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‘Lots of room for improvement’ with new Ontario auto dispute resolution system: Judge Cunningham

November 2, 2016   by Greg Meckbach, Associate Editor

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Ontario’s license appeal tribunal – which this year started hearing auto accident benefits disputes – presents “an opportunity” for auto insurers to “redefine how they provide their services,” an insurance company lawyer said Wednesday, while the retired judge who recommended changing the dispute resolution system told the audience of a panel discussion there is “lots of room for improvement” at LAT.

Tribunal judge hammerJ. Douglas Cunningham, former associate chief justice of the Ontario Superior Court, was one speaker at a panel event – Resort to the LAT or Last Resort – held in Markham.

Justice Cunningham was appointed, in August, 2013, by Ontario Finance Minister Charles Sousa to review the auto claims dispute resolution system. He delivered a report, with 28 recommendations, the following year.

One of his recommendations was to appoint a “public sector administrative tribunal” for handling accident benefits disputes, and that this tribunal should fall under a Cabinet minister instead of the superintendent of financial services.

The ruling Liberals then changed the Insurance Act to move the dispute resolution system to Ministry of the Attorney General’s existing LAT, which also handles liquor licence and driver’s licence appeals, among others.

The Financial Services Commission of Ontario (FSCO) stopped accepting applications for mediation, neutral evaluation and arbitration this past March.

“There are a lot of friction points right now with the LAT,” such as scheduling and productions, said Michael Hart, director of the claims legal counsel department of Desjardins General Insurance, at Wednesday’s panel.

“The LAT to some extent represents an opportunity for lawyers to redefine how they do things – for insurers to redefine how they provide their services,” Hart said. “If someone comes to the LAT and they have the productions to show that someone is entitled to benefits, that is great, because then the case is probably going to resolve.”

By contrast, Hart suggested, under the FSCO system, “a lot of times people did not come ready, did not have the documents and we spent a lot of time trying to figure out what was going on.”

The panel was produced by claims adjusting firm InHEALTH Inc. and law firm Flaherty McCarthy LLP.

“I think it’s important that we start looking at disputes for what they are,” Hart said. “They are a breakdown between the insurer and their client that needs to be pushed through so that we can provide what is in the policy, what they have paid for, when we need to do it.”

Justice Cunningham (who has since retired from the bench and established a mediation and arbitration practice) told attendees that he wanted “to see if we could design a system involving a much more robust mediation at a time when both sides were prepared.”

He recommended that mediation be mandatory and “much more meaningful.”

“I thought that the notion of a registrar or a gatekeeper would be useful to ensure full compliance before these enhanced mediations,” Justice Cunningham added. “I thought most users of the system would have welcomed that. Sadly, that recommendation was not adopted by the government.”

Justice Cunningham described the auto dispute resolution system at the time he was appointed to review it three years ago.

“What I saw was an overly complicated bureaucratic system that was taking far too long to have disputes resolved at far too great a cost – in other words, the whole system operating parallel to the courts, and I recognized that after 20 years, many of the users both on the defence and plaintiff sides had become used to the system and were content to carry on,” he said.

During the late 1980s, when David Peterson was the Liberal Premier, “there was a huge move by the government at the time to do away with the tort system entirely,” Justice Cunningham recounted Wednesday. “I can tell you that the tort system was very much under threat at that time and only through the efforts of many people, both in the industry and on the plaintiff side, did the tort system prevail.”

When he was conducting his review three years ago, Justice Cunningham said he found that “the whole notion of getting benefits to deserving claimants quickly and inexpensively had been lost.”

The personal injury lawyers on the panel included Wendy Moore Mandel, a partner with Thomson Rogers and a director of the Ontario Trial Lawyers Association.

“From a plaintiff’s perspective, I think that all plaintiffs should avoid using the LAT if at all possible,” she said. “I think this is going to download a lot on to the tort side of cases because, frankly, if a client has a valid tort claim, there is no way they are going to proceed through this LAT procedure if … there is enough coverage on the tort side.”

With the move from FSCO to the LAT, the Insurance Act now prohibits parties from bringing accident benefits claims disputes into court, other than an appeal from a decision of the Licence Appeal Tribunal or an application for judicial review.

“My sense is that LAT is here to stay I think folks should strive to make it work and to improve upon it,” Justice Cunningham said. “I think there is lots of room for improvement but I think if you just opt out of it and dismiss it that’s just not the right thing to do.”

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2 Comments » for ‘Lots of room for improvement’ with new Ontario auto dispute resolution system: Judge Cunningham
  1. Frank Cain says:

    The laws pertaining to the Michigan No-Fault law and A/B for auto insurance formed the basis of the Ontario plan in 1990. That could now be considered a serious fault in judgement in the transformation of the tort system to the existing plan. The continuing problem with dispute resolution and the rhetoric to find answers for it is enough to convince me even more that Ontario needs to now consider a move to State- run auto insurance and since we’re borrowing from others for our systems, the plan in effect in BC would be a good choice.

    Of all the insurances able to be purchased, auto coverage has, since about early 1970, been an unworkable form of financial transfer of loss. Why not generally admit that it simply does not work? 1990 was 26 years ago and in the interim, the problems have steadily grown and now without a doubt have morphed into a condition anyone one with even a casual view of auto insurance would consider as flat-footed – as uncompromising as it can get.

    The Ontario Government is the dictator of auto insurance. It now needs to get a handle on the BC system and introduce a plan that will at least take the first part of insurance away from the private risk bearers. Do it now. Do it before the quickening advances in automotive mobility make it difficult to even wonder who a third party is or represents.

  2. Geoff Robinson says:

    Our great Premier ordered changes to auto insurance this past June 1, 2016. The major change created was the reduction in accident benefits and now adding an option to increase them back to prior June 1 at an additional cost to insured’s. Herein lies the problem, Our Companies send an insert to advise Client’s that there have been changes and they have option’s to choose from. This now creates another problem as most people when they receive there renewal check the premium and remove the pink slip in 95% of the cases and now throw the rest in file 13 and we all know what that is. My initiative to e-mail Client’s produced little results, but when I talk with them and explain the risk they agree to the increase. Now this creates a dilemma insofar as the reduction in benefits should have happened only at NEW BUSINESS not RENEWALS and the original benefits “GRANDFATHERED”. If one case backfires and I am sure it will I would suggest the Broker counter sue the Government for its incompetence in understanding its position and the repercussions of its actions while just trying to fulfill a political promise of rate reductions that were not attainable.

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