Neutral Citation: 2018 ONFSCDRS 12 FSCO A16-000428

BETWEEN:

SONIA CARLETTI Applicant

and

AVIVA GENERAL INSURANCE COMPANY, FORMERLY RBC GENERAL INSURANCE COMPANY Insurer

DECISION ON EXPENSES

Before: Arbitrator Deborah C. Anschell

Heard: By written submissions dated October 27, 2017, November 3, 2017 and November 10, 2017

Appearances: Mr. Allan Chapnik for the Applicant Mr. Petros Yannakis for the Insurer

Issues:

The Applicant, Ms. Sonia Carletti, was injured in a motor vehicle accident on November 8, 2014 and sought accident benefits from Aviva General Insurance Company ("Aviva") payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Ms. Carletti, 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.

The Hearing was scheduled to take place in Toronto for four days commencing on October 17, 2017.

The issues to be dealt with at the Hearing were the following:

Is Ms. Carletti entitled to receive a medical benefit for services proposed by Health Bound Health Network, detailed as follows: a) $4112.37 for Therapy, Multiple Regions from April 17, 2015 to date and ongoing denied on April 30, 2015; b) $1330.00 related to an April 20, 2015 OCF-18 for Assistive Devices, denied May 5, 2015; c) $1791.26 related to an April 24, 2015 OCF-18 for Chiropractic and Massage, denied May 11, 2015?
Is Ms. Carletti entitled to receive a medical benefit for services proposed by Excel Medical Diagnostics, detailed as follows: a) $3142.11 related to a March 7, 2015 OCF-18 for Assistive Devices, denied May 11, 2015; b) $2503.25 less any monies paid related to an April 30, 2015 OCF-18 for Home Modifications and Expenses, denied May 22, 2015?
Is Ms. Carletti entitled to receive a medical benefit for services proposed by Health Bound Health Network, detailed as follows: a) $1758.38 for physical rehabilitation from October 7, 2015 to date and ongoing submitted on October 7, 2015; b) $3753.22 for physical rehabilitation from October 7, 2015 to date and ongoing submitted on October 7, 2015?
Is Ms. Carletti entitled to attendant care benefits at the rate of $3000.00 per month less amounts paid for services provided by Health Bound Health Network from November 14, 2014 to the date of the Hearing and ongoing?
Is Aviva liable to pay a special award because it unreasonably withheld or delayed payments to Mr. Carletti?
Is Aviva liable to pay Ms. Carletti's expenses in respect of the arbitration?
Is Ms. Carletti liable to pay Aviva's expenses in respect of the arbitration?
Is Ms. Carletti entitled to interest for the overdue payment of benefits?

The Hearing did not proceed as scheduled. The Applicant withdrew the Application for Arbitration the day before the scheduled Hearing.

The issue in this Expense Hearing is:

What is the amount of expenses that should be awarded to Aviva?

Result:

Aviva is entitled to its expenses in the amount of $12,751.76.

EVIDENCE AND ANALYSIS:

Under subsection 282(11) of the Insurance Act (as reiterated in Rule 75.2 of the Dispute Resolution Practice Code ("DRPC")), an Arbitrator shall consider only the following 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;
Whether novel issues are raised;
The conduct of a party or the party's representative;
Whether any aspect of the proceeding was improper, vexatious or unnecessary.

Both parties provided detailed written submissions with respect to the issue of Expenses. Mr. Yannakis is seeking $15,274.64 for fees and disbursements, at Legal Aid rates.

Mr. Yannakis submitted that the Applicant attempted to bluff the Insurer into making an offer to settle the issues, with no intention of pursuing these issues at an arbitration hearing. His view is that the Applicant's actions were improper, vexatious and unnecessary. Mr. Yannakis submitted that the Applicant never intended to proceed with the Hearing.

It would have been appropriate for the Applicant to withdraw the issues at some point between the Pre-Hearing and 30 days prior to the Hearing. The majority of the expenses were incurred within the last two weeks before the Hearing.

Further, the withdrawal of the issues rendered the Insurer completely successful with respect to the outcome of the proceeding. The Insurer is therefore entitled to the entirety of the expenses that it is seeking.

In response, Mr. Chapnik submitted that no arbitration expenses should be awarded to Aviva due to its own conduct. Mr. Chapnik submitted that Aviva failed to obtain a CAT assessment on a timely basis. The Applicant's intent was always to achieve a full and final settlement.

Mr. Chapnik detailed that at the first settlement teleconference held on October 4, 2017 the Applicant, in order to accommodate Aviva's as yet unscheduled Insurer Examinations and to further the mutual stated goal of a full and final settlement, proposed withdrawing the Application for Arbitration from FSCO and reinstituting the proceedings, if necessary, at the LAT at a later date.

Aviva rejected the Applicant's proposed withdrawal plan, and refused to negotiate settlement of the issues in dispute in the Arbitration. Further, Aviva would only negotiate a full and final settlement, offering $4500 all inclusive. The Applicant, therefore, withdrew her Application after the last effort to resolve the Arbitration failed.

Mr. Chapnik therefore submitted that Aviva should be awarded no arbitration expenses as it refused to discuss settlement of the issues in Arbitration on any terms.

Further, the Applicant first proposed withdrawing the proceedings on October 4, 2017. Aviva's counsel only began preparing for the Arbitration on October 6, 2017.

Mr. Chapnik also submitted that no arbitration expenses should be awarded because the Applicant is impecunious and any award at all would be a hardship.

In his reply, Mr. Yannakis submitted that after October 4, 2017, the first suggestion that he received that the Applicant would not be proceeding was October 16, 2017 at 3:00 p.m. From October 10 to October 16, 2017, Applicant's counsel led Aviva to believe that he was proceeding with the Hearing.

Aviva was entitled to proceed in preparing for the Hearing from October 6 to the 16, given the Applicant's representations that she would be proceeding with it.

On balance, I find that Aviva was entitled to prepare for the Hearing. There was no clear indication that the Hearing would not proceed until the day before it was scheduled to commence. The correspondence attached as Tab 2 of the Aviva's Reply Cost Submissions reflects that the parties were preparing for the Hearing on October 10, 2017. On this basis, I agree with Mr. Yannakis when he states that had he not prepared for the Hearing on faith that the Applicant was not intent on proceeding with it, he would be negligent.

I have considered the draft Bill of Costs prepared by the Insurer. I find Mr. Yannakis' claim to 56 hours of preparation time to be reasonable. This represents approximately 7 days to prepare for a four-day Hearing. Similarly, the amounts sought by the law clerks are not excessive.

Mr. Yannakis is seeking a witness preparation fee for Dr. Prendergast in the amount of $3217.50 and for Mr. Sharma in the amount of $523.68. These are both excessive according to the DRPC. The preparation amount is limited to $500.00. I am therefore reducing the preparation fees for both of these witnesses to $500.00 per witness.

The financial status of the Applicant is not a factor to be considered. I have no evidence before me with respect to the Applicant's current financial status.

I am allowing the total fees inclusive of HST in the amount of $8830.28. I am reducing the disbursements to $3470.34. The HST on these disbursements is $451.14.

EXPENSES:

Total expenses payable to the Insurer by the Applicant inclusive of fees and disbursements are $12,751.76.

January 11, 2018

Deborah C. Anschell Arbitrator

Date

Financial Services Commission of Ontario