEN:

MICHAEL KEEPING Applicant

and

AVIVA CANADA INC. Insurer

DECISION ON EXPENSES

Before: Arbitrator Marcel D. Mongeon

Heard: By telephone conference on March 17, 2017

Appearances: Mr. Charles E. Gluckstein, representative for Mr. Michael Keeping Ms. Joy Stothers, representative for Aviva Canada Inc.

Issues:

The Applicant, Mr. Michael Keeping, was injured in a motor vehicle accident on June 4, 2013 and sought accident benefits from Aviva Canada Inc. ("Aviva"), 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.

The issue in this Expense Hearing is:

What expenses, if any, is either party entitled to?

Result:

The Insurer shall pay the Applicant expenses of $11,401.28 forthwith ($10,089.63 plus HST of $1,311.65).

EVIDENCE AND ANALYSIS:

This is related to my Hearing Decision, dated October 31, 2016, in the above-captioned file. The Applicant was seeking Attendant Care Benefits for a period of time following the accident. I determined that the Applicant was entitled to such a benefit for three and a half months while he was in the care of Ms. Christina Graham. The parties were unable to agree on entitlement to the expenses of the Hearing and have sought my determination.

In this matter, I note that the Applicant had initially claimed approximately $120,000.00 in Attendant Care Benefits. My actual award was approximately 10% of the amount sought for this benefit. In making the award of Attendant Care Benefits, I was persuaded by the oral testimony of the Applicant's witness, Ms. Christina Graham. I also noted that Ms. Graham's testimony was consistent with her "will say" statement that had been exchanged prior to the Hearing.

The Applicant has submitted that he should be entitled to expenses at the Legal Aid Rate for Mr. Gluckstein (called in 1999, claimed at a Tier 1 Legal Aid Rate of $109.14 per hour); a law clerk ($32.37 per hour); and a student-at-law ($64.74 per hour). Expenses for three activities were sought: 1) Drafting and researching written submissions ($2,095.74); 2) Arbitration preparation ($5,385.69); and 3) Attendance at the Arbitration ($2,608.20). These expenses total $10,089.63 and bear HST at 13% ($1,311.65) for a grand total of $11,401.28.

The details submitted for the three activities and persons involved are the following:

Drafting and Researching: Gluckstein 2 hours $218.28 Student 29 hours $1,877.46
Arbitration preparation Gluckstein 36 hours $3,929.04 Clerk 15 hours $485.55 Student 15 hours $971.10
Attendance at Arbitration Gluckstein 15 hours $1,637.10 Student 15 hours $971.10

Expenses in an Arbitration Hearing are governed by Regulation 664, R.R.O. 1990, Automobile Insurance made under the Insurance Act, as amended. Section 12 thereof, as it read immediately before being amended by Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, sets out a number of criteria that an Arbitrator shall consider in awarding all or part of the expenses of an Arbitration proceeding. These criteria are (with some editing):

Each party's degree of success in the outcome of the proceeding.
Any written offers to settle [...]
Whether novel issues are raised in the proceeding.
The conduct of a party or a party's representative that tended to prolong, obstruct or hinder the proceeding [...]
Whether any aspect of the proceeding was improper, vexatious or unnecessary.
Whether the insured person refused or failed to submit to an examination [...]

To respond to each of these criteria in turn, I note:

The Applicant prevailed in part on the only issue in dispute. Although Attendant Care Benefits for an extended period of time were sought, I held that they were payable for only a 3½ month period of time.

There were no offers to settle that were brought to my attention.

In my view, the issue of whether or not the Applicant could be assessed for an Attendant Care Benefit while incarcerated was novel. In addition, the issue of economic loss requiring proof throughout the period of time that a benefit might be payable was also a novel and live issue throughout the relevant period of time.

On the issue of hindrance, the Insurer suggested that in the absence of being provided Ms. Graham's income tax returns in a timely manner, it was hindered in making a determination on her economic loss. Since I did not actually make these returns an Exhibit in the Arbitration, but rather relied on Ms. Graham's live testimony to establish her economic loss, it is difficult to see how it can be said that the lack of tax returns hindered the process. I made a determination of Ms. Graham's economic loss on the basis of her testimony which I found consistent with her "will say" statement provided to the Insurer. There was no hindrance.

The Hearing on the benefits payable took three days. Although the Applicant prevailed in part of the Hearing, it was not improper, vexatious or unnecessary for the Applicant to have pursued the Attendant Care Benefit issue for the periods of time other than those awarded. There were enough facts presented to make the point arguable.

No relevant circumstances of missing examinations were brought to my attention.

Both parties have cited various arbitral awards previously made in Schedule matters. These awards tend to break out into two categories: the first category includes awards that suggest each party should bear their own expenses. These awards² suggest that if a party does not win all it was seeking, then it is more appropriate to have both parties bear their own expenses. The second category – which I prefer in this case – are those awards that say, because the Applicant had to engage in the Hearing to achieve the benefits that it did, even if those benefits are less than everything that was sought, that should not eliminate the principle that expenses should be awarded to the party that prevailed.³

Based on the foregoing, the Applicant is entitled to an expense award. I come to this conclusion on the basis that in the absence of any formal offers to settle, the Applicant was required to go to the Arbitration Hearing to receive what he did. The novelty of some aspects of his claim further required conducting an Arbitration Hearing to achieve the payment of the benefits that was awarded.

Denying expenses in this case would be unfair to the Applicant as his award of benefits could be consumed by the expenses that had to be incurred to achieve them. In this case, the Applicant had no recourse but to take the matter to a complete Hearing to achieve the benefits which he did. Just because he only achieved part of what he was seeking is not, in this case, sufficient reason to deprive him of the general principle that someone who prevails in a matter is entitled to a partial indemnity of his expenses from the other party.

In setting applicable rates for representatives, I am guided by section 78 of the Dispute Resolution Practice Code. This provides that the Legal Aid Rates should be used unless I am satisfied that a higher rate should be used. Under the foregoing criteria, I find that the normal Legal Aid Rates are appropriate. I find that the time claimed by the Applicant as outlined above to be reasonable and consistent with this requirement. No information about disbursements incurred was submitted to me and, accordingly, I make no disbursements award.

EXPENSES:

The Applicant is entitled to be paid expenses which I set at $11,401.28 ($10,089.63 as outlined above and HST at 13% [$1,311.65]).

May 1, 2017

Marcel D. Mongeon Arbitrator

Financial Services Commission of Ontario