Financial Services Commission of Ontario

Neutral Citation: 2018 ONFSCDRS 57 FSCO A12-006732

BETWEEN:

EVERTON BROWN Applicant

and

GORE MUTUAL INSURANCE COMPANY Insurer

DECISION ON EXPENSES

Before: Arbitrator Marcel D. Mongeon Heard: By written submissions completed on January 19, 2017

Appearances: Mr. Stanley Razenberg participated for Mr. Brown Ms. Janet S. Young participated for Gore Mutual Insurance Company

Issues:

The Applicant, Mr. Everton Brown (the “Applicant”), was injured in a motor vehicle accident on February 26, 2011, and sought accident benefits from Gore Mutual Insurance Company (the “Insurer”), 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 under the Insurance Act, R.S.O. 1990, c. I.8, as amended for the motor vehicle accident (“MVA”).

The issue in this Expense Hearing is:

1. What expenses, if any, is either party entitled to?

Result:

1. Expenses of $8,459.47 plus HST of $1,099.73 and disbursements of $17,191.54 are awarded to the Applicant, for a total of $26,750.74, payable forthwith by the Insurer.

EVIDENCE AND ANALYSIS:

This is related to my Hearing decision dated November 30, 2017 in the above-captioned matter. The Applicant was seeking income replacement benefits for both the pre- and post-104 week period following the MVA, attendant care benefits, payment for medical treatments, and payment for assessments. I determined that the Applicant is entitled to receive an income replacement benefit on an ongoing basis, two payments for medical treatments (with one being denied) and payments for three assessments (with three being denied).

The parties were unable to agree on entitlement to the expenses of the Hearing which lasted four days and concluded with written submissions and have sought my determination.

Applicant’s Submissions

The Applicant has made submissions seeking an amount of $27,024.77.

The amount sought includes the work of three lawyers and a law clerk going back to 2015. The rates used are those under the legal aid tariff.

The principal lawyer is shown with 59 hours and two other more senior lawyers with a total of 7 hours. The clerk is shown at 30 hours.

Submissions made on behalf of the Applicant suggest that hearing time should be assessed at 24 hours. Then a ratio of 3:1 should be used for preparation time for a combined total of 96 hours. The Applicant’s submission then suggests that this should be extended on the basis of the appropriate legal aid rates for a total of $8,459.47 plus HST of $1,099.73.

The cases of Salva and Allstate Insurance Company,² Ragulan and Security National Insurance Co.³ and Gogna and State Farm Mutual⁴ are cited to support the proposition that in dealing with allowable hours for a hearing, the actual hearing time can be increased for preparation time by a proportion between 4:1 and 1:1 for preparation time to hearing time.

Disbursements of $17,465.57 are sought by the Applicant as follows:

Clinical Notes and Records (Various) $ 1,468.50 Copying and printing $ 3,154.70 Service $ 624.28 Court reporter $ 242.50 Travel and accommodations $ 658.50 Experts reports $ 5,895.00 Expert witnesses $ 3,272.07 HST $ 1,991.02 Summons to witnesses $ 159.00

The total sought on an all-inclusive basis by the Applicant is $27,024.77.

Insurer’s Submissions

The Insurer has suggested that given the divided success in the Hearing, expenses should not be awarded to either party.

The Insurer points out that although an income replacement benefit was awarded, an attendant care benefit, which was also sought, was not awarded. The Insurer has also suggested that the attendant care benefit had more importance from a financial perspective given the potential for another application dealing with the Applicant’s entitlement to a catastrophic impairment benefit.

The Insurer’s submissions also noted that on medical treatments and assessments, the parties were evenly divided in terms of success.

Analysis

Expenses in an arbitration hearing are governed by Regulation 664, R.R.O. 1990, Automobile Insurance made under the Insurance Act, as amended. Section 12 thereof, as it read immediately before being amended by Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, sets out a number of criteria that an arbitrator shall consider in awarding all or part of the expenses of an arbitration proceeding. These criteria are (with some editing):

1. Each party’s degree of success in the outcome of the proceeding.
2. Any written offers to settle […]
3. Whether novel issues are raised in the proceeding.
4. The conduct of a party or a party’s representative that tended to prolong, obstruct or hinder the proceeding […]
5. Whether any aspect of the proceeding was improper, vexatious or unnecessary.
6. Whether the insured person refused or failed to submit to an examination […]

To respond to each of these criteria in turn, I note:

There was mixed success in the outcome. However, this mixed success does provide the Applicant with a significant income replacement benefit for what could be a lengthy period of time into the future. There was mixed success on various medical and assessment expenses. As submitted by the Insurer, the Applicant has not been found to be entitled to an attendant care benefit. Although other applications which the parties are involved in may have brought a catastrophic impairment designation into play, this was not before me and, therefore, I will only consider the two-year duration of the attendant care benefit.

There were no settlement offers.

There were no novel issues considered by me. Both the determination of the income replacement benefit and the attendant care benefit were made on the basis of straightforward facts.

On the conduct of the parties, there were no factors in which I considered either party prolonged, obstructed or hindered the proceeding.

No aspect of the proceeding was improper, vexatious or unnecessary in my view. Although evidence was led on the attendant care benefit which was ultimately found by me not to be payable, it was reasonable for the Applicant in the facts and circumstances to advance the consideration of the issue.

The Hearing on the benefits payable took four days and concluded in written submissions.

Based on the foregoing, the Applicant is entitled to an expense award. There was mixed success but the Applicant did obtain a significant benefit in the income replacement benefit and the payment of a number of the medical and assessment expenses.

The expense award will be sufficient to provide the Applicant with a partial indemnity of his time and effort in the Hearing and its preparation for the Hearing.

In setting applicable rates for the representative, I am guided by Rule 78 of the Dispute Resolution Practice Code. This provides that the legal aid rates should be used unless, in the case of the Applicant, I am satisfied that a higher rate should be used. Under the foregoing criteria, I find that the normal legal aid rates are appropriate.

In this case, I find that given four days of Hearing and the preparation time involved, the amount sought by the Applicant of $8,459.47 plus HST of $1,099.73 is a reasonable indemnity. I calculate that this matter clearly involved at least 12 eight-hour days or 96 hours. This is based on the four Hearing days that I was part of and an additional eight days of preparation time on the basis of a 2:1 proportion. The amount sought of a total of $9,559.20 (inclusive of HST) represents less than $800 per day which, of course, is well within the legal aid rates applicable for an eight-hour day.

I have also examined the disbursements being sought by the Applicant. I note that in the Applicant’s submissions, adjustments have already been made to some of the disbursements to ensure they fall within the disbursement limits provided. For example, travel expenses and experts’ reports and attendances have been reduced as required. Appropriate receipts and backup for disbursements have also been submitted.

All of the disbursements are reasonable and allowable within the provisions of the Schedule with the exception of $242.50 for court reporter fees. This amount and applicable HST ($31.53) is removed from the amount of disbursements to leave a total of $17,191.54 for disbursements inclusive of HST.

EXPENSES:

Expenses of $8,459.47 plus HST of $1,099.73 and disbursements of $17,191.54 are awarded to the Applicant, for a total of $26,750.74, payable forthwith by the Insurer.

March 15, 2018

Marcel D. Mongeon Arbitrator

Financial Services Commission of Ontario

Neutral Citation: 2018 ONFSCDRS 57 FSCO A12-006732

BETWEEN:

EVERTON BROWN Applicant

and

GORE MUTUAL 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 Ontario Regulation 664, as amended, it is ordered that:

1. Expenses of $8,459.47 plus HST of $1,099.73 and disbursements of $17,191.54 are awarded to the Applicant, for a total of $26,750.74, payable forthwith by the Insurer.

March 15, 2018

Marcel D. Mongeon Arbitrator

Footnotes

1. 1The Statutory Accident Benefits Schedule - Effective September 1, 2010, Ontario Regulation 34/10, as amended.
2. 22007 CarswellOnt 5380 (FSCO Arb.).
3. 32008 CarswellOnt 4540 (FSCO Arb.).
4. 42011 CarswellOnt 5910 (FSCO Arb.).