( Disponible en anglais seulement )
The recent FSCO Arbitration decision of Yeboah and Economical Mutual Insurance Company (FSCO File No. A11-003130, May 21, 2015) gives hope to insurers, and counsel for insurers, with respect to costs (referred to as “expenses” at FSCO).
This hearing on expenses was further to Arbitrator Wilson’s dismissal of Ms. Yeboah’s claim on January 13, 2014. Ms. Yeboah claimed that she was involved in a motor vehicle accident on November 14, 2009. When confronted at the Pre-Hearing by an engineering report that suggested there was no accident, Ms. Yeboah’s counsel withdrew his representation and Ms. Yeboah did not attend the hearing. It was determined that her claim had no substance, and was effectively “concocted for the sole purpose of obtaining undeserved accident benefits from Economical”.
Rule 75 of the Dispute Resolution Practice Code (DRPC) allows an adjudicator to award expenses if justified, according to certain criteria. Arbitrator Wilson placed importance on Ms. Yeboah’s unsuccessful claim, and having failed to attend the hearing on May 15, 2013.
The policy regarding expenses is that they are based on amounts set out in the appropriate Legal Aid tariff, rather than on a full indemnity basis. The insurer’s counsel’s time was recognized at $111.37, the maximum under the Legal Aid rate.
In a rather unusual but noteworthy fashion, Arbitrator Wilson also allowed the expense claimed for mileage and parking as reasonable under the circumstances of this case. Ms. Yeboah resides in Toronto. Mr. de Koning and Economical are both based out of Kitchener-Waterloo. Arbitrator Wilson found that Ms. Yeboah should have anticipated this potential cost, since she chose to insure herself with a company located in Kitchener-Waterloo. At no time did Ms. Yeboah or her former counsel object to Economical’s choice of out-of-town counsel. In this particular case, counsel’s time to travel was not claimed. Based on Arbitrator Wilson’s reasoning, presumably this also would have been compensable on the same basis, had it been claimed.
Interestingly, Arbitrator Wilson’s decision is at odds with other decisions, such as Arbitrator Feldman’s decision in Daoud Seyed and Federation Insurance (FSCO File No. A07-002110, November 23, 2009). Arbitrator Feldman noted that he saw “no reason why an applicant (even an unsuccessful one) should have to pay a greater amount because the insurer has chosen to retain counsel who lives outside the area where the proceedings are being held. While the Expense Regulation permits an insurer to claim for its counsel’s travel expenses (i.e. disbursements for mileage and other out-of-pocket expenses, there is no similar provision with respect to legal fees during travel…” Other decisions, such as that of Arbitrator Renahan in Mrs. S and Economical (FSCO File No. A08-001275, December 14, 2010) and Arbitrator Sone in Abdala-Amin and Guarantee Company of North America (FSCO File No. A03-000395, May 25, 2005) had denied recovery of mileage for out of town counsel as not reasonable.
Arbitrator Wilson’s decision suggests that in certain circumstances, an insurer may be awarded expenses for travel for their out-of-town counsel. Certainly, the behaviour of the claimant in this instance was questionable, but at the very least, this decision gives hope to insurers that reasonable expenses will not go unnoticed.
