Ontario appeal court upholds decision on 60-day limit for FSCO mediation wait

The Court of Appeal for Ontario has upheld a decision by a lower court to dismiss the appeals by insurers, in a case involving the wait time for mediation from the Financial Services Commission of Ontario (FSCO).

The case, Hurst vs. Aviva Insurance Company, involved four individuals making separate but similar claims to their different insurers under the Statutory Accident Benefits Schedule (SABS) after they were in auto accidents.

Background: Ontario court rules that 60-day mediation timeframe is firm, despite case backlogs

The claimants had gone forward with litigation against their insurers, citing failed mediation through FSCO, since their claims weren’t mediated within 60 days – a limit set out in FSCO’s Dispute Resolution Practice Code.

A mediation attempt through FSCO is mandatory before a claimant can make a court action against an insurer.

FSCO hadn’t provided reports to the claimants noting that mediation had failed, since it said the 60-day parameter only applied after the mediation application had been assessed by its staff and found to be “complete.”

The insurers involved in the case then argued in court that mediation had not failed because the 60-day limitation didn’t apply in these situations, in line with FSCO’s view.

A lower court judge dismissed those motions by the insurers, who appealed to the Court of Appeal for Ontario.

In a decision Thursday, the appeal court upheld the previous decision. The decision hinged on wording in various sections of SABS, which the appellant insurers had argued did not set out a 60-day limitation on the mediation wait time.

“I do not accept that the 60-day clock does not begin to run until FSCO has assessed an application as complete,” Justice Russell Juriansz wrote in the decision.

“…the purpose of the legislation is to make mandatory a mediation process that is timely and effective,” the decision notes.

“This has serious repercussions for the tens of thousands of Applications for Mediations stuck in backlog at FSCO,” writes Miller Thomson lawyer Talaal Bond in a blog on the case.

“Essentially, all the Applications that were filed in excess of 60 days may proceed directly to litigation should the insured so choose.  This in turn will likely overwhelm the arbitrations unit and devour already limited court resources.”

In a statement, the Ontario Trial Lawyers Association (OTLA), a group of personal injury plaintiff lawyers, said it welcomed the court’s decision.

“The Court of Appeal has said that 60 days means 60 days,” OTLA president Andrew Murray said. “This is an important decision to ensure timely access to justice for injured auto accident victims, as justice delayed is justice denied,” he added.

Wait times for mediation from FSCO were also a major issue addressed by the final report from the Ontario Automobile Insurance Anti-Fraud Task Force this month.