Dispute Resolution Services Services de résolution des différend of Ontario de l’Ontario

Neutral Citation: 2020 ONFSCDRS 11

A14-007171

BETWEEN:

SHELLEY GUAY

Applicant

and

ROYAL & SUNALLIANCE INSURANCE COMPANY

Insurer

Heard: By telephone conference call on March 2, 2020; written submissions completed April 21, 2020

Decision By: Maggy Murray

Appearances: Shenthuran Subramaniam for Ms. Guay

Arthur Camporese and Christine Baily for Royal & Sunalliance Insurance Company

Issues:

The Applicant, Shelley Guay, was involved in a motor vehicle accident on February 26, 2010. Arbitrator Anita Idemudia conducted a three day arbitration hearing in this matter in September 2017. On August 16, 2018, Ms. Idemudia left the Financial Services Commission of Ontario (which Dispute Resolution Services of Ontario was formerly known as until June 7, 2019). On August 12, 2019, this file was assigned to me by John Lobo, the Director of Arbitrations. I received the transcripts of the hearing on September 26, 2019.

In a decision dated December 18, 2019, I dismissed Ms. Guay’s claims for caregiver benefits from September 6, 2012 onwards while reserving on the issue of expenses.

The issue in this further hearing is:

Is Royal entitled to its expenses incurred in respect of this arbitration hearing?

Result:

Ms. Guay shall pay to Royal its expenses of this proceeding, fixed in the amount of $18,000.00 inclusive of all legal fees, disbursements and HST.

EVIDENCE AND ANALYSIS:

Royal seeks its arbitration costs for the following:

$20,199.69 Legal fees¹ (counsel and law clerk), inclusive of HST on legal fees (HST = 13%)

+ 3,820.00 Disbursements² inclusive of HST on the disbursement (HST = 13%)

$24,019.69 TOTAL³

Royal did not calculate the above legal fees in accordance with the hourly rates set by the Legal Aid Services Act, 1998,⁴ which it was required to do pursuant to Rule 78 of the Dispute Resolution Practice Code – Fourth Edition.

II. BACKGROUND AND ANALYSIS

Dispute Resolution Practice Code – Fourth Edition (the Code):

Rule 75.2 of the Code contains the criteria for determining entitlement to expenses. Those criteria are:

(a) each party's degree of success in the outcome of the proceeding; (b) any written offers to settle made in accordance with Rule 76; (c) whether novel issues are raised in the proceeding; (d) 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; (e) whether 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; and (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.

Rule 76 of the Code states:

76.1 An adjudicator will consider an Offer to Settle in connection with an award of expenses provided that:

(a) it was made in writing, was served on the other parties and contains:

(i) the full terms of the Offer to Settle; (ii) the date when the Offer was served and the time period during which it remained open for acceptance (emphasis added).

(b) the Offer was made after the conclusion of mediation and before the conclusion of the hearing, with particular consideration given to any Offer served after the conclusion of the pre-hearing discussion or preliminary conference as the case may be, up to 5 days before the commencement of the hearing.

Rule 78 of the Code states:

78.1 The maximum amount that may be awarded to … an insurer for legal fees, is an amount calculated using:

(a) the hourly rates established under the Legal Aid Services Act, 1998 for professional services in civil matters before the Ontario Superior Court of Justice;

(b) the hourly rate referred to in Rule 78.1(a) adjusted to include, where

appropriate, the experience allowance established under the Legal Aid

Services Act, 1998.

Where an adjudicator is satisfied that a higher amount for legal fees to an insured person is justified, an hourly rate of up to $150 may be awarded (emphasis added).

78.2 The maximum amount that may be awarded to an insured person or an insurer for agent’s fees is an amount calculated using the hourly rates established under the Legal Aid Services Act, 1998 for law clerks, articling students and investigators.

In Henri,⁵ Arbitrator Makepeace stated that “[t]he overriding consideration in fixing arbitration expenses is reasonableness.” A line-by-line assessment of the expenses claimed is not appropriate.⁶ Instead, a global assessment of reasonable expenses should be made.⁷ The award of costs should not be so high as to deter an Applicant from accessing the dispute resolution process at FSCO, nor should it penalize him for doing so. In addition to a costs award being reasonable, it must also be fair.⁸

Legal Fees

Royal claimed expenses⁹ for the following representatives:

Arthur R. Camporese – Called to the Bar, 1984¹⁰ → $136.43/hr x 69.9 hours = $9,536.46

Danielle Lecours – Called to the Bar, 2014¹¹ → $109.14/hr: 10.8 hours = $1,178.71

Kristen Bailey – Called to the Bar, 2017 → $ 109.14/hr: 40.5 hours = $4,420.17

Christine Ellis – Called to the Bar, 2019¹² → $109.14/hr: 5 hours = $545.70

Joanna D’Amico – Licenced Paralegal → $32.37/hr x 0.4 hours = $12.95

Ashley Rosa – Licenced Paralegal → $32.37/hr x 33.8 hours = $1,094.11

Jennifer Lyne – Law Clerk → $32.37/hr x 4.3 hours = $139.19

The above is a total of 126.2 lawyer hours, 34.2 paralegal hours and 4.3 law clerk hours. The amount of time spent by lawyers, paralegals and a law clerk based on the legal aid rate is $16,927.29.

Disbursements

Royal claimed $3,820.00 in disbursements for the following:

DISBURSEMENTS

AMOUNT

Photocopies – Motion for Third Party Productions (3 copies x 101 pages x $0.35/page)

$ 106.05

Mileage to Serve Motion Record on Children Family Services (January 15, 2017)

$ 55.20

Fee for Surveillance Records and DVDs

$ 217.75

Invoice from Penfound’s Inc. for Court Reporter for Hearing held on September 26, 28, and 29, 2017

$2,752.68

Photocopies – Written Submissions of the Insurer and Book of Authorities (3 copies x 237 pages x $0.35/page)¹³

$ 248.85

SUB-TOTAL

$3,380.53

HST (13%)

$ 439.47

TOTAL DISBURSEMENTS

$3,820.00

Court Reporter and Transcript Fees[^14]

Included in Royal’s list of disbursements was $2,752.68 for court reporting services.¹⁵ Ms. Guay did not dispute this cost.¹⁶

Section 4 of the Expense Regulation,¹⁷ found at section F of the Code, states:

The amount of the following disbursements made by or on behalf of the insured person or the insurer may be awarded:
For long distance telephone, facsimile and other telecommunication charges.
For typing, printing and reproducing copies of documents.
For the delivery, by mail or courier, of items relating to the arbitration, appeal, variation or revocation hearing.
For other out-of-pocket expenses incurred in furtherance of the arbitration, appeal, variation or revocation hearing.
Any applicable taxes paid in respect of the expenses referred to in this section (emphasis added).

According to the ejusdem generis rule of statutory construction (also known as the "limited class rule"), where the legislation sets out a list of items followed by a general term, the scope of the general term may be limited to a class to which the specific items belong.¹⁸ Director’s Delegate Makepeace found that:

As a general rule, when a general provision in a statute or regulation follows a list of specific provisions, the general provision refers to items in the same class as the class to which the specific items belong.¹⁹

The limited class rule has not been discussed in the context of s. 4 of the Expense Regulation. In my opinion, court reporter and transcripts fees fall within the same class as the expenses contemplated by s.4 items 1-3 of the Expense Regulation. Although decisions of the Director or his delegates are binding upon arbitrators,²⁰ pursuant to the limited class rule, Driver and Ghandi,²¹ I find that court reporter and transcript costs are “other out-of-pocket expenses” incurred in furtherance of an arbitration, appeal, variation or revocation hearing under s.4 of the Expense Regulation.

In the alternative, if I am incorrect about court reporter and transcript fees based on the limited class rule, although prior cases at the Financial Services Commission of Ontario and Dispute Resolution Services of Ontario have not awarded disbursements for having a court reporter attend the arbitration hearing²² or transcripts,²³ those cases are distinguishable from this case because the arbitrator who conducted this arbitration hearing did not write the arbitration decision. I wrote the arbitration decision based on the transcripts. Therefore, the transcripts were necessary. Consequently, I have awarded $2,752.68 for the court reporter’s fee.

(a) Each Party’s Degree of Success:

The first criterion for an expense award pursuant to Rule 75.2 of the Code is success. Royal was completely successful in the three day arbitration hearing with respect to all claims and Ms. Guay was not.²⁴ On this basis alone, Royal is entitled to its expenses.

(b) Offers to Settle:

(i) Ms. Guay’s Offer to Settle

Nine days before the arbitration hearing, Ms. Guay made Royal an Offer to Settle²⁵ her claims on the basis that Royal:

i. Reinstate Ms. Guay’s caregiver benefits retroactive to September 6, 2012;

ii. Royal pay Ms. Guay interest, together with interest less $100;

iii. Royal pay Ms. Guay’s legal costs and disbursements in an amount to be assessed; and

iv. The offer remained open for acceptance until one minute after the hearing began.

Ms. Guay’s Offer to Settle required Royal to pay her everything she claimed, less $100. It was not a compromise. She did not “beat” her offer.

(ii) Royal’s Offer to Settle

Six days before the arbitration hearing, Royal made an Offer to Settle²⁶ Ms. Guay’s claims on the basis that Royal pay Ms. Guay $8,842.09 for two treatment plans, dated May 1 and August 17, 2012, and assistive devices recommended in a treatment plan dated August 17, 2012, less any money that Royal paid previously towards these items.

Ms. Guay rejected Royal’s Offer to Settle, which was better than what Ms. Guay was awarded in the arbitration hearing.²⁷

(c) Novel Issues:

Royal did not address this factor in its written submissions. Ms. Guay submitted that there were no novel issues²⁸ and I agree.

(d) and (e) The Conduct Of A Party Or A Party's Representative That Tended To Prolong, Obstruct Or Hinder The Proceeding; Whether Any Aspect Of The Proceeding Was Improper, Vexatious Or Unnecessary:

According to Royal the following factors prolonged, obstructed and hindered the proceeding and were improper, vexatious or unnecessary:

i. Ms. Guay resisted the production of her Family and Children’s Services (FCS) records for over two years and required Royal to bring a third party motion for them;²⁹

ii. The material in the FCS records showed that Ms. Guay’s two children, for whom she was claiming caregiver benefits in the amount of $300 per week, had not lived with her since October 2011, although Royal paid her caregiving benefits until September 2012.³⁰

I find that the above prolonged and obstructed the proceeding. It was improper for Ms. Guay to resist production of her FCS, which necessitated Royal bringing a motion for production of them.

(f) and (g):

Neither of these criteria are relevant to this proceeding.

Expenses

Neither party provided its dockets and accounts to determine the reasonableness of the expenses.

Royal shortened the length of the arbitration hearing by not calling any expert witnesses.

Arbitrators have allowed expenses for ratios of hearing time to preparation of between 1:1 and 4:1 for preparation for hearing time to the actual hearing time.³¹

An average arbitration hearing day lasts approximately six hours.³² The arbitration hearing in this matter was three days x 6 hours per day = 18 arbitration hearing hours.

I find that Royal is entitled to the following based on the complexity of the file:

i. One senior counsel (Mr. Camporese) for the hearing and preparation time at a ratio of 3:1³³ which I reduced to 69.9 hours which is the number of hours Mr. Camporese spent on the file;

ii. One junior counsel for the arbitration hearing plus preparation work at a ratio of 1:1 (36 hours);³⁴

iii. Thirty law clerk hours.

Based on the above, the following legal fees are reasonable:

69.9 hours x $136.43/ h for Mr. Camporese = $9,536.46

36 hours for one junior counsel x $109.14/h = $3,929.04

30 law clerk and paralegal hours x $32.37/h = + $ 971.10

Total legal fees: $14,436.60

Having considered the criteria in the Code, outlined above, the time spent, the applicable Legal Aid rates, the complexity of this matter, the written submissions of the parties, the supporting documentation filed, for the reasons set out above, I find it appropriate to fix Royal’s expenses at a rounded fee of $18,000.00 (inclusive of all fees, disbursements and HST: $14,436.60 for legal fees + $3,820 for disbursements) and to order Ms. Guay to pay this amount to the Royal.

June 10, 2020

Maggy Murray Arbitrator

Date