Neutral Citation: 2018 ONFSCDRS 41 FSCO A15-008364

BETWEEN:

MUHIADIN HUSSEIN Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Insurer

DECISION ON EXPENSES

Before: Arbitrator Jeff Musson

Heard: Written submissions due on December 18, 2017

Appearances: Mr. Essam Elbassiouni for Mr. Muhiadin Hussein Mr. Darrell March for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Mr. Muhiadin Hussein, was injured in a motor vehicle accident on September 6, 2014. There were numerous claims for accident benefits made against State Farm Mutual Automobile Insurance Company ("State Farm"), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mr. Hussein, through his representative, applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c. I.8, as amended.

Arbitrator Gueller conducted the Hearing for this case, in person on September 5, 6 and October 2, 3, 4, 6, 2017, and by written submissions on October 19, 2017. At the Hearing, the Applicant attended and was represented by Mr. Elbassiouni. In addition, Mr. March, counsel representing State Farm, attended.

On the issue of expenses, Arbitrator Gueller ruled that if the parties were unable to mutually agree on expenses, then either party would be entitled to request an Expense Hearing, which State Farm 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 $22,722.12 (inclusive of fees, disbursements and HST).

EVIDENCE AND ANALYSIS:

Introduction

In this Expense Hearing, the Insurer is claiming expenses in the total amount of $22,722.12 including HST, which is comprised of $21,304.31 in fees at the legal aid rate and $1,417.81 in disbursements.

The Applicant was requested to submit his position in regards to expenses in this case by December 18, 2017. No documents were filed with the Commission by this deadline. Further, the Applicant's counsel was contacted after the deadline to confirm the Applicant's position with regards to submissions. No response was received. As a result, I have decided that the Applicant was given ample time in which to respond and, having not received a response, I will proceed to make a decision based on the materials submitted by the Insurer.

Rule 79.1 of the Dispute Resolution Practice Code ("DRPC") states that where an arbitrator has determined all issues in dispute except expenses, and the parties cannot agree on entitlement or amount of expenses, either party may request, in writing, an Expense Hearing within 30 days from the date of the decision on all other issues in dispute. Both parties were prepared, absent an agreement as to expenses, to have the matter determined by me. My jurisdiction to conduct an Expense Hearing is set out in subsection 282(11) of the Insurance Act.²

In addition, an arbitrator shall, under Rule 75.2 of the DRPC, consider only the following six (6) 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 subsection (3).
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

Degree of Success

In its submissions, the Insurer stated that it was 100% successful in defending all of the issues that were in dispute at the Hearing. In addition, there was no ambiguity in terms of its success in this matter. I agree with the Insurer's conclusions and the Insurer was the successful party at the Arbitration based on the decision of Arbitrator Gueller.

Written Offers to Settle

There were no stated written offers to settle this claim prior to the Hearing.

Whether Novel Issues were Raised in the Proceeding

There was no evidence submitted at the Expense Hearing related to novel issues being raised.

Conduct of the Parties and/or Their Representatives to Comply with Undertakings

There was no evidence submitted at the Expense Hearing as to the conduct of the parties related to undertakings.

Whether any Aspect of the Proceeding was Improper, Vexatious or Unnecessary

The Insurer stated that this Arbitration Hearing was unnecessary. As a result, the Insurer takes the position that the Applicant's claims for medical benefits and costs of exams were improper, vexatious and unnecessary. The Insurer submitted the decision by Arbitrator Gueller in support of this position, which reads, in part:

I find that the Applicant failed to prove that he has suffered an impairment or injury directly related to the MVA, or that his pre-existing condition was exacerbated by the MVA.

On a balance of probabilities, I am persuaded that the Applicant's alleged impairments are not related to the MVA. Therefore, he has no entitlement for the requested medical treatments under the Schedule.

CONCLUSION:

This was not an overly complex case but at the same time, it was not a simple case either due to lack of properly filed Applicant's documents. The Insurer had to defend against a claim not knowing what evidence would be produced. In terms of testimony, this case ultimately relied heavily upon the credibility of the Applicant and the presence or lack of corroborating evidence. In the end, the onus is on the Applicant to prove his entitlement to benefits, which he failed to do.

The Insurer put forward the position that its expenses are within the established and well-accepted norms. It submitted the case of Cousineau v. Zurich Insurance Co.³ in support of its position. When assessing expenses in that case, Arbitrator Killoran noted that:

[T]he main criterion in assessing an applicant's claim for arbitration expenses is reasonableness, subject to the rules set out in the expense regulation. An award of expenses is a matter within an arbitrator's discretion, considering all the circumstances of the case. While the Legal Aid Tariff governs the maximum hourly rate applicant's counsel may charge, the Tariff does not restrict an arbitrator's discretion in fixing the number of hours that may be billed. Rather than a "line by line" enquiry into an applicant's claim for expenses, arbitrators should fix a reasonable ballpark figure based on all the circumstances, including the dockets submitted, and the length and complexity of the hearing. The conduct of the parties which may have tended to shorten or lengthen the proceedings is a relevant factor.

Based on these factors, the Insurer submits that the expenses that it is claiming as a result of this Arbitration Hearing are appropriate and reasonable under the circumstances. In addition, they comply with the requirements of the Legal Aid Tariff. As a result, the Insurer claims that unless evidence is presented by the Applicant as to the unreasonableness of the Insurer's expenses, that it should be entitled to the full amount requested in the Bill of Costs, which is only a fraction of the full costs incurred by Insurer because it has been billed at the Legal Aid rate.

I am accepting the disbursement list as presented by the Insurer's counsel for the Hearing. All of the amounts claimed by the Insurer for the Hearing are within the maximum limits permitted under s. 4 of the Expense Regulation.

For all these reasons, I have determined that the Insurer is entitled to its expenses. After considering the complexity of this Arbitration Hearing, the applicable Legal Aid fee structure, written submissions, the supporting documentation filed, and using the amounts permitted under the Expense Regulation as guidance, I find it appropriate to fix the Insurer's expenses at $22,722.12 inclusive of all fees, disbursements and HST.

February 27, 2018

Jeff Musson Arbitrator

Financial Services Commission of Ontario