Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2018 ONFSCDRS 63

FSCO A14-009855

BETWEEN:

JEYANATHAN THANGARAJAH

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

DECISION ON SPECIAL AWARD AND EXPENSES

Before:

Lynda Tanaka, Arbitrator

Heard:

By written submissions completed December 29, 2017

Appearances:

David S. Wilson, Counsel for the Applicant

Michael W. Chadwick, Counsel for the Insurer

Issues:

The Applicant, Mr. Jeyanathan Thangarajah (the “Applicant”), was injured in a motor vehicle accident on September 18, 2013 and sought accident benefits from State Farm Mutual Automobile Insurance Company (“State Farm”), 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 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.

The Applicant suffered serious physical and psychological injuries from a collision between a train and a bus on which he was a passenger. He was 57 years old at the time. The Applicant,

witnessed the death of his bus mate and the carnage that ensured after the incident…During the subject accident he injured his left knee, both shoulders and his lower back. Subsequently he has been diagnosed with a left shoulder full-thickness supraspinatus tear as well as right shoulder full-thickness subscapularis tear, left knee ACL tear and medial meniscus tear… chronic pain, PTSD and depression post-accident.²

Arbitrator Marshall Schnapp issued the Decision on the claims of the Applicant on May 12, 2017. Arbitrator Schnapp found that the Applicant was entitled to a Special Award in an amount to be determined based on further submissions of the parties as well as to the expenses of the Arbitration.

In addition to the injuries suffered in the collision, the Applicant had pre-existing conditions including Diabetes, Type II, and Crohn’s Disease, which had been well controlled, in one instance with medication, but after the accident his conditions worsened. He had to start taking insulin and using immune modulators, Remicade and diet control. The aggravation of his pre-accident conditions led to a rectal bleed and fainting spell.³

The issues in this Written Hearing are:

1. What is the quantum of the Special Award that State Farm is liable to pay to the Applicant?

2. What is the quantum of the expenses that State Farm is liable to pay to the Applicant for the Arbitration?

3. Is either party entitled to its expenses of the Written Hearing?

Result:

1. State Farm is liable to pay a Special Award to the Applicant in the amount of $52,000.00.

2. State Farm is liable for the expenses of the Applicant in the amount of $35,360.45 inclusive of HST.

3. State Farm is liable for the expenses of the Applicant with respect to this written Hearing on the quantum of the Special Award and the Applicant’s expenses in the amount of $4,279.88 inclusive of HST.

EVIDENCE AND ANALYSIS:

Issue 1 – What is the quantum of the Special Award that State Farm is liable to pay to the Applicant?

The Applicant seeks an order for a Special Award in the amount of $119,152.80 with respect to the finding that State Farm withheld the attendant care benefits and $10,000.00 with respect to the withholding of medical benefits, for a total of $129,152.80. State Farm submits that the appropriate quantum is $10,000.00.

Arbitrator Schnapp found that State Farm should have corresponded with the Applicant’s counsel to explain why it was taking the position that the Applicant had failed to prove economic loss. With the documents it had on October 24, 2014, it should have made inquiries and never did. Therefore the Applicant is entitled to a Special Award for the wrongful delay in payment of the attendant care benefits.⁴ Arbitrator Schnapp is no longer available and I will be deciding the issues of the quantum of the special award and the issue of expenses.

With respect to the medical benefits, Arbitrator Schnapp found as follows:

It is my finding that State Farm unreasonably delayed payments for [the Applicant’s] medical benefits – both physical treatment and prescriptions. Ms. Maraj was unable to explain why the treatment plans were not approved which in some sense is understandable as she only became the claims advisor on the file in June 2016…

It is my view that after State Farm was in receipt of the [CAT Impairment Determination Executive Summary Report], it clearly had a duty to reassess the Applicant’s file and specifically look into benefits that had been denied. It is clear that given the injuries he sustained, and his condition as of April 2016, all of the benefits should have been paid and it was not reasonable for State Farm to maintain their denials. It is my finding that State Farm acted in a manner that was imprudent, stubborn and inflexible with respect to the medical benefits being claimed, and thus unreasonably delayed payments of [the Applicant’s] medical benefits.⁵

The Applicant relied on the generally accepted criteria for the calculation of the quantum of the Special Award. The purpose of the Special Award is punitive and also deterrence of both the specific insurer and others from a repetition of such actions in the future. The award should be proportionate to the blameworthiness of the insurer’s conduct, the vulnerability of the insured person, the harm or potential harm directed at the insured person, the need for deterrence, the advantage wrongfully gained by the insurer from the misconduct and any other penalties or sanctions that have been or likely will be imposed on the insurer due to its misconduct.

The Applicant submitted two reports by ADS Forensics Inc. included as Tabs 1 and 2 of the Submissions of the Insured re Quantum of Special Award and Expenses.⁶ The difference between the two calculations is explained in the two reports. The higher calculation set out in the ADS Report is based on the Insurer owing the full $6,000 per month for the full period September 19, 2013 and ongoing until payment is made and the benefit is reinstated. The potential Special Award is calculated as $171,716 for the attendant care alone.⁷ The smaller calculation is contained in the Alternative Report and is based on the Insurer only being responsible for $3,000 per month from September 19, 2013 to December 9, 2015, the date on which the Applicant claimed the catastrophic impairment designation. The amount owing then goes up to the $6,000 benefit. The Alternative Report calculates a potential Special Award of $148,941.⁸

The Applicant requests an award of $137,372.80 or, in the alternative, $119,152.80, each being calculated as 80% of the two alternative calculations of the potential Special Award as determined by the ADS Report and Alternative Report respectively.

In support of his position, the Applicant submits that the total amount of the benefit unreasonably withheld or delayed including interest on attendant care is $230,000 and that a recovery of 80% of the potential Special Award is appropriate given the circumstances of the case.

The Applicant argues that State Farm should have initiated the discussion with the Applicant as to whether or not he wished to pursue a determination that he met the catastrophic impairment eligibility criteria.

The Applicant submits that the attendant care benefit which was found to be unreasonably delayed was withheld over a three year period from the date of the accident until November 1, 2016. The benefit withheld related to an attendant care need documented at an amount in excess of the maximum permitted under the policy. No benefit was paid except the specific invoices submitted by a hired care provider, even though the Applicant’s wife had given up her income-earning to care for the Applicant. The Applicant argues that other factors increase the gravity of the conduct of State Farm in that it failed to acknowledge that in October 2014 it had in fact received proof of incurred expenses and this position was wrongly maintained into the Hearing. He submits that to protect this position, Ms. Maraj gave answers in cross-examination that were simply wrong and not credible. Indeed State Farm did not, even in its closing submissions, abandon its position that the Applicant had not provided proof of economic loss in October 2014. The only mitigating factor that might reduce the Special Award is that most of the arrears were paid by November 1, 2016. The Applicant submits that there is no evidence that State Farm will suffer any other consequences that should be taken into account.

The Applicant also referred to case law in which Special Awards were ordered, including some where the maximum amount was ordered.

Arbitrator Schnapp also found that medical and rehabilitation benefits had been unreasonably withheld. The Applicant submits that some of the benefits were delayed about 2 1/2 years and other were delayed for a lesser period of time. All were paid either on the eve of the Hearing or after the Hearing had commenced.

The amount of the Special Award with respect to those is calculated to be $10,973.00.⁹ Because the amount is relatively small, the Applicant submits that an award closer to the maximum than otherwise would be appropriate and that an award of $10,000 under this heading is appropriate.

State Farm submits that the Special Award should be no higher than $10,000.00 in total. It supports this number by the fact that the attendant care benefits plus interest were paid prior to the arbitration Hearing and the benefit had been reinstated. Also, State Farm had agreed to pay the medical benefits in issue prior to the arbitration and had paid the invoices of the care provider as submitted over the months that they were provided up to and even after the 104 weeks had expired. It also argues that the Special Award should be based on a dollar amount and not on a percentage of the amount owing.

State Farm argues that no finding of fact was made with respect to the veracity of Ms. Maraj’s explanations of the failure to acknowledge that it had the appropriate information in the incurred attendant care expenses in October 2014. It submits that the Applicant’s attack on the credibility of the adjuster is unfair.

In his findings, Arbitrator Schnapp said that he was not persuaded by the legal arguments concerning the interpretation of the Schedule that State Farm relied on to deny the attendant care benefits.¹⁰ Further he drew an adverse inference from the failure of State Farm to call the adjuster who had been in charge of the file at the relevant time who might have been able to explain the denial of the benefits over the time period involved. He wrote:

I must say that I am puzzled by the overall position State Farm has taken in this matter…it began paying some of the benefits a few months before the start of the Hearing… but State Farm continues to maintain the position.. that payment of these benefits was not an admission that the benefits were required to pay.¹¹

He found the testimony of Ms. Maraj “questionable” concerning the reasons State Farm paid the benefits it did in the fall of 2016 and he held that “I am not persuaded by Ms. Maraj’s testimony” on the issue of the documentation to prove economic loss. He also found on the issue of delayed payment of medical benefits, that the adjuster “provided a number of answers, all of which seemed to be incorrect”.¹² While these findings do not state that Ms. Maraj was not credible, in essence, that is what Arbitrator Schnapp has found.

State Farm submits that the Applicant is wrong in his submission that it would have been reasonable for State Farm to make inquiries with respect to the Applicant pursuing a catastrophic designation prior to receipt of an OCF-19. It maintains the position that State Farm is only a responder to the initiatives of the Applicant. But Arbitrator Schnapp specifically found that once State Farm had its own CAT Impairment Determination Executive Summary Report, State Farm had a duty to reassess the benefits and it was not reasonable to maintain the denial of benefits.¹³

State Farm argues that there was only a six-month delay in the payment of the attendant care benefit at the full $6,000.00 per month. It began paying attendant care benefits responding to invoices submitted by a care provider in January 2015, some 16 months after the accident and all such invoices were paid to October 2015, which was beyond the 104-week date. It stopped paying the invoices because the Applicant had not yet submitted his OCF-19 which he did in December 2015. By April 2016 State Farm’s assessors had examined the Applicant and at that time State Farm considered further payments. It was not until September 2016 that any payment was made on account of the outstanding attendant care benefits with interest, and reinstatement of the benefits was made. Therefore, on State Farm’s own sequence of events, the Applicant was without support for attendant care for a year.

State Farm also relies on the mitigating factors, most significantly the payment of 100% of the attendant care benefits and the medical and rehabilitation benefits with interest weeks in advance of the arbitration. Further, it made a sort of “down payment” of $30,000 in September 2016 while it waited to calculate and secure the funds to pay the remaining outstanding benefits.

Finally, State Farm characterizes its handling of the letter of October 2014 in which it was given information to prove economic loss as an error in interpretation. It disputes that it has gained any advantage over the Applicant and agrees that there are no other penalties that ought to be considered in the assessment of the quantum of the Special Award.

State Farm relies on proportionality and rationality as the basis for its position that $10,000 is the appropriate Special Award. An award that is rational is one that is based on the facts of the case and the underlying purposes of the legislation. The award should be no larger than is needed to serve the purpose of punishment and deterrent. Proportionality requires that the award be rationally related to the misconduct at issue. Punishment and deterrence need to be viewed in the context of other insurer behaviour that has led to Special Awards in other cases.

Both parties refer to other cases where Special Awards have been given, with the Insurer focusing on those cases with multiple failures by the insurer and multiple years of delay of benefit but awards at or less than $65,000.

I find that the key criteria on the facts of this case in assessing the amount of the Special Award is the requirement that it be proportionate to the vulnerability of the insured person and the harm or potential harm directed at the insured person. One of the other key factors in this case is that the benefit of the attendant care relates to the living conditions of the Applicant with significant injuries that not only constituted new injuries to his body, and painful ones as well, but that also aggravated serious pre-existing conditions. The delay here, whether counted in three years, as submitted by the Applicant, or six months, as submitted by State Farm, is certainly less in time than the withholding of the death benefit for many years as was the case in Stewart and Liberty Mutual, relied on by State Farm. The difference is that the Applicant (who had to suffer through the period) and his wife (who was providing the attendant care and had given up her work to do so) bore the burden of the failure.

Another key criterion is blameworthiness of the Insurer’s conduct. I find that the delay of six months that finally ended with the $30,000 payment is not well explained by State Farm. The evidence of the adjuster dealt with the transfer of responsibility for the file, assessment of the file, getting approvals from senior levels, her taking a vacation, etc. so that the calculation of the benefit owing and interest was not done in full and approvals obtained even in the period from April to September, thereby necessitating the “down payment” of $30,000.

There is a deterrent aspect that must be respected in the setting of the Special Award so that insurers, when their own assessors support a catastrophic impairment designation, move promptly in their reassessment of denied benefits. The criteria that must be met for such a designation are deliberately high and the raised policy limits are only available to those with the most serious of injuries. The legislation is intended to provide an expeditious dispute resolution process but more importantly it is supposed to ensure that benefits are paid promptly and that was not done in this case. It is trite law that this legislation is consumer protection legislation. As pointed out by Arbitrator Feldman in Melchiorre and Wawanesa Mutual Insurance Company,¹⁴ it is not clear that even the maximum Special Award would be a deterrent for large companies such as State Farm or Wawanesa and,

Too small an award will amount to little more than a “slap on the wrist” or, even worse, a licence to engage in similar conduct in the future.

Therefore I find that State Farm is understating the extent of its failure to meet its obligations to this Applicant and minimizing its obligations. The award needs to be sufficient to provide incentive to insurers to act more promptly than six months. Disruptions in the availability of care can have adverse effects on recovery and lead to very onerous responsibilities on family members that they should not have to bear. Ms. Maraj testified that once an applicant was deemed catastrophic, the file is passed over to a catastrophic claims adviser. She became responsible for the file on June 2, 2016.¹⁵ If State Farm’s processes require a change in personnel dealing with a file once a catastrophic impairment designation is given, that transition must be expeditious to permit the re-examination of benefits promptly, more so than in this case.

ADS Forensics calculated the interest under the Schedule and the Special Award interest. The claim by the Applicant is close to the amount of the Special Award interest and in my view, is too onerous and out of line with the awards of other cases where the handling of the benefits file was filled with more errors of many sorts rather than the one glaring issue on attendant care and the others relating to mischaracterization of the prescriptions and failure to reassess the medical benefits. In my view an award of an amount close to the Schedule interest is proportionate to the harm done to the Applicant and is logical both in its adherence to the criteria for setting the award and in the intended deterrence. Therefore, on the Special Award related to attendant care, I find that the Applicant is entitled to an award of $42,000.00.

With respect to the medical and rehabilitation benefits, I agree with the Applicant that $10,000 is an appropriate amount on the facts of this case, given the nature of the benefits that were delayed and that the quantum is so small as not to constitute a real deterrent unless it approximates the maximum potential award.

I therefore find that the Applicant is entitled to a Special Award totalling $52,000.00.

Issue 2 – What is the quantum of the expenses that State Farm is liable to pay to the Applicant for the Arbitration?

The Applicant seeks a total of $47,935.67 inclusive of HST for his expenses and disbursements.

The total is made up as follows:

Expenses $28,020.00

HST $ 4,047.67

Disbursements $11,304.93

HST $ 1,447.02

The Applicant claims the following time was spent on this Arbitration:

David S. Wilson 186.8 hours

R. Plate (1997 call) 12.1 hours

Student 10.1 hours

Clerk 22.0 hours

The Hearing was conducted over four days, December 19 and 20, 2016 and January 5 and 11, 2017. Of these days, only December 20 was not a full day of hearing but 4.0 hours. The total hours of hearing time was 24.65 hours. The hearing time did not include submissions which were filed in February and March for which the Applicant claims 8.25 hours and 3.75 hours (including Reply submissions) all spent by Mr. Wilson. Once the Decision of Arbitrator Schnapp was issued, the Applicant then undertook the work of calculation of the Special Award claim including retaining expert accounting advice on the total calculation. Counsel spent 18.0 hours on the preparation of the materials on the Special Award and 1.25 hours on the Bill of Costs. The request for expenses therefore includes time for this award.

Of Mr. Wilson’s 186.8 hours, some 73 hours are attributed to 365 letters sent and received by him over the course of the file. Additional time calculated on a “per letter” basis was also claimed for R. Plate.

State Farm submits that the expenses should be no more than $15,000.00 plus disbursements. It agrees to the hourly rate of $150 per hour for counsel but objects to the including of the hours docketed for correspondence (73 hours for one counsel and 8 hours for a second), all charged at 0.2 hours per letter. It submits that the arbitration lasted 24.65 hours and applying a 1:4 ratio yields a total expense of $18,487.05. It objects to the expense for travelling time as not being recoverable and that the disbursements for travel, parking, courier, fax and photocopies have not been supported by particulars.

The Applicant’s Reply has more detail concerning the travel time which was spent by the second counsel, Mr. Plate, going to Ottawa to interview the Applicant and is a cost reduced by the fact that he had other clients in Ottawa. With respect to the hearing time, the Applicant argues that he spent 31.55 hours in preparation of further submissions with respect to the Special Award as well as considerable time on the original Hearing submissions.

I have considered the various relevant criteria from the Dispute Resolution Practice Code (“DRPC”) as set out below. The two criteria related to attendances for examinations under either section 42 or section 44 of the Schedule were not relied on by State Farm and are not relevant.

Criteria 1: Each party’s degree of success in the outcome of the proceeding

The Applicant was successful in his claims, including the Special Award claim.

Criteria 2: Any written offers to settle that were made in accordance with the rules of practice and procedure applicable to the proceeding after the conclusion of Mediation and before the conclusion of the Arbitration

There is no information that written offers were exchanged though the transcript of the evidence indicates that there were settlement discussions at various times referred to in the course of the Hearing without specifics given.

Criteria 3: Whether any novel issues are raised in the proceeding

Neither party takes the position that there were any novel issues raised.

Criteria 4: The conduct of a party or a party’s representative that tended to prolong, obstruct or hinder the proceeding, including the failure to comply with undertakings and orders

The Applicant argues that I should take into account the additional preparation time necessitated as a result of the issues ultimately conceded by State Farm, being the payment of all med/rehab benefits which were claimed and the payment of attendance care arrears in the fall of 2016. There were additional issues added at the Pre-Hearings in 2016 and the State Farm representative testified as to the history of her assumption of the file and the payment of the claims shortly before the commencement of the Hearing on December 20, 2016.

There were only four witnesses in the Hearing and the representative for State Farm testified over a period of two days (half the hearing time). The first day of the Hearing was taken entirely with counsel submissions concerning various issues including the addition of the Special Award claim at the Hearing as well as other issues such as an order excluding witnesses. The Applicant’s daughter testified on the second day and described the Applicant’s condition prior to the accident, his wife’s work history and the Applicant’s post-accident condition. The Applicant and his wife also testified that day. The third and fourth days of the Hearing were held after the holiday and New Year’s break and the vast majority of those two days was spent in the vigorous cross-examination of State Farm’s witness which was key to the success on the Special Award claim. The time taken was prolonged by the refusal by the witness for State Farm to provide correct answers to the questions that were put to her in cross-examination. Arbitrator Schnapp sets out details of the changes in answer that the witness made during her testimony at pages 11 to 15 of the Reasons. There were a number of brief recesses necessitated by disputes, for instance, as to what documents the witness could look at in the stand, the form of questions, and defence of the witness when her answer was interrupted by counsel for the Applicant. There were obvious points when the witness could have and should have agreed with the propositions put in the questions but seemed reluctant to do so. The answers were adverse to the interest of her employer and also a reflection of the fact that many of the decisions on adjusting the file were made by her predecessor. These factors are no answer to the prolonging of the Hearing necessitated by the conduct of the case by State Farm.

Criteria 5: Whether any aspect of the proceeding was improper, vexatious or unnecessary

I do not see any step in the proceeding as falling within this criterion and therefore this criterion is not a factor in my determination of the expenses. There were three Pre-Hearings. In the first, the issues list included medical benefits of around $7,000.00. The second Pre-Hearing dealt with adding prescription medical benefits of just under $5,000.00 and amending the claim for attendant care. The third Pre-Hearing was required because of the Applicant’s request for production of State Farm’s file, the production of which ultimately led to the Special Award claim being added at the Hearing. None of these steps were improper, vexatious or unnecessary.

The remaining criteria under Rule 75.2 of the DRPC are irrelevant to this determination.

The usual ratio for the calculation of legal fees is the ratio of preparation time to hearing time with a range of 1:1 to 4:1 being the usual range. In this case, the expense award must take into account the additional work that had to be done with respect to written submissions and also the Special Award calculation. In my view, State Farm was correct to agree to a 4:1 ratio of the hearing time and preparation but to stop there does not reflect the prolonging of the case by the conduct of State Farm’s witness in testimony and I therefore add to that ratio a reasonable number of additional hours for the written submissions.

Applying the total hearing time of 24.65 hours at the ratio of 4:1 yields 98.6 hours of preparation which, when added to the hearing time and calculated at the rate for Mr. Wilson and his colleague R. Plate, results in a fees amount of $18,487.50. To this should be added additional hours for the written submissions for the Hearing which are noted in the docket for the period January 23 to March 19, 2017. I award a further 10 hours at $150.00 per hour for this work for a total of $1,500.00. The 10 hours represents the equivalent of a half day of hearing time (three hours) if the submissions had been done expeditiously and in person with another seven hours of preparation.

I do not accept the argument of the Applicant that a separate award should be made on a per letter basis. Such an award only encourages correspondence without regard to its purpose or utility and I am unable to assess that on the basis of the Applicant’s submissions. I note that from time to time the dockets note review of correspondence and finalizing letters. There is an element of duplication that is not appropriate. Further I find that the ratio of four hours of preparation for every one hour of hearing time is appropriate on the circumstances of this case which largely turned on the skilful cross-examination of the State Farm representative and not on the mass of correspondence.

The total legal fees awarded is therefore $19,987.50. HST on this amount is $2,598.38. The total amount for the Arbitration on account of legal fees for which State Farm is liable is therefore $22,585.88 inclusive of HST.

With respect to disbursements, the claim of the Applicant is as follows:

Disbursements $11,304.93

HST $ 1,469.64

State Farm disputes the travel expenses that were incurred by R. Plate to travel from Toronto to Ottawa to meet with the Applicant. This cost was divided between three clients and is therefore reduced from what it would be if the travel had solely been incurred for the Applicant. The charges for courier, fax and photocopy are also disputed by the Applicant who submits that he has only claimed approximately one-half of the amount actually incurred.

Travel for counsel to meet with his client is a reasonable expense and the quantum is not excessive. The amounts claimed for courier, fax and photocopy are also reasonable for cases such as this one. In the normal course, an award of disbursements must include a careful review of the supporting documentation and denial of the expenses not supported by invoices. In a case such as this one where the counsel (whether R. Plate or Mr. Wilson) have been active over many years, the disbursements for fax, courier and photocopies are usually computer based data that will not give much more information than that the cost was incurred and charged to the file. Arbitrators do not typically require detailed support as to why each courier or fax or photocopy charge was incurred so long as the amounts fall within a generally accepted range given the claim and its complexity. In my view, the disbursements claimed are reasonable and are therefore allowed in full.

Therefore, State Farm is liable to pay to the Applicant his disbursements in the amount of $11,304.93 and HST in the amount of $1,469.64 for a total of $12,774.57.

State Farm is therefore liable to the Applicant for expenses and disbursements including HST in the amount of $35,360.45.

EXPENSES:

The amount of the Special Award is closer to the number submitted by the Applicant than to that of State Farm by a factor of 5. It is therefore appropriate to award the Applicant his expenses and disbursements with respect to this written Hearing. The Applicant indicated that the time spent on the Special Award was approximately 18 hours and 1.25 hours on the Bill of Costs notes between June 15, 2017 and October 21, 2017. There would have been additional time spent on the review of the State Farm Reponses and the preparation of the Reply material. This amount of time would have been much less than the creation of the original submissions on the Quantum of the Special Award and I therefore allow another 6 hours of time ($900.00 at $150.00 per hour) for that work. Therefore I award the Applicant his expenses in the amount of $3,787.50 (calculated at the hourly rate of $150.00 per hour) plus HST of $492.38 for a total of $4,279.88.

March 26, 2018

Lynda Tanaka

Arbitrator

Date

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2018 ONFSCDRS 63

FSCO A14-009855

BETWEEN:

JEYANATHAN THANGARAJAH

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

ARBITRATION ORDER ON SPECIAL AWARD AND EXPENSES

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. State Farm is liable to pay a Special Award to the Applicant in the amount of $52,000.00.

2. State Farm is liable for the expenses of the Applicant in the amount of $35,360.45 inclusive of HST.

3. State Farm is liable for the expenses of the Applicant with respect to this written Hearing on the quantum of the Special Award and the Applicant’s expenses in the amount of $4,279.88 inclusive of HST.

March 26, 2018

Lynda Tanaka

Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule - Effective September 1, 2010, Ontario Regulation 34/10, as amended.
2. 2Reasons for Decision, Arbitrator Marshall Schnapp issued May 12, 2017 (“Reasons”) at page 5.
3. 3Reasons at page 18.
4. 4Reasons at page 17.
5. 5Reasons at page 18.
6. 6“Interest Calculation & Potential Special Award”, ADS Forensics Inc. Report dated October 19, 2017 (“ADS Report”) and “Interest Calculation & Potential Special Award (Alternative)”, ADS Forensics Inc. Report dated October 19, 2017 (“Alternative Report”).
7. 7ADS Report at section 1.2.
8. 8Alternative Report at section 1.2.
9. 9ADS Report at section 1.2.
10. 10Reasons at page 9.
11. 11Reasons at page 16.
12. 12Reasons at pages 16 and 17.
13. 13Reasons at page 18.
14. 14FSCO A05-00491 and A05-00492, Decision dated April 20, 2007 at page 13.
15. 15Transcript, January 5, 2017, page 9, lines 16 to 24.