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Canada’s top court weighs in on HST case concerning accident benefits


January 24, 2022   by David Gambrill

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Claimants who sought a settlement with insurers over HST being deducted from their accident benefits have lost their bid to have their claims certified as class actions.

The Supreme Court of Canada rejected leave to appeal the case on Jan. 20, meaning the Ontario Court of Appeal Case stands. The Appeal Court found the court did not have jurisdiction under the Insurance Act to certify the class actions, because only the province’s Licensing Appeals Tribunal (LAT) has authority to decide accident benefits matters.

Essentially, in concurring with the trial judge, the Court of Appeal for Ontario found that the case was not about HST, but rather a question of accident benefits entitlement. It also found the Insurance Act “provided a complete answer to the plaintiffs’ claim.”

Section 280.1 (3) states: “No person may bring a proceeding in any court with respect to [an accident benefits] dispute…other than an appeal from a decision of the Licence Appeal Tribunal or an application for judicial review.”

In other words, the LAT must look at the accident benefits claim first. And, because the HST component of the claim is secondary to the fact that this was essentially an accident benefits claim, the court had no jurisdiction to declare the matter a class action.

“As the motion judge noted, no court actions are permitted with respect to either disputes about entitlement to [Statutory Accident Benefits] SABs or the amount of the SAB,” the Ontario Appeal Court ruled. “The LAT has exclusive jurisdiction over such disputes.”

In Dorman v. Economical Mutual Insurance Company, multiple plaintiffs filed proposed class actions against 15 auto insurers and the Financial Services Commission of Ontario (FSCO). In their claim, they alleged the insurer defendants had improperly deducted the province’s HST from their statutory accident benefits.

Shortly after the court actions were commenced, two defendant insurers entered into settlement agreements. The settlements were conditional on the proceedings being certified as class proceedings and on court approval of the settlements. Most of the remaining defendant insurers, including FSCO, brought parallel motions to ask the court to determine whether the LAT had exclusive jurisdiction over the dispute.

The Superior Court of Justice found that S. 280 of the Insurance Act negated the court’s jurisdiction. The Appeal Court agreed, and now Canada’s top court has refused leave to appeal. As is customary, the Supreme Court does not issue reasons for why it rejects leaves to appeal. That means the Ontario Court of Appeal’s decision now stands.