While the intent is not for double recovery, and it is hoped that all parties would act honourably, the automobile insurer is responsible for the full cost of expert reports that meet the criteria outlined in section 12(2) of Reg.664 of The Insurance Act.
Elaiathamby and State Farm Mutual, FSCO Appeal P08-00035, April 7, 2011 – David Evans
In the original decision, the arbitrator held that only 50% of the costs of the expert reports should be allowed, as the same reports were being used in the tort proceedings. In the appeal, this decision was overturned for the following reasons:
1. Subsection 282(11) of the Insurance Act does not allow for adjustments based on whether recovery is available in another proceeding.
2. In practice, double recovery is unlikely, as arbitration and appeal decisions are public and available for review in the tort proceedings.
3. Being the insurer of last resort does not apply to legal expenses incurred in arbitration.
As a result, the insured was able to recover the full amount of expenses for the expert reports.
What Does This Mean for You?
Assuming the expert reports fall within the criteria outlined in section 12(2) of Reg. 664, regardless of the other uses the insured may have for the reports, it appears that they would be a covered expense in arbitration.