Segrid Cumberbatch v. Guarantee Company of North America, 2018 ONFSCDRS 159

Financial Services Commission of Ontario Commission des services financiers de l’Ontario

Neutral Citation: 2018 ONFSCDRS 159

FSCO A11-001210

BETWEEN:

SEGRID CUMBERBATCH Applicant

and

GUARANTEE COMPANY OF NORTH AMERICA Insurer

DECISION ON EXPENSES

Before: Anne Sone

Heard: By telephone conference calls on April 13, 2018 and June 15, 2018. Final written submissions received on July 11, 2018

Appearances: A. Fabio Longo and Kristy Kerwin for Mrs. Cumberbatch Alexander Neaves for Guarantee Company of North America

Issues:

The Applicant, Segrid Cumberbatch, was injured in a motor vehicle accident on May 22, 2008. In a decision dated January 28, 2016, Arbitrator Mutch dealt with her claims for statutory accident benefits under the Schedule.¹ Arbitrator Mutch determined that Mrs. Cumberbatch was catastrophically impaired, while reserving on the issue of expenses.

Director Delegate Evans confirmed Arbitrator Mutch’s decision on appeal.

The issue in this further hearing is:

1. Is Mrs. Cumberbatch or Guarantee Company of North America entitled to expenses incurred in respect of this arbitration hearing, and if so, in what amount?

Result:

1. Mrs. Cumberbatch is entitled to her expenses incurred in respect of the arbitration hearing, in the amount of $51,679.28, inclusive of fees, disbursements and HST.

EVIDENCE AND ANALYSIS:

Entitlement to Expenses:

Pursuant to subsection 282(11) of the Insurance Act:

The Arbitrator may award, according to criteria prescribed by the regulations, to the insured person or the insurer all or part of such expenses incurred in respect of an Arbitration proceeding as may be prescribed in the regulations, to the maximum set out in the regulations.

The criteria an adjudicator shall consider when deciding whether to award expenses are found in Ontario Regulation 664, in Rule 75.2 and Section F of the Dispute Resolution Practice Code (Fourth Edition — Updated January 2014). I will discuss each of these criteria in order.

(a) Each party’s degree of success in the outcome of the proceeding:

Mrs. Cumberbatch was entirely successful in this proceeding.

(b) Any written offers to settle made in accordance with Rule 76:

There were no formal written offers to settle in this proceeding.

(c) Whether novel issues are raised in the proceeding:

Mrs. Cumberbatch submitted that Dr. Rosenblatt’s testimony regarding single mothers raised a novel issue; however, this was not described as a novel issue by Arbitrator Mutch and I find that novel issues were not raised in this proceeding.

(d) The conduct of a party or party’s representative that tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders:

Based on the parties’ submissions, I find that there was no conduct by either a party or a party’s representative that tended to prolong, obstruct or hinder the proceeding.

(e) Whether any aspect of the proceeding was improper, vexatious or unnecessary:

Based on the parties’ submissions, I find that no 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.

Not applicable to this proceeding.

(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.

Not applicable to this proceeding.

Based on the above analysis, I find that Mrs. Cumberbatch is entitled to her expenses, as she was entirely successful in this proceeding.

Amount of Expenses:

Statutory Framework:

The amount of expenses I may award is set out in section 3 of the Schedule to the Expense Regulation (Dispute Resolution Expenses) pursuant to subsection 282(11) of the Insurance Act. It states as follows:

3(1) The legal fees payable by the insured person or the insurer for the following matters may be awarded:

1. For all services performed before an arbitration, appeal, variation or revocation hearing.

2. For the preparation for an arbitration, appeal, variation or revocation hearing.

3. For attendance at an arbitration, appeal, variation or revocation hearing.

4. For services subsequent to an arbitration, appeal, variation or revocation hearing.

(2) The number of hours for which legal fees may be awarded shall be determined by the arbitrator, having regard to the criteria set out in subsection 12(2) of this Regulation.

(3) The maximum amount that may be awarded for legal fees is the amount calculated using the hourly rates set out in the Dispute Resolution Practice Code published by the Ontario Insurance Commission or the Financial Services Commission of Ontario, as it may be amended from time to time.

Mrs. Cumberbatch’s Claim for Expenses:

In her Bill of Costs, Mrs. Cumberbatch originally claimed $68,937 for fees and $30,371.67 for disbursements, plus $12,910.13 for HST for a total of $112,218.80.

Analysis and Findings:

The overriding consideration in fixing arbitration expenses for legal fees is reasonableness.

Fees:

In terms of the hearing time, Arbitrator Makepeace confirmed in Henri and Allstate Insurance Company of Canada,² that “a line-by-line assessment of the expenses claimed is not appropriate. Rather, the Arbitrator should make a global assessment of reasonable expenses.”

As a rule of thumb, Arbitrators have allowed expenses for preparation for hearing time to the actual hearing time on a ratio of between 1:1 and 1:4.

The parties have agreed that due to the complexity of this case the ratio should be 1:4, and I so find.

The hearing took place over eight days. There were also extensive written submissions. After consultation, the parties have agreed that there were 36.5 hours of hearing time. At a ratio of 1:4, that results in 146 hours of allowable preparation time. The parties further agreed that both of

Mrs. Cumberbatch’s counsel³ who attended all of the hearing should be remunerated. I find that these agreements result in allowing 73 hours for Mrs. Cumberbatch’s counsel at the hearing, plus allowing 146 hours for their preparation time. This comes to a total of 219 allowable hours for preparation and hearing time for this proceeding.

Guarantee consented to the $150 hourly rate for Mr. Longo, but objected to that rate for

Ms. Kerwin. Rule 78 of the Code 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.

Guarantee submits that since Ms. Kerwin was called to the bar in 2012, and was not lead counsel on this case, she is not entitled to the $150 hourly rate. Mrs. Cumberbatch submits that

Ms. Kerwin has practiced exclusively in the area of accident benefits and catastrophic impairments, particularly the law on mental/behavioural impairment. Ms. Kerwin also performed the majority of the preparatory work, which contributed to Mrs. Cumberbatch's success. Like Director’s Delegate Evans in the Appeal Expenses Order⁴ pertaining to Arbitrator Mutch’s decision, I agree, and find that in these circumstances the higher hourly rate of $150 is justified for Ms. Kerwin.

Accordingly, I find that Mrs. Cumberbatch is entitled to $37,120.50, inclusive of HST for her fees.

Disbursements:

Mrs. Cumberbatch originally claimed $30,371.67 plus HST for disbursements. Guaranteed submitted, and Mrs. Cumberbatch agreed that some of these disbursements were not justified, Either because they were already covered under another disbursement,⁵ or were for records never served on Guarantee.⁶ Mrs. Cumberbatch then withdrew her claim for these disbursements.

Guarantee also objected to the expert fees Mrs. Cumberbatch claimed for the preparation and attendance of Dr. Zakzanis, psychologist, Ms. Elyse Freedman, occupational therapist and

Ms. Caron Gan, advanced practice nurse and registered psychotherapist.

Under subsection 5(3) of the Dispute Resolution Expense Regulation, the maximum amount that may be awarded for the attendance of an expert witness is $200 per hour of attendance, up to a maximum of $1,600 per day. Under subsection 5(4), the maximum amount of expenses paid to an expert witness that may be awarded for preparation for a hearing at which the witness testifies is $500.

Mrs. Cumberbatch claimed $1,600 for attendance time and $1,000 for preparation time for

Dr. Zakzanis. Based on its notes, Guarantee submitted that Dr. Zakzanis attended the hearing on April 22, 2015. His examination-in-chief started at 10:20 a.m. and was completed at 2:30 p.m., with a 45 minute lunch break. The cross-examination of Dr. Zakzanis started at 2:45 p.m. and was completed at 4:00 p.m. Mrs. Cumberbatch did not refute these submissions. Therefore, I find that Dr. Zakzanis’ attendance at the hearing required approximately 5.5 hours of his time. Accordingly, I award Mrs. Cumberbatch $1,100 for Dr. Zakzanis’ attendance at the hearing and $500 for his preparation time.

Mrs. Cumberbatch claimed $1,600 for attendance time, $500 for preparation time and $500 for a retainer for arbitration for Ms. Freedman. Based on its notes, Guarantee submitted that

Ms. Freedman attended the hearing on February 11, 2015. It states that her examination-in-chief started at 10:15 a.m., and was completed at 1:00 p.m. The cross-examination of Ms. Freeman started at 2:00 p.m., and was completed at 4:00 p.m. Mrs. Cumberbatch did not refute these submissions. Therefore, I find that Ms. Freedman’s attendance at the hearing required approximately five hours of her time. Accordingly, I award Mrs. Cumberbatch $1,000 for

Ms. Freedman’s attendance at the hearing and $500 for her preparation time.

Mrs. Cumberbatch claimed $1,029 Ms. Caron Gan’s expert fees. She submitted that Ms. Gan charged $245 for preparation time and $490 for attendance time. As these amounts are within the Dispute Resolution Expenses Regulation limits, I allow them. However, Ms. Gan also included a previous balance of $294 with no explanation of the charge. I do not allow this charge. Accordingly, I award Mrs. Cumberbatch a total of $735, in respect of Ms. Gan’s preparation and attendance at the hearing.

Mrs. Cumberbatch claimed $500 for arbitration preparation of Dr. Marino. However, Dr. Marino did not testify. Accordingly, I do not allow this disbursement claim.

Dr. Zakzanis also claimed $6,000 for three expert reports. These reports are as follows:

• Neurocognitive / Behavioural Report

• Mental / Behavioural Examination Report

• Psychological CAT Report

Under subsection 5(5) of the Dispute Resolution Expenses Regulation, the maximum amount that may be awarded for the preparation of an expert report is $1,500.⁷ As Dr. Zakzanis’ reports seem to overlap each other, I am allowing $1,500 for the three of them.

In addition, Mrs. Cumberbatch claimed $2,200 for a chronic pain assessment prepared by

KM Medical Management. Since this exceeds the maximum allowable amount under the Dispute Resolution Expenses Regulation, I am reducing it to $1,500.

Guarantee submitted that Mrs. Cumberbatch provided insufficient detail regarding her claims for travel expenses in the amount of $293.63, and for photocopies in the amount of $4,549.60. I agree, and reduce these amounts by half. Therefore, I award Mrs. Cumberbatch $146.82 for travel expenses and $2,274.80 for photocopies.

I find that the remaining revised disbursements totaling $14,558.78 inclusive of HST, are payable to Mrs. Cumberbatch.

Conclusion:

For the reasons set out above, I order Guarantee to pay to Mrs. Cumberbatch her expenses incurred in respect of the arbitration hearing, in the amount of $51,679.28, inclusive of fees, disbursements and HST.

December 28, 2018

Anne Sone Arbitrator

Date

Financial Services Commission of Ontario Commission des services financiers de l’Ontario

FSCO A11-001210

BETWEEN:

SEGRID CUMBERBATCH Applicant

and

GUARANTEE MUTUAL AUTOMOBILE 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 Regulation 664, as amended, it is ordered that:

1. Guarantee Mutual Automobile Insurance Company to pay to Segrid Cumberbatch her expenses incurred in respect of the arbitration hearing, in the amount of $51,679.28, inclusive of fees, disbursements and HST.

December 28, 2018

Anne Sone Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2(OIC A-007954, August 8, 1997).
3. 3Mr. Longo and Ms. Kerwin.
4. 4Guarantee Company of North America and Cumberbatch (Appeal P16-00017, June 12, 2018).
5. 5Invoices for Marcus Bachmann and the Physiatry Assessment report of Shoreham Clinic.
6. 6Peel Regional Officer notes, Motor Vehicle Accident report and Shoreham Neuropsychological assessment.
7. 7I note that under paragraph 25(5)(a) of the Schedule “an insurer shall not pay more than a total of $2,000 in respect of fees and expenses for conducting any one assessment or examination and for preparing reports in connection with it…” Since I am dealing with this issue in the context of a claim for expenses, I find that the maximum of $1,500 for the preparation of an expert report under subsection 5(5) of the Expense Regulation applies.