Resolving Dispute Resolution

A review of the Ontario auto insurance dispute resolution system (DRS) carried out by Justice Douglas Cunningham has provided the provincial government with 28 recommendations which, if implemented, would remove the system from the Financial Services Commission of Ontario (FSCO) and create a new government administrative tribunal.

Justice Cunningham was appointed by Ontario finance minister Charles Sousa to conduct a review of Ontario’s DRS last August. Based on several consultations and written submissions from 33 groups and individuals, he provided the government with an interim report in October 2013 before making his final recommendations in February of this year.

A NEW TRIBUNAL

Justice Cunningham envisions a new tribunal that reports to a Cabinet minister instead of the superintendent at FSCO. Arbitrators would no longer be Ontario public servants, but government appointees, similar to adjudicators on a number of other government tribunals.

The Insurance Bureau of Canada and a number of member companies proposed the entire system be privatized. The report does recommend some private sector involvement, proposing that the tribunal establish tendered contracts with one or more private-sector dispute resolution service providers to address any future backlog.

A MORE STREAMLINED PROCESS

Justice Cunningham’s report envisions a radically streamlined and quick process. It recommends that an insured who submits an application to the proposed tribunal have an arbitrator’s decision within six months if the dispute proceeds to arbitration. The tribunal would have a registrar to deal with jurisdictional issues at the time the application is received without a hearing.

Currently, many procedural disputes are resolved by way of a preliminary hearing conducted by an arbitrator. Under the proposed system, an insurer could challenge an insured’s refusal to attend an insurer examination at the time an application is submitted.

Justice Cunningham further recommends pre-arbitration meetings, neutral evaluation meetings (a step that has not been used since 2008) and that appeals to the director’s delegate be eliminated.

AN END TO MEDIATION

A significant recommended change is to eliminate mandatory mediation as the first step in the dispute resolution process. Instead, a settlement meeting would be scheduled with an arbitrator rather than a mediator. This step would have elements of both mediation and the current pre-arbitration meeting.

The report also recommends doing away with telephone mediations. Instead, settlement meetings would take place in person or through video conferencing.

The settlement meeting would take place within 45 days of an application being accepted by the tribunal’s registrar. If the settlement meeting does not conclude with a settlement of all issues in dispute, the parties would be expected to disclose the evidence they will rely upon in support of their position at a hearing. During a settlement meeting, the arbitrator might provide one or both parties with an opinion regarding the likely outcome of a future arbitration if the parties fail to reach a settlement.

THREE ARBITRATION STREAMS

Following an unsuccessful settlement meeting, an arbitrator will inform the parties whether their arbitration will take the form of a paper review, an expedited in-person hearing or a full in-person hearing. The determination would not be subject to appeal.

A paper review would take place in cases where $10,000 or less of medical and rehabilitation benefits are in dispute, or where the dispute involves a determination as to whether or not the claimant’s injuries meet the minor injury definition. A paper review would occur within 60 days following the receipt of a completed application and the arbitrator would provide a written decision (no more than three pages) within 30 days of the date of the review. The tribunal would be expected to restrict the length of expert reports and briefs.

Arbitration hearings would be conducted as an expedited in-person hearing in cases that do not qualify as either a paper review or full in-person hearing. These should last no longer than one day and the arbitrator would inform parties how much time will be allocated to present their cases.

Arbitration hearings would be conducted as full in-person hearings for disputes involving catastrophic impairment determinations, whether the claimant qualifies for 24-hour attendant care or income replacement benefit claims beyond 104 weeks. The arbitrator would determine the length of a full in-person hearing.

All in-person hearings would take place within 90 days following the receipt of a completed application, with decisions being available within 45 days of the hearing date. The arbitrator’s report should be no longer than five pages for an expedited hearing and 10 pages for a full hearing.

The appeals of arbitration decisions should be heard by a single judge of Ontario’s Superior Court of Justice on a question of law.

NEW PENALTIES FOR NOT MEETING TIMELINES

The report recommends a number of timelines that would be incorporated in legislation along with penalties for those who do not comply. Parties who cannot commit to appear for settlement meetings or arbitrations within the timelines set out would not be eligible to claim their costs at arbitration.

If the tribunal is unable to schedule an arbitration within those timelines, it would be expected to reduce the arbitration fees it collects from the parties.

Parties would also get financial relief if arbitration decisions are late being issued.

A SHIFT IN CULTURE

Justice Cunningham made it clear that he would like to see a change in culture within the DRS. A number of recommendations are expected to accomplish that shift.

Every insurer would be required to establish an internal company review process and to inform an insured how to access the process following a benefit denial. However, insureds would not be required to use the internal company review process before submitting an application to the new tribunal. Companies would be free to determine how their internal review process will be structured, but must provide an insured with a written response within 30 days.

Justice Cunningham recommends the settlement of future medical and rehabilitation benefits should be prohibited until two years after the date of the accident, which is one year longer than the current prohibition.

The provincial government would be expected to create a sliding scale of fees and Justice Cunningham proposes that incentives be introduced to encourage parties to settle early.

Experts would be required to certify their duty to the tribunal and to provide fair, objective and non-partisan evidence. Arbitrators would be expected to ignore evidence that was not fair, objective or non-partisan and, in those circumstances, the expert would not receive compensation for appearing as a witness.

WHAT HAPPENS NEXT?

In January 2014, the Ontario government indicated that it will propose legislative amendments in the spring session based on recommendations of Justice Cunningham’s review.

However, the legislation may not pass if a spring election takes place. Should an election occur, it will be up to the new government to decide when and how it chooses to proceed with DRS reforms.

Once legislation finally passes, it will take some time to establish a new tribunal. That means DRS users may be waiting some time before they benefit from any recommended changes that are adopted.

(Ed. note: In early March, Ontario’s provincial government tabled legislation that, if passed, will move administration of the dispute resolution system from FSCO to the Ministry of the Attorney General’s Licence Appeal Tribunal.)