The Arbitration Option

The Canadian Inter-Company Arbitration Agreement, more commonly known as the Arbitration Agreement, is a formal agreement that has been in place for years. The purpose of the Arbitration Agreement is to provide a quick and informal alternative to litigation of liability and damage disputes on subrogation claims between insurance companies.

The role of the CICMA is to manage this Agreement. Each province has an Arbitration Director that administers the program. As well there is a National CICMA director whose role is to communicate and assist the provincial directors with any issues that may affect the program on a national level.

The program is quite frequently used where auto physical damage claims are still subrogated.

In provinces where physical damage to autos is part of a public insurance scheme or where automobile physical damage subrogation is pre-determined by fault determination rules (as is the case in Ontario) the opportunity to use this process is still available for both personal and commercial property damage.

Typically the types of claims that work well with the Inter- Company Arbitration Agreement are those issues where the average value of the loss is less than the $50,000 limit.

The Arbitrators for losses under $50,000 are picked from the CICMA membership roster and are your peers.

In response to the industry’s concerns about rising litigation costs and the length of time claims are tied up in the court process, the CICMA, in conjunction with the Insurance Bureau of Canada (IBC) Claims Committee and the Canadian Defense Lawyers (CDL) are looking for losses where insurers may be willing to arbitrate that are greater than $50,000 but no more than $200,000. We are currently looking for cases to pilot this idea.

To service this pilot project, we have a roster of Canadian Defense Lawyers who are interested in acting as the Arbitrator for claims with a value between $50,000 and $200,000. To this end we are hoping that insurers will take advantage of this cost saving idea by bringing more complex or higher valued losses to our CDL arbitrators and get the benefit of their legal expertise at a considerably reduced cost when compared to the usual cost of litigation.

For more information on the pilot project with CDL and the types of claims what would fit the pilot project, adjusters can contact the provincial director.

At the CICMA website, adjusters will find a video introduction with an overview about the Inter-company Arbitration Agreement available in both official languages, as well as documents on how to appoint a Pre- Arbitration Officer and formally apply for arbitration. There are also documents outlining the responsibilities as a respondent, as well as the role of the Arbitration Panel along with issues that are outside the mandate of the arbitration agreement www.cicma.ca

You do not need to be a CICMA member to view the video, or review the documents.

We recommended that you share the video with members of your claims team that have responsibility for subrogation claims and consider this alternative to litigation.

If there are any questions, or if you wish to participate in our pilot project please do not hesitate to contact:

Hall Noble, CICMA National Arbitration Chair at Hall.Noble@tdinsurance.com

Local arbitration directors are:

• Bluenose – Paul Ross – paul.ross@economical.com

• British Columbia – Marie-Ann Alward – malward@wawanesa.com

• Manitoba – Luc Dupis – ldupuis@sgi.sk.ca

• New Brunswick – Lynn Prescott – Lynn.Prescott@assestplus.ca

• Newfoundland and Labrador -Paula Monks – paula_monks@cooperators.ca

• Northern Alberta – Melissa Nilson – Melissa.nilson@teig.com

• Ontario – Kevin Chasty – kchasty@thedominion.ca

• Ottawa – Michael-Elizabeth Paczek – Michael-Elizabeth.Paczek@intact.net

• Quebec – Francois Reneault – Fancois.reneault@intact.net

• Saskatchewan – Rod Wotherspoon – rwotherspoon@saskmutual.ca

• South Alberta – Gail Fisher – Gfisher@phgic.com

Cathy Wismer is National Co-Communication Director with the Canadian Insurance Claims Manager Association (CICMA).