Alireza Ghasemi Hojatmandi v. TD General Insurance Company, 2017 ONFSCDRS 276

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2017 ONFSCDRS 276

FSCO A15-008136

BETWEEN:

ALIREZA GHASEMI HOJATMANDI

Applicant

and

TD GENERAL INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before:

Arbitrator Paulina Gueller

Heard:

By written submissions completed by October 13, 2017

Appearances:

Mr. Robert Franklin for the Applicant

Ms. Sarah Kim and Ms. Jennifer D. Sweitzer for the Insurer

Issues:

The Applicant, Mr. Alireza Ghasemi Hojatmandi, was injured in a motor vehicle accident on June 19, 2014 and sought accident benefits from TD General Insurance Company (“TD General”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation and Mr. Ghasemi Hojatmandi, 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 issues in this Expense Hearing are:

What is the quantum the Applicant is liable to pay with regards to the Insurer’s expenses in respect to the Arbitration proceeding under section 282(11) of the Insurance Act?

Result:

The Applicant is liable to pay the Insurer its expenses of this Arbitration proceeding in the amount of $8,595.96 (inclusive of all fees, disbursements and HST).

BACKGROUND

I conducted the Hearing for the issues in dispute on May 3, 4 and 5, 2017, and subsequently issued my written decision dismissing all of the Applicant’s claims.

I advised the parties that if they were not able to agree on expenses, either party could request an appointment for an Expense Hearing, which the Insurer subsequently requested.

Insurer’s Position

The Insurer submitted a Bill of Costs for $64,848.32 for legal hours incurred by five lawyers, one articling student and one law clerk, plus $8,621.22 for disbursements.

However, the Insurer submitted that its claim is for the total amount of $20.630.09, including legal hours and disbursements.

Applicant’s Position

The Applicant submitted that the Insurer’s offers to settle are not relevant to the issues of costs as most of them were to settle on a full and final basis and were all-inclusive offers. The only offer made to settle the issues in dispute was dated May 1, 2017 and was in the amount of $6,000.00. The offer expired one minute before the Hearing.

The Applicant submitted that based on the maximum hours allowed under Part II of the Legal Aid Services Act, 1998, the maximum for attendance at the Hearing would be $1,527.96 plus disbursements.

However, the alternative amount could be $8,595.96 ($7,203.24 for 66 hours at the legal aid rate of $109.14, plus $1,392.72 for disbursements), based on the case Amoa-Williams v Allstate, where Arbitrator Sapin stated, “I turn for assistance to Schedule 2 to the Legal Aid Regulation, which allows a maximum of 6.5 hours for “preliminary interviews, advising and receiving instructions” to begin an action an prepare pleadings, 2 hours to prepare for a pre-trial conference, (arguably similar to a pre-hearing at FSCO); and no maximum for attendance at such”;² “Rather than a line-by-line analysis of dockets, arbitrators have preferred a “global” approach to assessing expenses, expressed through the somewhat approximate method of assigning a ratio of preparation time to hearing time, expressed either in terms of hours or days”.³

LAW

Rule 75 of the Dispute Resolution Practice Code sets out the criteria to be considered in awarding expenses, and provides:

75.1 An adjudicator may award expenses to a party if the adjudicator is satisfied that the award is justified having regard to the criteria set out in Rule 75.2. The items and amounts which may be awarded are found in Rule 78 and the Schedule to the Expense Regulation found in Section F of the Code. 75.2 The adjudicator will consider only the criteria referred to in the Expense Regulation found in Section F of the Code. These criteria are:

(a) each party's degree of success in the outcome of the proceeding; (b) any written offers to settle made in accordance with Rule 76; (c) whether 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 Ontario Regulation 403/96 (Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996) made under the Act or refused or failed to provide any material required to be provided by subsection 42 (10) of that regulation; and (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.

EVIDENCE AND ANALYSIS:

The Insurer was the successful party at the Hearing. Offers to settle were presented from both sides without success. I accept the Applicant’s submissions that settling an accident benefits file on a full and final basis is very different from an offer to settle the issues in dispute. Considering the well-recognized consumer protection aspect of the Schedule, I accept that the Applicant is not obligated to settle only on a full and final basis.

The Applicant participated in the process and there were no novel issues. Neither party prolonged, obstructed or hindered the proceedings with their conduct. In addition, no evidence was presented that the Application for Arbitration was vexatious or in bad faith.

I find it reasonable that the Insurer spent time preparing its Response to the Application for Arbitration, attending two Pre-Hearings (one in person and the other by telephone), and preparing for the Arbitration. However, I find that the amount of hours claimed in the Insurer’s legal fees has not been substantiated for a case which did not appear to be highly complex.

I also take into consideration that there was some merit to the Applicant’s case, but the evidence did not prove his entitlement to the benefits in dispute.

In addition, I infer that there should have been some merit to the case as the Insurer made several offers to settle.

Conclusion

I agree with the case law submitted by the Applicant, Amoa-Williams v Allstate. Accordingly, I accept the Applicant’s submissions and I exercise my discretion pursuant to subsection 282(11) of the Insurance Act and Order Mr. Ghasemi Hojatmandi to pay TD General the amount of $8,595.96 (inclusive of all fees, disbursements and HST).

October 26, 2017

Paulina Gueller

Arbitrator

Date