February 3, 2010 by Canadian Underwriter
More accident benefits (AB) claimants will likely find themselves in small claims court as a result of the Jan. 1, 2010 changes to Rules of Civil Procedure, said Kadey Shultz, an associate at Hughes Amys, LLP.
Shultz spoke on recent decisions and changes to legislation affecting AB claims at the Ontario Insurance Adjusters’ Association conference in Toronto on Feb. 3.
Prior to the January 2010 changes to the Rules of Civil Procedure, the monetary jurisdiction of small claims courts was $10,000. The changes raised that to $25,000.
Prior to Jan. 1, a typical AB dispute would be heard by Financial Services Commission of Ontario (FSCO) arbitrators, or through Simplified Procedure in the Superior Court of Justice.
“I suspect if we tried to gather some empirical evidence targeting specific firms —paralegal and plaintiff firms — that we would see that the majority of the claims handled by those specific firms are under $25,000,” she said.
“We now have a whole new opportunity for litigation. Paralegal and plaintiff firms are going to choose not to go to FSCO, where they have an educated decision maker [on the matter of AB] and process. And they are going to choose not to go to the Superior Court of Justice, whether through the Simplified Procedure or through the normal course. Rather, they are going to choose to go to small claims court.”
Shultz added the legal expenses awarded to counsel or other representatives have increased to 15% of the total amount of the claim.
“But in small claims court, we have nothing like a pre-hearing. We don’t have a settlement conference. We have nothing like an arbitrator or an experienced judge [with a firm understanding and knowledge of AB] who has been appointed to the bench.
“We have, for the most part, deputy judges who work a few days a month in the small claims court, and who have likely never had to deal with a motor vehicle file before — let alone one with AB.”
Shultz suggested defence counsel should view the situation as a teaching opportunity.
“You’re going to have to get your decision maker up to a certain level of competence in understanding the subject matter and knowledge to move forward. Particularly because the case law right now, unfortunately, is so against insurers that the only thing we can often win on is a technical argument.
“So, we need to be up to speed on the technical arguments and then we need to empower our decision makers.”