Canadian Underwriter

Dispute resolution for the new millennium

March 1, 1999   by Canadian Underwriter

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In response to the growing need for alternative and effective mechanisms in dealing with potential legal disputes, British Columbia’s insurance industry recently launched the Insurance Dispute Resolution Services of B.C. One of the more innovative features of this resolution process is that it covers disputes from consumers to differences arising between industry parties. A great deal of planning has gone into the project, in terms of structure and procedures, and it is now fully operational. The project has involved challenges to traditional and established ways of handling disputes, offering equitable and effective options to all parties.

It would be a fairly obvious statement to note that, from its beginnings, the insurance industry has been ridden by disputes. The traditional method of dealing with difficult claims or disagreements has been through the court system. This, however, has proved to be time-consuming and costly. Needless to say, the legal process can be a frustrating experience for clients, brokers, companies and adjusters alike.

To provide all parties with the opportunity to resolve disputes in a positive, effective, mutually beneficial, less costly and more timely manner, the insurance industry of B.C. has introduced the Insurance Dispute Resolution Services (IDRS).

The concept for the IDRS was originally developed by the Insurance Brokers Association of British Columbia (IBABC) in 1998. As an organization located at the heart of the insurance industry and having the necessary space, administrative, educational and teleconferencing facilities, the IBABC was the most suitable sponsor for the project.

The first step was to ascertain the support and interest from all segments of the insurance industry and its clients. The results of an informal feasibility study and subsequent brokers’ questionnaire demonstrated overwhelming support for the project.

In order that the project retain complete efficacy amongst the insuring public and the industry, a separate, non-profit, entity had to be created, hence the birth of the IDRS which, in terms of its representation, is independent from any group bias.

Typical disputes which will be handled by the IDRS cover that of a client and an insurance company, an insurance company and a broker, an adjuster and an insurance company or any other combination. The service itself consists of assisting parties in selecting the process and panelist best suited to resolving their specific dispute. The IDRS will provide assistance in coordinating meetings among the parties involved in a dispute, providing full administrative support and information on dispute resolution, and presenting educational and orientation seminars for the insurance industry and related organizations.

The broad mandate of the IDRS is to serve the insuring public of B.C. as well as the members of the insurance community. Independence of service is achieved by the make-up of the board of trustees, appointed with representatives from all sectors of the industry.

B.C.’s IDRS board members

The IDRS’ board members were selected on the basis of high personal and professional integrity, objectivity and neutrality. Further, these trustees all possess a keen sense of consumer advocacy.

The board is made up of the following six members: Harry Geddes, commercial lines manager at Barton Insurance Brokers; John Glavin, a retired insurance manager from Dominion of Canada General Insurance Co.; Ian Henley, a retired provincial court judge; Patti Kernaghan, president of S.J. Kernaghan Adjusters Ltd; Joan Rush, vice president and general counsel at Seaboard Life Insurance Company; and Mike Valiquette, vice president of Western Union Insurance Co.

In addition to ensuring broad representation on the board, a handpicked panel of highly qualified professionals in dispute resolution has been established to provide mediation, arbitration, mini-trials and multi-party services.

The panel includes leaders in dispute resolution who also have extensive experience in the insurance field. Furthermore, the panelists are located throughout B.C. to provide province-wide services. There are presently 33 Panelists.

Promoting dispute resolution

The IDRSBC is also involved in encouraging members of the insurance industry to become trained in dispute resolution and is developing a mentoring program to provide practical experience.

The IDRSBC maintains close communication and cooperation with related organizations, such as the Financial Institutions Commission (FICOM), the Insurance Bureau of Canada (IBC), and the B.C. Ministry of the Attorney General’s Dispute Resolution Office (DRO). To ensure access to the service to all members of the insuring public, a lower cost mediation process will be available for disputes involving less than $5,000.

By Peter Wright, a consultant to the Insurance Dispute Resolution Services of B.C.