Financial Services Commission of Ontario
Financial Services Commission des Commission services financiers of Ontario de l’Ontario
Neutral Citation: 2019 ONFSCDRS 13
FSCO A12-001531
BETWEEN:
FERNANDO VEGA Applicant
and
CERTAS DIRECT INSURANCE COMPANY Insurer
DECISION ON EXPENSES
Before: Anne Sone
Heard: Final written submissions were received August 10, 2018
Appearances: No one appearing for Mr. Vega David Murray for Certas Direct Insurance Company
Issues:
The Applicant, Fernando Vega, was injured in a motor vehicle accident on August 12, 2010. In a decision dated December 1, 2015, I dealt with his claims for statutory accident benefits under the Schedule.1 I dismissed his claims for an income replacement benefit and a special award, while reserving on the issue of expenses:
The issue in this further hearing is:
- Is Mr. Vega or Certas Direct Insurance Company entitled to their expenses incurred in respect of this arbitration hearing?
Result:
- Certas Direct Insurance Company is entitled to its expenses in the amount of $21,387.48, inclusive of fees, disbursements and applicable H.S.T.
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 664,2 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:
Certas Direct Insurance Company (Certas) was entirely successful in the hearing. Mr. Vega’s claims for an income replacement benefit and a special award were dismissed.
(b) Any written offers to settle made in accordance with Rule 76:
There were no written offers to settle in this proceeding.
(c) Whether novel issues are raised in the proceeding:
Neither party suggested that novel issues were raised in the proceeding. I find that there were no novel issues raised in the Arbitration.
(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:
Certas alleges that some of the conduct of Mr. Vega and/or his representatives was unnecessary and prolonged the proceeding.
(e) Whether any aspect of the proceeding was improper, vexatious or unnecessary:
Neither Certas nor Mr. Vega submitted that any 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 outcome that Certas was entirely successful in the Arbitration hearing, I find that Certas is entitled to its expenses of 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:
For all services performed before an arbitration, appeal, variation or revocation hearing.
For the preparation for an arbitration, appeal, variation or revocation hearing.
For attendance at an arbitration, appeal, variation or revocation hearing.
For services subsequent to an arbitration, appeal, variation or revocation hearing.
3(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(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.
Insurer’s Claim for Expenses:
In its Bill of Costs, Certas claimed $23,965.85 for fees and $3,115.56 for H.S.T. on fees at Legal Aid rates. It also claimed $5,666 for disbursements and $736.58 for H.S.T. on disbursements.
Analysis and Findings:
The overriding consideration in fixing arbitration expenses for legal fees is reasonableness.
The Arbitration in this matter was heard over seven days on December 9, 10, and 11, 2013 and February 21, June 6, September 5, and November 21, 2014. There were 33.35 hours of hearing time.
During the Arbitration Hearing, Mr. Vega testified in person, but did not call any other lay or expert witnesses. Certas called two expert witnesses: Dr. Osama Gharsaa (orthopaedic surgeon) and Dr. Marc Mandel (psychologist). In addition, various documents were filed and referred to, including correspondence, various OCF forms, insurer’s examination reports and other medical productions, and documentation from Mr. Vega’s pre-accident and post-accident employers.
Fees:
In terms of the hearing time, Arbitrator Makepeace confirmed in Henri and Allstate Insurance Company of Canada3, 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.
Although the case was not overly complex, Mr. Vega raised numerous arguments that Certas was obliged to deal with. Accordingly, I find that 2:1 is an appropriate ratio here.
The Arbitration hearing took 33.35 hours of hearing time. Accordingly, I allow 66.7 hours for preparation time. I find that Certas is entitled to a total of 100 hours for preparation and hearing time.
According to the Bill of Costs, Certas had a number of counsel who worked on this file; however the majority of the work was done by Mr. David Murray, at the Legal Aid rate of $136.41 per hour. Accordingly, I find that Certas is entitled to $13,641, plus H.S.T. of $1,773.33, for its fees in this case.
Disbursements:
Certas claims $5,666 for disbursements and $736.58 for H.S.T. on disbursements.
Under subsection 5(3) of the Dispute Resolution Expenses 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) of the same Regulation, $500 is the maximum amount that may be awarded for preparation for a hearing of an expert witness at which this witness testifies. Certas has claimed these amounts for its two expert witnesses, and I allow these disbursements.
Certas has claimed conduct money in the amount of $249.03 for four potential witnesses who were not called. As it is not allowed under the Dispute Resolution Expenses Regulation (the Regulation), I do not allow this disbursement.
In addition, the Regulation does not allow for the costs of a court reporter. As a result I do not allow this disbursement in the amount of $131.
I find that the remaining disbursements are payable. Therefore, I find that $5,285.97 in disbursements and $687.18 for H.S.T. on these disbursements are payable to Certas.
Conclusion:
For the reasons set out above, I order Mr. Vega to pay to Certas in respect of the Arbitration proceeding, its expenses fixed at $21,387.48, inclusive of fees, disbursements and applicable H.S.T.
March 11, 2019
Anne Sone Arbitrator
Date
Financial Services Commission of Ontario
Financial Services Commission des Commission services financiers of Ontario de l’Ontario
Neutral Citation: 2019 ONFSCDRS 13
FSCO A12-001531
BETWEEN:
FERNANDO VEGA Applicant
and
CERTAS DIRECT 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:
- Mr. Vega pay Certas’ expenses in the amount of $21,387.48, inclusive of fees, disbursements and applicable H.S.T.
March 11, 2019
Anne Sone Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
- Schedule to R.R.O. 1990, Reg. 664, made under section 282 (11) of the Insurance Act, as amended.
- (OIC A-007954, August 8, 1997).