Financial Services Commission des
Commission services financiers
of Ontario de l’Ontario
Neutral Citation: 2017 ONFSCDRS 93
FSCO A15-000871
BETWEEN:
LESLIE DU
Applicant
and
SECURITY NATIONAL INSURANCE CO./MONNEX INSURANCE MGMT. INC.
Insurer
DECISION ON EXPENSES
Before:
Arbitrator Benjamin Drory
Heard:
By written submissions completed February 1, 2017
Appearances:
Mr. Tom S. Yen for Mr. Leslie Du
Mr. J. Jason M. Kerr and Mr. Eric R. Levin for Security National Insurance Co./Monnex Insurance Mgmt. Inc.
Issues:
The Applicant, Mr. Leslie Du, was injured in a motor vehicle accident (“MVA”) on August 22, 2013. He sought accident benefits from Security National Insurance Co./Monnex Insurance Mgmt. Inc. (“Security National”), 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 (“FSCO”) under the Insurance Act “the Act”), R.S.O. 1990, c. I.8, as amended.
The Hearing in this matter was held on October 5 and 6, 2016. Mr. Du sought the cost of an assessment of attendant care needs (Form 1) provided by Perfect Physio, dated August 29, 2013, and a determination that his impairment(s) did not fall within the Minor Injury Guideline (“MIG”). Mr. Du withdrew a claim for attendant care benefits on the evening before the Hearing commenced. By decision, dated November 28, 2016, I dismissed Mr. Du’s claims. I determined that his impairment(s) were properly characterized as falling within the MIG, and that Mr. Du had not substantiated that the cost of the assessment of attendant care needs was reasonable and necessary.
I advised the parties that if they were unable to agree on the entitlement to, or quantum of, expenses respecting this matter, they could request an appointment with me for determination of such, in accordance with Rules 75 to 79 of the Dispute Resolution Practice Code (“DRPC”). The parties were unable to agree, and initiated this proceeding.
The issue in this Expense Hearing is:
- Is either party entitled to its expenses of the Arbitration?
Result:
- Security National is entitled to its expenses in the amount of $10,928.92, inclusive of HST and disbursements.
EVIDENCE AND ANALYSIS:
Security National
Security National sought costs in the total amount of $17,908.86, inclusive of HST and disbursements. Security National submitted that it was successful on all of the issues in dispute, per my November 28, 2016 decision.
Security National submitted that the enumerated criteria respecting expenses an Arbitrator is limited to considering are set out in Section 12(2) of Ontario Regulation 664,2 reflected in Rule 75.2 of the DRPC. Those criteria are:
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
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 the (Schedule) or refused or failed to provide any material required to be provided (therein)
Security National submitted that prior to the Hearing, it made several unsuccessful attempts to resolve the matter with Mr. Du. It first provided Mr. Du with three time-limited offers to settle via letter, dated February 18, 2015, prior to serving its Response to Mr. Du’s Application for Arbitration. Mr. Du did not accept the offers to settle. On August 18, 2016 (48 days before the hearing), Security National again attempted to resolve this matter prior to the Arbitration. Mr. Kerr prepared a written time-limited offer to resolve the matter on a full-and-final basis, or an alternate option to resolve all of the issues in dispute. Security National noted it was pertinent that 79% of its total costs (inclusive of HST and disbursements) were incurred after August 18, 2016—costs that would not have been incurred had Mr. Du accepted its offer.
Security National advised that written offers to settle are among the enumerated criteria I must consider as required by Rule 75.2 of the DRPC. Security National also submitted that per Rule 76.1, particular consideration is to be given to any offer served after the conclusion of the Pre-Hearing discussion up to 5 days before the commencement of the Hearing.
Rule 76.1 indicates:
An adjudicator will consider an Offer to Settle in connection with an award of Expenses provided that:
(a) it was made in writing, was served on the other parties and contains:
(i) the full terms of the Offer to Settle;
(ii) the date when the Offer was served and the time period during which it remained open for acceptance
AND
(b) the Offer was made after the conclusion of the mediation and before the conclusion of the hearing, with particular consideration given to any Offer served after the conclusion of the pre-hearing discussion or preliminary conference as the case may be, up to 5 days before the commencement of the hearing.
Security National submitted it was not advised until the eve of the Hearing that Mr. Du would be withdrawing the issue of attendant care benefits. The Insurer also spent considerable time preparing and organizing its case on the basis that the Applicant would be calling Dr. Georgia Palantzas and Ms. Li Jing. Despite this, only Dr. Palantzas was called. Ms. Li Jing was not called. Applicant’s counsel did not provide any warning that they would not be calling her. On August 23, 2016, Mr. Kerr had written to Mr. Du’s counsel to confirm who he intended to call as his expert witnesses, and to ensure that Dr. Palantzas and Ms. Jing were available for cross-examination if Mr. Du intended to rely on any documents they authored. No response was received on point.
Security National advised that Mr. Kerr was called to the Bar in January 2006 and has been practising civil litigation since that time; accordingly, Mr. Kerr’s fee rate was entitled to be increased by 12.5% over the standard $109.13/hour Legal Aid rate, in accordance with Sections 24.1 and 24.2 of Part IV to Schedule 2 of Regulation 107/99 of the Legal Aid Services Act, 1998. Per Rule 78.1 of the DRPC, legal fees awardable as expenses are limited to the rates established under the Legal Aid Services Act, 1998. Security National advised that other counsel involved in the case did not qualify for the 12.5% increase, and thus remained at the $109.13 base rate.
Security National submitted that Section 5 of the Schedule to Section F of the Expense Regulation allows up to $500.00 per expert witness for preparation, and up to $200.00 per hour for attendance, with a maximum of $1,600.00 per day. The Insurer called one expert to testify at the Hearing, Dr. Michael Boucher, whose viva voce testimony and written expert report were material and referred to in the Reasons for Decision several times. The Insurer incurred time and expense to prepare and produce Dr. Boucher as an expert for the Arbitration, and sought its costs for such.
Security National’s Bill of Costs was as follows:
Allowable Fees at Legal Aid Rates
Actual Fees Incurred by Security National
Total Fees for Preparation
$6,118.58
$12,241.00
Attendance Fee—J.J.M. Kerr
$1,718.93
$3,850.00
Attendance Fee—E. Levin
$1,527.82
$2,250.00
SUBTOTAL
$9,365.32
$18,341.00
HST (13%)
$1,217.49
$2,384.33
Disbursements
$7,320.05
$7,320.05
TOTAL
$17,902.86
$28,045.38
Security National submitted the claims for fees were being made with respect to the following lawyers:
Year of Call
Legal Aid Rate
Actual Hourly Rate Incurred by Security National
J. Jason M. Kerr
2006
$122.78/hr
$240.00/hr
($275.00/hr post-June 17, 2016)
Rabjeet Wallia
2013
$109.13/hr
$180.00/hr
Eric Levin
2013
$109.13/hr
$180.00/hr
Yalda Aslamzada
Law Clerk
$29.36/hr
$100.00/hr
Warren D’Mello
Law Clerk
$29.36/hr
$100.00/hr
The hours claimed for legal fees were as follows:
PERSONS/DESCRIPTION
HOURS
LEGAL AID RATE FEES
File Opening, Review, Response, Correspondence, Legal Research, Preparation for Pre-Hearing and Settlement Discussions
12.90
$1,553.34
Rabjeet Wallia
2.20
J. Jason M. Kerr
10.70
Preparation for Arbitration October 5-7, Witness Preparation, Arbitration Briefs, Legal Research
46.20
$4,535.88
J. Jason M. Kerr
16.70
Eric Levin
20.30
Yalda Aslamzada
9.20
Preparation of Bill of Costs
1.00
$29.36
Warren D’Mello
1.00
Security National submitted the following list of disbursements:
ITEM
TOTAL
Summons fee pursuant to DRPC—Dr. M. Boucher
$80.72
Invoice—telephone consultation—Dr. M. Boucher
$508.50
Dr. M. Boucher—attendance ($3,200), travel time ($600), mileage ($0.54/km), file review/prep ($4,794.12), and HST ($623.24)
$5,417.36
J.J.M. Kerr—mileage Oct. 5 & 6 ($22.80/day, 2 days)
$45.60
Victory Verbatim (Court Reporter)—#468877 & 468878 ($571.22/day, 2 days)
$1,142.44
Centurion—Process Server
$125.43
TOTAL
$7,320.05
Mr. Du
Mr. Yen, on behalf of Mr. Du, submitted that Mr. Du had served and filed a Notice of Appeal in the matter (Form I) on December 22, 2016, and initially sought a stay of this matter. However, on January 5, 2017, Director’s Delegate Rogers determined that an Appeal does not stay the expenses process, and that it is usually more efficient to conduct the Expense Hearing before the Appeal, so that any issues arising from the expenses decision could be rolled into the Appeal. Any question of expenses enforcement could be addressed if it arises. The Appeal is ongoing.
Mr. Du seeks his expenses in the amount of $10,547.70. Mr. Yen submitted that the general principle is that the Act3 is to receive such fair, large, and liberal constructions and interpretation as will best ensure the attainment of the object of the Act according to its true intent, meaning, and spirit. Arbitrator Killoran emphasized in Shreet and RBC General Insurance Company4 (citing Smith v. Co-Operators General Insurance Company5) that the statute and its regulations must be interpreted in a purposive fashion that gives meaning to the remedial nature of the legislation.
The Applicant reviewed the criteria I may consider under Rule 75.2 of the DRPC in determining an award of expenses.
The Applicant submitted that Criterion 1 (each party’s degree of success in the outcome of the proceeding) should be omitted from consideration given that the matter is under Appeal. In any event, a lack of success at Arbitration does not automatically make the Applicant responsible for the Insurer’s expenses. The Applicant cited Arbitrator Killoran in Shreet that the relationship between Insurer and Insured is a contractual one, and while changes to the Expense Regulation have moved to a more results-based approach, the approach cannot be entirely results-based or the legislative purpose of the Act could be undermined.
With respect to Criterion 2 (written offers to settle), the Applicant submitted that Security National’s offer to settle should be given little or no weight. In particular, he submitted that the written offer(s) set out in the Insurer’s February 18, 2015 letter exemplified somewhat sharp practice. Security National’s counsel offered to settle Mr. Du’s claim on a full-and-final basis in a graduated (decreasing) scale as follows:
$2,500.00, expiring February 24, 2015 at 5:00 pm;
$2,000.00, expiring February 26, 2015 at 3:00 p.m.; and
$1,500.00, expiring 7 days prior to the Pre-Hearing at 5:00 p.m.
The Applicant submitted there was little or no principled basis for this graduated and decreasing scale.
On August 18, 2016, Security National’s counsel again offered to settle Mr. Du’s claim on a full-and-final basis, or alternately to settle the issues in dispute for a lesser amount. The Applicant submitted that the offer was open for acceptance for only a very short period of time, until August 23, 2016 at 5:00 p.m.
The Applicant submitted that in Chen v. TD General Insurance Company,6 Arbitrator Tanaka criticized the same senior counsel as in the present case for having extended a full-and-final offer that was unlikely to have covered the Applicant’s costs, much less to have addressed any risk of her recovering some part of her actual claim.
With respect to Criterion 3 (whether any novel issues were raised in the proceeding), the Applicant submitted that it had raised novel issues during the subject proceeding, including particularly:
Whether a treating chiropractor is permitted to provide opinion evidence at an Arbitration Hearing on the applicability of the MIG; and
Whether the Respondent can take no steps to respond to a cost of an attendant care assessment and completion of a Form 1 because it was not submitted via a Treatment and Assessment Plan (OCF-18).
With respect to Criterion 4 (the conduct of a party or a party’s representative that tended to prolong, obstruct, or hinder the proceeding), the Applicant’s representative again referred to Arbitrator Tanaka’s decision in Chen, which involved the same senior counsel as the present case. There, Arbitrator Tanaka noted the following about the conduct of Insurer’s counsel:
TD sent two Counsel to the Arbitration Hearing, one a 2006 call and one a 2013 call. Both participated fully in the hearing. When an objection was to be raised on behalf of TD, too frequently both Counsel objected on different grounds. Arbitration Counsel was frequently faced with both Opposing Counsel participating in submissions and objections. The issues in the case were not complex or out of the ordinary, but the defence was spirited and lengthy, appeared at times oppressive, and accomplished little. The intent may have been to distract Arbitration Counsel or to disrupt the Applicant’s case, and the effect was to lengthen the proceedings.
Mr. Yen submitted that the same dynamic was present in this subject case, in that Security National’s counsel made frequent objections and even interrupted him during his closing arguments.
With respect to Criterion 5 (whether any aspect of the proceeding was improper, vexatious, or unnecessary), the Applicant submitted that Security National’s counsel made improper and demeaning remarks against him, specifically that during his closing arguments, Mr. Kerr repeatedly equated the Applicant to a lowly animal, namely a duck. The Applicant submitted that no human being should be called such a thing.
Mr. Du seeks costs in this matter including 14 hours each of attendance at the Arbitration on the part of senior counsel ($1,719.93) and junior counsel ($1,527.82). The Applicant submitted that in Chen, Arbitrator Tanaka observed that it was clear from the conduct of the Insurer’s senior counsel that the case was training for junior counsel, and held that the Applicant should not be saddled with the costs of the Insurer’s training. The Applicant was troubled by Security National ignoring the dictum of Arbitrator Tanaka in submitting fees for junior counsel’s attendance at this Arbitration Hearing, and submitted that a strong message should be sent to punish Security National for acting with such blatant disregard for the law and the authority of FSCO.
With respect to the disbursements the Insurer claimed, the Applicant submitted that permissible disbursements are provided for in the Schedule to Section F of the Expense Regulation. He submitted that several of Security National’s disbursements were improper and therefore not payable.
With respect to Dr. Michael Boucher, Security National claimed travel time in the amount of $600.00 for Dr. Boucher to attend at the Arbitration Hearing. The Applicant submitted that Arbitrator Feldman in Scanlan and St. Paul Fire & Marine Insurance Company7 made clear that a witness is not entitled under the Expense Regulation to be compensated for his or her travel time.
The Applicant submitted that Section 5(3) of the Schedule to Section F of the Expense Regulation states that the maximum amount that may be awarded for attendance of an expert witness is $200.00 per hour of attendance, up to a maximum of $1,600.00 per day. Subsection (4) states that the amount payable by an Insurer to an expert witness for preparation at a Hearing at which the witness testifies is limited to a maximum of $500.00. Accordingly, he submitted that Dr. Boucher’s attendance fee at $3,200.00 was excessive. Moreover, he submitted that a fee of $508.50 for a “telephone consultation” and fee of $4,794.12 for “file review and prep” were excessive.
Arbitrator Sampliner in D.F. and Wawanesa Mutual Insurance Company8 did not allow court reporter’s fees, holding that these fees do not fall within the specific items in the Expense Regulation and are not a reasonably necessary expense to fairly conduct a Hearing. Similarly, Arbitrator Tanaka in Chen held that the cost of a court reporter is not properly recoverable as it is not listed as an authorized expense in the Schedule to the Expense Regulation and the cost is not a generally acceptable expense. Accordingly, he submitted that the court reporter’s fee in the amount of $1,142.44 sought was not payable.
Arbitrator Tanaka in Chen also held that mileage by Respondent’s counsel was not payable because the Arbitration Hearing was held in Toronto and counsel’s office was in Toronto. Accordingly, the Applicant submitted that mileage disbursements in the amount of $22.80 per day for two days were not payable. The Applicant’s representative was troubled by Security National’s counsel ignoring the dictum of Arbitrator Tanaka in submitting mileage disbursements.
Security National—Reply
Security National submitted that the degree of success in the outcome of a proceeding is a key factor to consider, and that it was 100% successful on all of the issues in dispute spoke to the merits of its position.
Security National disagreed with the Applicant’s suggestion that its offers to settle exemplified sharp practice, and suggested such allegations were unfounded and improper and should be taken into my consideration. Security National’s initial offers in February 2015 were made months in advance of the Pre-Hearing. They were prepared to encourage early file resolution, and to avoid the costs associated with filing the response, proceeding to a Pre-Hearing and ultimately Arbitration. This could not be said to “exemplify sharp practice”, and given the outcome these costs could have been wholly avoided by the Applicant. In August 2016, Security National again tried to resolve the matter. The offers were served on August 18, 2016 and were open for acceptance for 8 days. Counsel had more than a week to discuss these offers with his client. The Applicant should have taken one of those offers, and had he done so, he would have been in a better position than having proceeded with the Arbitration.
Security National submitted that the novel issues allegedly raised in the Arbitration were not novel, but rather issues raised in the Applicant’s Appeal and irrelevant to the expenses of the Arbitration.
With respect to the conduct of a party or party’s representative, Security National submitted the Applicant was attempting to blur the line between zealous advocacy and civility. A lawyer is required to conduct themselves with integrity and advocate to the best of their abilities on behalf of their client. Advocacy requires making objections at times, as may be deemed right and proper by the Trier of Fact. Security National submitted it made few, if any, improper objections, and I overruled very few of them. Its position was that at all material times, its counsel conducted themselves with integrity and professionalism.
Security National submitted that there was no evidence to support the assertion that one of its two lawyers was sent for training purposes. If Mr. Kerr had to prepare and conduct this Arbitration alone, he would have had to spend more time preparing and his additional costs would have been similar to those incurred by Mr. Levin, but at the higher Legal Aid rate. Furthermore, it is not uncommon or unusual for two lawyers to attend at Arbitrations and trials.
Security National added that Mr. Yen’s fees only began on October 4, 2016, the day before the Arbitration. Given that Mr. Yen’s costs of $4,908.01 appeared to represent his costs for only 3 days (October 4-6), it was hard to appreciate his argument that the Insurer’s costs were unreasonable—its claim of $17,908.86 represented fees associated in handling the file for 602 days (February 12, 2015 to October 6, 2016), not just 3 days.
Security National took exception to the allegation that its counsel referred to the Applicant as a “lowly animal, namely a duck”. Security National submitted that in its closing, Mr. Kerr used two common expressions respecting the MIG—one of them was the “duck test: if it looks like a duck, walks like a duck, quacks like a duck, then it is probably a duck”. Security National submitted the duck test is a well-known expression, and has been referenced in various jurisprudence.
Security National submitted it was unclear why the Applicant’s counsel was raising Arbitrator Tanaka’s cost award in Chen as a reason for denying costs in this instance. It submitted that Chen was a much different file, with different evidentiary complexities and arguments, and that further discussions on the topic were improper or irrelevant in this forum.
Security National submitted that the court reporter attendance fee was not an improper out-of-pocket expense, given that the Applicant was relying on it themselves in the Appeal of the decision.
Analysis
First, respecting the Applicant’s submission that the regulations must be interpreted in a purposive fashion that gives meaning to the remedial nature of the legislation, I agree to an extent, but I take greater guidance from the common approach to statutory interpretation that specific rules take precedence over general principles. The Act, Schedule, and DRPC are comprised of a large number of specific rules intended to apply specifically to matters such as these.
Criterion 1—Each party’s degree of success in the outcome of the proceeding
The Applicant has asked that I omit the parties’ degree of success from consideration given that the matter is under Appeal. But this is directly contrary to the appellate-level direction of Director’s Delegate Rogers. Director’s Delegate Rogers specifically advised the parties that an Appeal does not stay an Expense Hearing, and that it is normally most efficient to conduct the expenses matter first so that any issue arising from it can be rolled into the Appeal of the decision itself.
Arbitrator Killoran’s comment in Shreet itself acknowledged that changes to the Expense Regulation over time have moved to a more results-based approach.
In my experience, the parties’ degree of success in the outcome of a proceeding is commonly the most important criterion Arbitrators apply. I see no reason to depart from that in this case.
Criterion 2—Written offers to settle made in accordance with Rule 76
The Applicant has asked that I give Security National’s offers to settle little or no weight, and submitted that Security National’s written offers exemplified somewhat sharp practice. I disagree on both points. I find the written offers very relevant. A major part of the dispute resolution scheme is encouraging fast and cost-effective resolution of issues in dispute. The potential cost consequences of losing at a Hearing are known to all who regularly appear before the Tribunal, and one of the purposes of those consequences is undoubtedly to help encourage settlement beforehand.
Security National’s offers were intended to resolve the dispute between itself and the Applicant before most of the costs ultimately incurred became necessary. I accept Security National’s submission at face value that 79% of the costs it incurred were incurred following August 18, 2016, which could have been avoided had the offer been accepted. This is significant. I do not understand the Applicant’s objections to the graduated scale of the offers, because if the Applicant had accepted any of the offers, he would have been better off. All of the offers were for greater than $0.
Criterion 3—Whether novel issues were raised in the proceeding
I reject the Applicant’s argument that novel issues were raised during the proceeding. The issues in dispute were straight-forward and common.
The Applicant’s main assertion on point is that there was a novel question respecting whether a treating chiropractor is permitted to provide opinion evidence at an Arbitration Hearing on the applicability of the MIG. With respect, that is a mischaracterization of what took place. What took place was an application of Rule 42 of the DRPC. That Rule, respecting expert witnesses, states as follows (emphasis mine):
42.2 If a party intends to call an expert witness to present evidence at a hearing, that party must serve and file a document setting out the following:
(a) the full name, address and qualifications of the expert witness; (b) the subject matter of the testimony to be presented; and (c) the substance of the facts and opinion which the witness will present.
The time lines and requirements set out under Rule 39 and Rule 41 apply.
42.3 Where a party does not comply with the requirements of this Rule, an arbitrator may exclude a witness from the hearing or make such other order as the arbitrator considers just.
Rules 39 and 41 state, in part, as follows:
39.1 Subject to Rule 39.2, all documents, reports (including experts’ reports) and assessments to be introduced at a hearing by either party must be served on the other party at least 30 days before the first day of the hearing. … 39.3 The hearing arbitrator will determine the relevance, materiality, and admissibility of evidence submitted at the hearing, but will not admit evidence at a hearing that:
… (c) was not served on the opposing party in accordance with Rules 39.1 and 39.2, unless the hearing arbitrator is satisfied that extraordinary circumstances exist to justify an exception.
41.1 Each party must provide the other parties with the names of witnesses that the party intends to call and the names of persons the party requires to attend for cross-examination on a report, at least 30 days before the first day of the hearing. … 41.3 An arbitrator may:
(a) excuse a witness from attending at the hearing, if the witness was not identified at the pre-hearing under Rule 33, or notified at least 30 days before the first day of hearing under Rule 41.2; or
(b) make such other order as the arbitrator considers just.
It is clear from these rules that if the Applicant wished to call Dr. Palantzas in the capacity of an expert witness, then he had to advise the Insurer of this at least 30 days prior to the Hearing, and provide specified information on point. The Applicant failed to do this. Accordingly, I determined that Dr. Palantzas could not qualify as an “expert” for the purposes of this proceeding, as the rules relating to expert witnesses had not been followed. She was still permitted to testify as a non-expert witness. As I made clear to all present, this distinction had nothing to do with Dr. Palantzas’ qualifications, and was strictly a matter of the Applicant’s failure to comply with Rule 42. That result could likely have been easily avoided. This was far from being a “novel” issue, but was rather a straight-forward application of plainly-written rules.
Criterion 4—Conduct of a party or a party’s representative that tended to prolong, obstruct, or hinder the proceeding
I accept that Security National made a number of objections during the case, but for the most part, I did not find them improper. In my opinion, they were well within the bounds of professional advocacy.
I note that the Hearing itself was originally scheduled for three days (October 5-7), but ended up being concluded in two (October 5 & 6). While this could be partly ascribed to the withdrawal of the attendant care issue in dispute, I nonetheless find that any conduct by either party did not have the effect of prolonging the proceeding.
Criterion 5—Whether any aspect of the proceeding was improper, vexatious, or unnecessary
I do not take issue with two representatives attending for Security National during the Hearing. The Applicant himself sent two representatives on the first day, and has claimed attendance expenses for 14 hours for both counsel despite the fact only one representative attended the second day. I do not see how it would be appropriate to attempt to apply Arbitrator Tanaka’s comments respecting the Chen matter to this one. I was not present for the Chen proceeding, and as such, cannot compare the two matters. But I note that even in Chen, Arbitrator Tanaka still determined in the result that Security National was entitled to significant expenses.
The “duck” allegation is, to me, the most novel aspect of this entire proceeding to date. From memory alone, I accept Security National’s submission that Mr. Kerr’s comment was “if it looks like a duck, walks like a duck, quacks like a duck, then it is probably a duck.” I took this assertion to basically mean that everything about the case looked like a MIG situation, and I should interpret it as such. I am willing to accept Security National’s submission at face value that the statement was not intended to imply that the Applicant was, in fact, a duck.
I grant Security National’s expenses claim, subject to the removal or reduction of certain items and amounts that are improper.
Respecting the $508.50 call to Dr. Boucher, under Section 4.1 of the Schedule to Section F of the Expense Regulation long-distance telephone expenses may be awarded. Unfortunately, this amount was not broken down between what portion was for long-distance fees, versus what was for preparation of an expert witness (covered by another provision) or respecting legal fees of the lawyer on the call (covered by another different provision). I have difficulty accepting that Security National incurred $508.50 of long-distance charges between Toronto and Burlington. Given the lack of breakdown of what the amount was for, I am not granting any of this expense.
Per Section 5.3 of the Schedule to Section F of the Expense Regulation, the maximum amount that may be awarded for the attendance of an expert witness is $200.00 per hour of attendance, up to a maximum of $1,600.00 per day. Dr. Boucher only attended on one day. Thus, the $3,200.00 claimed is excessive. I am prepared to grant the full one-day maximum of $1,600.00 for Dr. Boucher’s attendance. Although his testimony did not take the full day, I am aware that he was waiting in the reception area for considerable time. But I accept the Applicant’s assertion that Dr. Boucher’s travel time should not be compensated further on top of the $1,600.00 amount. I also accept, per Section 5.4 of the Schedule to Section F of the Expense Regulation, that the amount of expenses paid on behalf of an insured person to an expert witness for preparation for a Hearing at which the witness testifies is limited to a maximum of $500.00. Therefore, the Dr. Boucher “file review and prep” amount of $4,794.12 is excessive. While the Insurer’s submission is unclear respecting how the expenses for Dr. Boucher add up, I find that the appropriate amount compensable respecting Dr. Boucher is $500.00 for preparation and $1,600.00 for attendance, for $2,100.00 total. I am unaware why HST ought to be applicable on this amount and no submission was made on point.
I grant the $22.80/day in mileage expenses for Mr. Kerr. Section 6.2(a) of the Schedule to Section F of the Expense Regulation states that the maximum travelling expenses that may be awarded for a person for an Arbitration taking place in the municipality in which he/she resides is the amount incurred each day for his/her necessary attendance at the Hearing. I accept that Mr. Kerr’s attendance was necessary and the claimed amounts reasonable.
I concur with the decisions presented to me that the court reporter is not a recoverable expense. A court reporter is not a specifically-allowed expense anywhere in the Schedule, and I do not consider it an “out-of-pocket expense incurred in furtherance of the arbitration”, per Section 4.4 of the Schedule. To the extent the transcript of the Hearing is helpful to the parties in furthering an Appeal, then to me that is a position that is relevant concerning expenses of the Appeal itself, not the initial Hearing.
I accept that the summons and process server fees are properly compensable.
Accordingly, the disbursements I grant are as follows:
Dr. Boucher—summons fee: $80.72
Dr. Boucher—preparation and attendance: $2,100.00
Mr. Kerr—mileage: $45.60 ($22.80 x 2)
Centurion—process server: $125.43
TOTAL: $2,351.75
Respecting the legal fees claimed, the Legal Aid rates claimed are accurate. However, Security National claimed 46 hours of work specifically for preparation for the Arbitration, which lasted 14 hours. The ratios commonly granted for preparation time to Hearing time are between 1:1 and 4:1, with 4:1 being on the high end for complex cases. This case was not complex, and a ratio of 3.28:1 is being sought (i.e., 46:14). Even accepting that some of the preparation must have been for the withdrawn attendant care issue and regarding Ms. Li Jing, this ratio still seems excessive. I am willing to grant a 2:1 ratio instead. I do accept that most of the costs were incurred after the Applicant’s rejection of the Insurer’s offers to settle. Accordingly, I prorate the legal fees for the preparation period by 60.87% (the fraction of 2 relative to 3.28), so the $4,535.88 claimed is converted to $2,760.97 (a $1,774.91 reduction), and the HST on that amount is reduced from $589.66 to $358.93 (a $230.73 reduction). The total of those two reductions is $2,005.64. Subtracting this reduction from the Insurer’s total legal fees claimed of $10,582.81 ($9,365.32 plus $1,217.49 HST) results in awarded legal fees (including HST) of $8,577.17. Adding the $2,351.75 of disbursements that I grant generates a total award of $10,928.92, all inclusive.
March 27, 2017
Benjamin Drory Arbitrator
Date
Financial Services Commission des
Commission services financiers
of Ontario de l’Ontario
Neutral Citation: 2017 ONFSCDRS 93
FSCO A15-000871
BETWEEN:
LESLIE DU
Applicant
and
SECURITY NATIONAL INSURANCE CO./MONNEX INSURANCE MGMT. INC.
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:
- Security National is entitled to its expenses in the amount of $10,928.92, inclusive of HST and disbursements.
March 27, 2017
Benjamin Drory Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule - Effective September 1, 2010, Ontario Regulation 34/10, as amended.
- R.R.O. 1990, Reg. 664: Automobile Insurance.
- Insurance Act, R.S.O. 1990, c. I.8.
- Shreet and RBC General Insurance Company, FSCO A05-002602.
- Smith v. Co-Operators General Insurance Company, 2002 SCC 30, [2002] 2 S.C.R. 129.
- Chen and TD General Insurance Company, FSCO A14-003818.
- Scanlan and St. Paul Fire and Marine Insurance Company, FSCO A08-000882.
- D.F. and Wawanesa Mutual Insurance Company, FSCO A05-000779.