Tribunal decision imperils limitation periods in auto claims

The Insurance Act is just one act to consider among all the other factors when dealing with the two-year limitation period in statutory accident benefits disputes, the Ontario Licence Appeal Tribunal (LAT) has found.

“So that’s frightening,” Philippa Samworth, a partner at Dutton Brock LLP, said Tuesday during a presentation at the Ontario Insurance Adjusters Association’s (OIAA) 2018 Claims Conference in Toronto. “The [Ontario] Court of Appeal tells us time and again that the purpose of the limitation period is finality; to know your claim has come to an end, you don’t have to keep it open. Apparently not in the LAT, we are going to keep it open forever.”

Samworth was discussing the case of A.F. v. North Blenheim Mutual Insurance Company, released on Dec. 13, 2017. It dealt with whether Section 7 of the Licence Appeal Tribunal Act could be used to overrule the provisions of Section 280(2) of the Insurance Act (which sets out that the insured person or insurer may appeal to LAT to resolve a dispute) or Section 56 of the Statutory Accident Benefits Schedule (SABS), which says that proceedings must be commenced within two years after an insurer refuses to pay a claim.

In A.F. v. North Blenheim Mutual Insurance Company, LAT executive chair Linda Lamoureux said adjudicators consider four criteria when assessing whether or not Section 7 of the LAT Act can be used to override the Insurance Act limitation period:

• the existence of a bona fide intention to appeal within the appeal period;
• the length of the delay;
• prejudice to the other party; and,
• the merits of the appeal.

The way Section 7 of the LAT Act is being interpreted, the tribunal is essentially agreeing that the two-year limitation period has expired, “but it doesn’t matter because we think we should extend the time for giving notice,” Samworth said during the seminar, titled Accident Benefits: The Top Ten LAT Cases of 2017. “That means there is an argument available in any limitation case… to seek an extension under Section 7.”

Added Samworth: “Lamoureux said that the four factors are not strict elements that must be met in each case. It’s a guide, a guide, to assist in determining the justice in the case.”

Furthermore, various cases come before the LAT that are not limited to SABS, and there are a variety of limitation periods, Lamoureux ruled. “The LAT Act has to apply broadly and it must apply to all the types of cases that come before them. The Insurance Act is just one act to consider among all the other factors.”

In A.F. v. North Blenheim Mutual Insurance Company, the two applicants injured in a motor vehicle accident applied to LAT for dispute resolution on Aug. 26, 2016 — more than two years after North Blenheim Mutual had denied their claims.

The insurer argued that Section 7 of the LAT Act could not overrule the applicable sections of the Insurance Act or SABS and that Section 7 “was a discretionary power and only exercised if that relief that been specifically sought by one of the parties, which it had not,” and not at the behest of the LAT executive chair. Finally, North Blenheim argued that the tribunal cannot extend a limitation period on its own initiative in any event.

Lamoureux disagreed, saying that Section 7 was applicable and could be relied upon irrespective of the provisions of the Insurance Act and SABS.

In the end, Lamoureux did not rule on the merits of the case, but rather sent it back for a rehearing. There has been no appeal launched either to the Divisional Court or by way of judicial review.