FSCO Expenses Awarded after Late Withdrawal

March 11, 2016

In Shaazil Khan v. State Farm Automobile Insurance Company FSCO A13-014868, Arbitrator Charles Matheson awarded expenses against the claimant after a withdrawal two weeks prior to arbitration.

The subject accident occurred on April 26, 2011. The claimant was a 6-year old minor. Fractures were allegedly sustained as a result of the accident but were unsupported by the medical evidence. Objective evidence of impairment was absent. The disputed issues on the Application for Arbitration included attendant care and non-earner benefits.

An Assessment of Attendant Care Needs (Form 1) endorsed 24 hour supervision in the monthly amount of $3,300.00. The insurer’s responding Form 1 concurred with the level of supervision on the basis that such supervision was ordinarily required for 6-year old children, not on the basis of any accident injuries. The claimant’s representative failed to produce proof of incurred expenses.

The claim for non-earner benefits was untenable as the minimum age requirement for the applicability of the said benefits is age 16.

The claimant’s representative withdrew the application on December 18, 2015. Arbitration was scheduled for January 4 to 6, 2016. Counsel for State Farm Mutual Automobile Insurance Company, Nicholaus de Koning, pursued expenses.

Arbitrator Matheson quoted the applicable criteria for expenses under Rule 75 of the Dispute Resolution Practice Code including the following:

(d) 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.

Arbitrator Matheson then referred to the discretion of the arbitrator in withdrawal disputes under Rule 70.3:

70.3 Where a party does not agree to the withdrawal, an adjudicator may

(a) permit the withdrawal on such terms and conditions as he or she considers just;

(b) award expenses to either party as permitted by Rule 75 and following.

Payment was ordered in the amount of $3,172.50, inclusive of HST and adjusted at Legal Aid Rates, for the costs of two senior lawyers, a junior associate and two law clerks. The expenses were to be paid by the claimant’s litigation guardians.

The take-away: withdraw before it is too late. Cost consequences may follow from untimely withdrawals of meritless claims. It is reasonably expected that this decision in addition to all decisions under the Financial Services Commission of Ontario, though not binding, will guide and inform future decisions under the Licensing Appeal Tribunal.


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