Financial Services Commission des
Commission services financiers
of Ontario de l’Ontario
Neutral Citation: 2017 ONFSCDRS 296
FSCO A14-007546
BETWEEN:
ANNA RAJASTE
Applicant
and
WAWANESA MUTUAL INSURANCE COMPANY
Insurer
DECISION ON EXPENSES
Before:
Arbitrator Jeff Musson
Heard:
By written submissions completed August 25, 2017
Appearances:
Mr. Frank Mercurio for Anna Rajaste
Ms. Kathleen O’Hara for Wawanesa Mutual Insurance Company
Issues:
The Applicant, Ms. Anna Rajaste, was injured in an accident on October 11, 2012 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 Ms.
Rajaste, through her 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 February 15-17, 2017 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, then either party would be entitled to request an Expense Hearing, which Wananesa 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 $2,500.00 (inclusive of fees, disbursements and HST).
EVIDENCE AND ANALYSIS:
Introduction
The Insurer is claiming expenses in the total amount of $22,820.05, including HST; the amount is comprised of $17,575.13 in fees and $5,244.92 in disbursements. It is also claiming $750.00 in expenses related to this Expense Hearing.
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 (“DRPC”), 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. The Applicant sought entitlement to income replacement benefits in the amount of $263.47 per week from April 29, 2013 to date and ongoing. She also claimed a medical benefit in the amount of $1,965.20 dated January 1, 2013 by Health Max Physio. The Applicant further claimed a special award, interest and costs. There were no offers to settle as per Rule 76. Both sides agreed that there were no novel issues. The Insurer claimed that the Applicant, through her representative, engaged in conduct that hindered the proceeding and resulted in unnecessary costs for Wawanesa. The Applicant denied that her conduct hindered the proceeding in any manner. Further, the Applicant through her submission stated she has complied with all undertakings in a timely manner. The Applicant also took the position that the Insurer’s conduct hindered the proceedings. The Insurer requested an adjournment of the Hearing which was originally scheduled for July 6, 7 and 8, 2016 in order to conduct an updated section 44 orthopedic assessment regarding entitlement to income replacement benefits even though the Applicant’s reports were served on May 30, 2016.3
The Insurer took the position that the Applicant’s request for a special award was improper, vexatious and completely unnecessary. In its submission it states that the Applicant argued for a special award that was unrelated to the issues in dispute. The Applicant argued the claim for a special award was on the basis of the Insurer holding the Applicant within the Minor Injury Guideline (“MIG”). The MIG was not in dispute at this Arbitration Hearing because the Insurer removed the Applicant from the MIG several years prior to the Hearing. The Insurer submitted that the Applicant arguing a claim for a special award on an issue not in dispute was a waste of time and resources expended for the Hearing. Therefore, the Insurer claimed that under Rule 75.2, Section 5 of the DRPC the Applicant’s claim for a special award was unnecessary. The Applicant’s position was that no portion of the Hearing was improper, vexatious or unnecessary. Both parties agreed that criteria #6 did not apply to this Hearing. The Insurer claimed the following:
FEE ITEM
PERSONS
HOURS
RATE AS
ACTUAL
COSTS
(e.g. pleadings, affidavits, cross-
examinations, preparation, hearing,
(identify the lawyers,
students and law clerks who
(specify the hours claimed
for each person
PER DRPC
(specify the
rate being sought for
RATE
SOUGHT AT DRPC RATE
etc)
provided
services)
identified in column 2)
each person
identified in column 2)
Review of file
materials, review and
revision of opinion, correspondence with
Kathleen F.
O'Hara (2009)
87.6
$136.41
$215/$240
$11,949.52
client, within firm, with
counsel, with claimant
and with ADR.
preparation for and
attendance at pre-
hearing, participate in
Settlement,
teleconference
preparation of expert
FEE ITEM
PERSONS
HOURS
RATE AS
ACTUAL
COSTS
(e.g . pleadings, affidavits, cross-
(identify the
lawyers,
(specify the
hours claimed
PER DRPC
(specify the
RATE
SOUGHT AT DRPC RATE
examinations,
students and
for each
rate being
preparation , hearing,
law clerks who
person
sought for
etc)
provided
identified in
each person
services in
column 2)
identified in
connection
column 2)
with each item
together with
their year of
call, if
applicable)
witness, review and
revise joint document brief, preparation for
and attendance at arbitration (3 days)
Review and analysis
of productions, prepare opinion,
Dan M. lnkpen (2013)
25.8
$109.13
$175/$200
$2,815.55
prepared updated
evidence summary,
correspondence
within firm, legal
research
Review, cross- reference and analysis of medical and other
documents re
Stanislav A.
Bodrov (Student)
7.50
$64.73
$160
$485.48
inconsistencies,
preparation and
revision of arbitration
materials, preparation
of closing submissions
Briefing of file
materials, updating file with new materials,
correspondence to
Kimberly K. Alexis, Law Clerk
35.0
$32.36
$140/$145
$1,132.60
counsel re
productions,
correspondence to
and arranging
witnesses, draft and
revise joint document
brief
The Insurer also submitted the following disbursement costs:
Description
Amount
Postage
$10.48
Facsimile Charges
$26.00
Photocopying
$372.25
Photocopying (Blouin Dunn account)
$1.25
Travel, Mileage & Parking (attendance at pre-hearing and 3 days of arbitration)
$236.00
Clinical notes and records
$90.00
Clinical notes and records (Blouin Dunn account)
$100.00
Colour photocopies
$75.00
Long distance calls
$0.24
Conduct Money*
$53.00
Conduct Money*
$53.00
Outside printing re: arbitration evidence (large colour photographs)
$10.00
Courier to F. Mercurio Legal Services
$10.44
Process Servers re: Summons to Witness
$43.25
Process servers re: mileage fees
$45.00
Process servers re: ADR chambers
$51.85
Process servers re FSCO summons
$3.26
Process servers re: FSCO summons
$43.25
Process servers re: FSCO affidavit of service
$10.80
Courier Fee: summons
$28.65
Preparation Fee: Dr. Saplys**
$500.00
Attendance Fee: Dr. Saplys** (Attendance at $200.00 per hour x 2 hours)
$400.00
Report Fee: Dr. Saplys**
$1,500.00
Subtotal
$4,653.72
HST
$591.20
Total (with tax)
$5,244.92
*No HST
**Maximum Allowable under the Schedule
Assessment of Expenses
This was an uncomplicated case. Only a few witnesses testified. Ultimately, the Applicant failed to establish the entitlement to the issues in dispute. The Applicant did not present her expenses, so it was difficult to assess what the Insurer’s fees were when compared to the fees that the Applicant incurred from her own counsel. Therefore, I am left to determine the reasonableness of the expenses that the Insurer submitted based on similar cases, the Applicant’s ability to pay as well as the principle of fairness. Using this methodology, both the fees and disbursements claimed by the Insurer will be reduced. The Insurer also requested that expenses related to this Expense Hearing be considered in this decision. I am not considering anything additional towards expenses requested by the Insurer for the Expense Hearing and instead I am addressing the issue of costs as a whole.
Principle of Fairness
Case law has determined that the Schedule is consumer protection legislation. As such, it is not reasonable to expect an Applicant to pay $22,820.05 in expenses on a case that lasted 3 days and as stated was uncomplicated.
There was some merit to the Applicant’s case, but the evidence ultimately did not prove her entitlement to the benefits in dispute. The Insurer was able to successfully defend against this case without a need to call a large number of experts. In my opinion, this case, at its root, was a difference of opinion between Applicant and Insurer. Both sides equally felt they had a strong position and therefore decided that the only way in which to bring resolution to the dispute was through the arbitration process.
The Applicant further in her Expense Hearing submission stated that she has not been able to return to any type of gainful employment since the motor vehicle accident. Her only source of income is Canada Pension Plan disability benefits which is approximately $750.00 per month. She stated that from a financial perspective, she is not in a position to afford to pay any costs, if they are awarded against her. 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 Schedule 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 $2,500.00 for fees, disbursements and HST.
November 13, 2017
Jeff Musson
Arbitrator
Date
Financial Services Commission des
Commission services financiers
of Ontario de l’Ontario
Neutral Citation: 2017 ONFSCDRS 296
FSCO A14-007546
BETWEEN:
ANNA RAJASTE
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 liable to pay to the Insurer its expenses in respect of the Arbitration
proceeding, fixed in the amount of $2,500.00 (inclusive of fees, disbursements and HST).
November 13, 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.
- Applicant’s Cost submission, pg. 2.```