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
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
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