Financial Services Commission of Ontario
OFFICE OF THE DIRECTOR OF ARBITRATIONS
Neutral Citation: 2018 ONFSCDRS 114 Appeal: P16-00017
Appellant: Guarantee Company of North America Respondent: Segrid Cumberbatch
Before: David Evans
Representatives: Rose Bilash for Guarantee Company of North America A. Fabio Longo for Mrs. Segrid Cumberbatch
Hearing Date: By written submissions received by January 9, 2018
APPEAL EXPENSES ORDER
Under section 283 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 Regulation 664, R.R.O. 1990, as amended, it is ordered that:
- Guarantee Company of North America shall pay Mrs. Cumberbatch her legal expenses of the appeal proceedings herein, fixed at $30,000, inclusive of disbursements, HST, and the preparation for this appeal expense hearing.
June 12, 2018
David Evans Director’s Delegate
REASONS FOR DECISION
I. NATURE OF THE APPEAL
Guarantee Company of North America appealed the order of Arbitrator Mutch dated January 28, 2016, that Mrs. Segrid Cumberbatch, Guarantee’s insured, was catastrophically impaired within the meaning of the SABS–1996.1
Guarantee submitted that when the proper legal test was applied and the evidence was considered in that context, Mrs. Cumberbatch’s various abilities lead to the conclusion that she was not catastrophically impaired.
However, in a decision dated September 21, 2017, I found that the Arbitrator had applied the proper legal test and that it was not my role to make my own findings on the evidence in substitution of his findings.
Mrs. Cumberbatch now seeks her legal appeal expenses.
II. BACKGROUND AND ANALYSIS
The sole issue at the arbitration hearing was whether Mrs. Cumberbatch sustained a catastrophic impairment due to a mental or behavioural disorder. The Arbitrator noted the definition of catastrophic impairment (CAT) under s. 1.2(g) of the SABS: an impairment that, in accordance with the American Medical Association’s Guides to the Evaluation of Permanent Impairment, 4th edition, 1993 (the “Guides”), results in a class 4 impairment (marked impairment) or class 5 impairment (extreme impairment) due to mental or behavioural disorder. The only domain at issue was deterioration or decompensation in work or work-like settings, sometimes referred to as adaptability.
The Arbitrator noted Guarantee’s reference to the abilities Mrs. Cumberbatch had shown. However, he found that this did not override the evidence showing that, even with support, Mrs. Cumberbatch was significantly impeded in her day-to-day activities and in what ought to be regular, routine activities. Accordingly, he found she was catastrophically impaired.
Guarantee requested leave to appeal and a stay of the Arbitrator’s order.
Mrs. Cumberbatch did not dispute the request for leave to appeal but did dispute the stay request and provided submissions. I acknowledged the appeal and denied the stay request.
Guarantee alleged over 20 errors made by the Arbitrator in his reasons. It served nearly 50 pages of written submissions, including nearly 500 pages of case law, secondary sources, reports, correspondence and other supporting documents. Mrs. Cumberbatch’s responding submissions were approximately as lengthy. Guarantee filed a reply of an additional 15 pages of submissions and 34 cases.
The parties then attended at the offices of FSCO to make oral submissions.
In the result, I denied the appeal. I noted that Guarantee’s submissions consisted of a highly granular review of the evidence, always ending with the conclusion that the Arbitrator erred by applying a quantitative conception of the test. However, I found that Guarantee’s submissions reflected a complete misunderstanding of the role of an appeal. I noted that appeals are only on questions of law and that there is no longer provision for a rehearing. I noted that there was no case law supporting Guarantee’s position that I could adduce additional evidence beyond the record. I further noted that there is now no test for disturbing factual findings based on a “serious error.” Therefore, I rejected the proposition behind all of Guarantee’s submissions, namely that I should review all the exhibits, including the medical reports and videotapes, as well as the untranscribed oral evidence, and make my own findings of fact.
As to the only real issue of law raised by Guarantee, I found that the Arbitrator did not misdirect himself when he stated that a marked impairment means that the individual is impeded in more than just “some” useful functioning. I found that he was applying a contextual or qualitative assessment, since he specifically considered the description of adaptability and had cited what the Guides say about it.
Since I found the Arbitrator did not misdirect himself, and since it was not my role to weigh the evidence, I find it was not necessary for me to engage in a close review of the evidence or the detailed submissions regarding it.
I denied the appeal and affirmed the Arbitrator’s order.
Ms. Cumberbatch now seeks her expenses of the appeal. The appeal hearing proceeded by way of written submissions. Along with her submissions and case law, Mrs. Cumberbatch provided detailed dockets of the time spent by each person involved in the file. Guarantee provided its submissions but no dockets for comparison, and Mrs. Cumberbatch provided a Reply, including a revised Bill of Costs.
Rule 75.1 of the Dispute Resolution Practice Code provides that an adjudicator may award expenses if an award is justified under the criteria listed in Rule 75.2, and Rule 75.2 provides that the adjudicator will only consider those criteria in making an award. The first criterion is “each party’s degree of success in the outcome of the proceeding.”
Mrs. Cumberbatch was entirely successful in this appeal, both in resisting the request for a stay and in the substance of the appeal itself. I do not consider my acknowledgment of this appeal from an interim order a “success” for Guarantee, since it was not opposed and it was more efficient to proceed with the appeal.
As to the quantum of the relief sought, the disbursements total about $7,000. Guarantee does not dispute the disbursements, which relate mostly to photocopying.
However, the total expenses claimed does not add up. The subtotal in the revised Bill of Costs including disbursements comes to $30,290.88, with HST of $3,937.81. The total claimed is $41,317.07 – clearly an error. The corrected total is $34,228.69.
Guarantee disputes the claimed $150 hourly fee for Ms. Kristy Kerwin. Rule 78 provides that an hourly rate up to the $150 may be awarded where an adjudicator is satisfied that a higher amount than the legal aid rate is justified. It submits that there is no legal precedent for junior counsel receiving the maximum rate except as lead counsel. However, Ms. Cumberbatch submits that Ms. Kerwin, while a 2012 call to the bar, has practiced exclusively in the area of accident benefits and catastrophic impairments, particularly the law on mental/behavioural impairment. She also performed the bulk of the preparatory work. I find that in these circumstances the higher rate is justified.
As to the overall expenses claim, Guarantee submits that the averages set out in Bains and RBC General Insurance Company, (FSCO P09-00005, September 8, 2010) are still useful, and that the majority of more recent awards are in the $4,000–$7,500 range. It also submits that no cases support the proposition that costs should act as a deterrent to insurers.
However, in Bains itself, Delegate Blackman noted that the award of expenses on appeal is a caution against excess and poor choices. As noted above, the whole basis of Guarantee’s appeal was misguided.
Furthermore, Guarantee does not address other factors such as the complexity of the appeal or the importance of the issues to the insured.
For instance, while I did not deal with Guarantee’s submissions in detail, Ms. Cumberbatch had to respond to those complex submissions. Further, while Guarantee did not provide its dockets, I am prepared to infer they would be at least as long as those of Ms. Cumberbatch, given that her counsel had to take considerable time to respond to the submissions.
In addition, the matter was of great importance to Mrs. Cumberbatch. Without the finding of catastrophic impairment, she could not have claimed any attendant care or housekeeping benefits beyond the 104-week mark. That is, without the finding, her claim for accident benefits would have been essentially over.
However, as has been frequently said, there is no need for a line-by-line assessment. I also find that the amount of time devoted to preparing for the expense hearing seems somewhat high.
Accordingly, I find that a reasonable award for the legal appeal expenses is $30,000.
June 12, 2018
David Evans Director’s Delegate
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.