New Ontario vehicle storage lien rules take effect July 1

Changes to Ontario’s vehicle storage laws, designed to reduce auto claims costs, take effect July 1, while changes to towing regulations will not take effect for more than a year, the provincial government announced Thursday.

“Currently, when a vehicle has been damaged in an accident, it may be brought to a storage facility after the collision by someone other than the owner, or without the owner’s authority,” Liberal MPP Laura Albanese told the legislature in October 2014 during a debate on Bill 15. “Those who store vehicles after accidents can begin charging for storage services right away, even though the owner of the vehicle may be unaware of where their car is located and that it is accumulating charges every day. Storers can hold a vehicle and accumulate storage charges for up to 60 days without giving any notice and then still claim a lien for the storage costs.”

Bill 15 is an omnibus bill that was passed into law in November, 2014. One of the laws it changes is the Repair and Storage Liens Act.

“Most” of the changes to that law take effect July 1, 2016, the province announced on Dec. 17, 2015.

The new regulation will “reduce the notice period from 60 days to 15 days for vehicles registered in Ontario,” the province said Thursday. “The new rules are expected to improve storage practices and remove associated costs from the auto insurance system.”

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Bill 15 also makes changes, affecting tow truck operators, to both the Consumer Protection Act and the Highway Traffic Act.

Those changes will take effect Jan. 1, 2017, the province said Thursday.

The Highway Traffic Act will be changed to require tow trucks to have a Commercial Vehicle Operator’s Registration (CVOR).

The Consumer Protection Act will stipulate that a towing provider will be required, among other things, to give a customer “an itemized invoice, listing services provided, the cost for each service, and the total cost before demanding or receiving payment.”

Two and storage providers will also be prohibited “from recommending repair and storage facilities, legal service providers or health care service providers unless a consumer or a person acting on their behalf specifically asks, or the provider offers to make a recommendation and the consumer (or authorized person) agrees.”

Any tow operator will also be required to “disclose to a consumer whether the provider is getting a financial reward or incentive for providing a recommendation for towing a vehicle to a particular storage or repair shop.”

Bill 15 was subject to hearings in November, 2014 before the Standing Committee on General Government. One witness was Craig Hirota, members’ services manager for Associated Canadian Car Rental Operators.

“Disclosure of rates, provision of itemized invoices, minimal deviation from estimated payment amounts, insurance requirements, authorization of service requirements, acceptance of multiple forms of payment and establishment of qualifications and licensing are common expectations placed upon any business,” Hirota told the committee at the time. He added that towing services “are almost always rendered when the consumer is in distress, unable to negotiate or choose an alternative service provider.”

Also discussed at the committee was the new requirement for a CVOR, which requires drivers to take a certain amount of time off.

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“Tow operators do a lot of short tows, with a lot of time in between,” Aris Marinos, a director of North American Auto Accident Pictures Towing Division, told the committee. “There are no scheduled calls, so it’s all emergency towing, which will not leave enough time off consistently or consecutively to satisfy the requirements of the program.”

But Brian Patterson, president and chief executive officer of the Ontario Safety League, told the committee that the CVOR “is the best tool available, in our opinion, to deal with commercial vehicles on public roadways.”

Bill 15 would also require the Attorney General’s licence appeal tribunal to handle disputes “in respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled.” That tribunal currently receives appeals, conducts hearings, resolves disputes and renders decisions on compensation claims and licensing activities regulated by several Ontario government departments. Those licensing activities currently include liquor licences, motor vehicle dealers, real estate brokers, travel agencies, home builders, private colleges, day nurseries, private security guards, funeral directors, cemeteries, bailiffs and retirement homes, among others.

Currently, when there is a dispute over an auto insurance statutory accident benefits claim, both the insurer and claimant can apply for mediation with the Financial Services Commission of Ontario (FSCO). If after mediation there are still issues in dispute, the claimant may either apply for arbitration with FSCO or launch a lawsuit.

Bill 15 changes the Insurance Act to prohibit parties from bringing such proceedings into court, “other than an appeal from a decision of the Licence Appeal Tribunal or an application for judicial review.”

Bill 15 also reduces the prejudgment interest rates on damages for non-pecuniary losses in personal injury actions.

This was set at 5% per year, but “the prejudgment interest rate for most other damages is based on Bank of Canada interest rates and calculated quarterly,” Albanese told the legislature during a debate on Bill 15. “Currently this rate is 1.3% per year. The 5%-per-year prejudgment interest rate for damages for non-pecuniary loss in a personal injury action increases the cost of bodily injury claims in the auto insurance system, which drives up costs for all consumers. This rate has not been adjusted since 1990.”