Financial Services Commission des
Commission services financiers
of Ontario de l’Ontario
Neutral Citation: 2017 ONFSCDRS 249
FSCO A15-001831
BETWEEN:
RODEL GARCIA
Applicant
and
TD GENERAL INSURANCE COMPANY
Insurer
DECISION ON EXPENSES
Before:
Arbitrator Jeff Musson
Heard:
By written submissions completed July 17, 2017
Appearances:
Mr. Mick Hassell for Mr. Rodel Garcia
Ms. Danielle Koehn for TD General Insurance Company
Issues:
The Applicant, Mr. Rodel Garcia, was injured in a motor vehicle accident on August 30, 2013. He applied for statutory accident benefits from TD General Insurance Company (“TD Insurance”), payable under the SABS.1 The parties were unable to resolve their disputes through mediation and Mr. Garcia, 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.
I conducted the Hearing for the issues in dispute on September 1 & 2, 2016, and subsequently issued my written decision with reasons, wherein I dismissed all of the Applicant’s claims in the Arbitration. On the issue of expenses, I ruled that if the parties were unable to mutually agree on expenses, then either party would be entitled to request an Expense Hearing - which TD Insurance subsequently requested.
The issue in this Expense Hearing is:
- What is the quantum that the Applicant is liable to pay with regards to the Insurer’s expenses in respect of the Arbitration proceeding under section 282(11) of the Insurance Act?
Result:
- The Applicant is liable to pay to the Insurer its expenses in respect of the Arbitration proceeding, fixed in the amount of $1,000.00 (inclusive of fees, disbursements and HST).
EVIDENCE AND ANALYSIS:
Introduction
The Insurer is claiming expenses in the total amount of $32,402.64, including HST; the amount is comprised of $24,724.17 in fees and $7,678.47 in disbursements.
My jurisdiction to conduct an Expense Hearing is set out in subsection 282(11) of the Insurance Act.2 An arbitrator shall, under Rule 75.2 of the Dispute Resolution Practice Code, consider only the following six 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 made in accordance with Rule 76.
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, including a failure to comply with undertakings and orders.
Whether any aspect of the proceeding was improper, vexatious or unnecessary.
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.
Entitlement to Expenses
The Insurer was successful in this arbitration Hearing. There were only 3 medical treatment plans in dispute, totaling $7,600.10. Offers were presented by both sides to settle this file prior to the Hearing; they were never less than $10,000 apart. Both sides agreed that there were no novel issues; in fact, it was a Minor Injury Guideline limit case. Both sides agree that neither party prolonged, obstructed or hindered the proceedings with their conduct. No evidence was submitted that this case proceeding to arbitration was improper, vexatious or unnecessary. Both parties agree that criteria #6 does not apply to this Hearing. The Insurer claimed the following:
TD STAFF LEGAL RATE LEGAL AID RATE
Total Fees for Preparation
(6 individuals)
$ 35,428.00
$19,653.46
Attendance Fee (Fergal C. Murphy @ 9.60 hours)
$ 2,304.00
$ 1,178.69
Attendance Fee (Danielle
$ 1,728.00
$ 1,047.65
Koehn @ 9.6 hours)
SUBTOTAL
$ 39,460.00
$ 21,879.80
H.S.T. (13%)
$ 5,129.80
$ 2,844.37
Disbursements
$ 7,678.47
$ 7,678.47
TOTAL
$ 52,268.27
$ 32,402.64
The Insurer also submitted the following disbursement costs:
Expense Type Vendor Amount
Court Reporter Network Reporting & Mediation $500.59
Court Reporter Network Reporting & Mediation $500.59
Courier Centurion Process Server $150.29
Witness Fees Dr. Pravesh Jugnundan $3,503.00
Process Server Centurion Process Server $62.72
Process Server Centurion Process Server $47.46
Witness Fees Dr. Debra Cowman $2,460.85
Photocopy Ricoh Canada Inc. $257.20
Process Server Centurion Process Server $84.75
Productions PW Lawyers Professional Corporation $111.02
TOTAL $7,678.47
Assessment of Expenses
This was an uncomplicated case. Only a few witnesses testified. Ultimately, the Applicant failed to establish the reasonableness of the 3 treatment plans in dispute. I find that the Insurer requiring 6 people to prepare on this file was excessive. The Insurer also had 2 lawyers present at the Hearing, which I found to be excessive as well. This file could have easily been handled by a junior associate. Further, the rates claimed for the Insurer’s legal fees exceeded those allowed by legislation. The Insurer also claimed disbursements for the court reporter, which under the legislation is not allowed. Therefore, both the fees and disbursements claimed by the Insurer will be reduced.
Principle of Fairness
Case law has determined that the SABS is consumer protection legislation. As such, it is not reasonable to expect an Applicant to pay $32,402.64 in expenses on a case that could never have been worth more than $8,000.00.
There was some merit to the Applicant’s case, but the evidence ultimately did not prove his entitlement to the benefits in dispute. The Insurer must have agreed that there was some merit to the Applicant’s case as well, because they offered money to settle the file prior to the Hearing.
Without getting into details, as a matter of professional courtesy to the Applicant’s counsel, it will suffice to say that in my opinion the Applicant received poor legal representation throughout the arbitration process. As such I am not satisfied any justifiable purpose is served by ordering the Applicant to personally pay the Insurer’s expenses beyond a nominal amount.
Conclusion
Considering the principles of fairness, the Applicant should not be punished by having to pay the substantial legal costs of the Insurer. The SABS is consumer protection legislation and its authors never intended to financially penalize those who have legitimate disputes but disagree with how an insurer has handled their file.
EXPENSES:
I find it appropriate to fix the Insurer's expenses at $1,000.00 for fees, disbursements and HST.
September 22, 2017
Jeff Musson
Arbitrator
Date
Financial Services Commission des
Commission services financiers
of Ontario de l’Ontario
Neutral Citation: 2017 ONFSCDRS 249
FSCO A15-001831
BETWEEN:
RODEL GARCIA
Applicant
and
TD GENERAL 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 liable to pay to the Insurer its expenses in respect of the Arbitration proceeding, fixed in the amount of $1,000.00 (inclusive of fees, disbursements and HST).
September 22, 2017
Jeff Musson
Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule - Accidents on or after September 1, 2010, Ontario Regulation 34/10, as amended.
- Insurance Act, R.S.O. 1990, c. I.8.