Resisting auto accident cash settlements in Ontario could escalate disputes: Lawyer

Ontario auto insurance changes announced last week are “unlikely” to reduce disputes over accident benefits claims, an insurance defence lawyer predicts, but brokers and insurers agree the provincial government is moving in the right direction.

Finance Minister Charles Sousa’s Dec. 5 auto insurance reform announcement lacks a lot of detail but “appears unlikely to reduce accident benefits disputes and may actually increase them,” Amanda Lennox wrote in an email Monday. She is a partner with Laxton Glass LLP, whose specialties include defence of accident benefits claims.

Ontario’s Fair Auto Insurance Plan is based in part on recommendations made by David Marshall, former CEO of the Workplace Safety Insurance Board, in a report released Apr. 11. He recommended earlier this year that Ontario cease medical and rehabilitation care for accident benefits claims.

Sousa is promising “standard treatment plans for common collision injuries such as sprains, strains and whiplash,” adding this will reduce the need for cash settlements.

“If the government limits cash settlements, which they allude to in the announcement, I predict more disputes, not less,” Lennox told Canadian Underwriter. “It will become an all-or-nothing system in which insurers and claimants will have no choice but to take every dispute all the way to a decision, as there would be no way to compromise and settle based on a risk/reward basis.”

Claims disputes are currently subject to arbitration before Ontario’s license appeal tribunal (LAT), a responsibility held until 2016 by the Financial Services Commission of Ontario (FSCO).

About $1.4 billion a year “is being paid for competing expert opinions, lawyers’ fees and insurer costs to defend claims – instead of going to treatment of injured parties,” Marshall said in his report. He recommended that government establish a “roster” of hospital-based independent examination centres, or IECs, to “provide diagnoses and future treatment plans.”

Sousa said Dec. 5 the province plans to roll out “independent examination centres” to assess motor vehicle accident injuries. This measure, along with standard treatment plans, should reduce spending on legal fees in disputes over claims, said Colin Simpson, CEO of the Insurance Brokers Association of Ontario, in an interview Monday.

“The changes that are being proposed now are more far-reaching than they have been in the past, where they have been trying to tweak products,” Simpson said. “We are hopeful that this is a positive step in the right direction”

The Marshall report “was one of the best pieces of independent advice” that the Ontario government has received since the 1990s, said Carol Jardine, chief strategy officer for Wawanesa, in an interview.

“If we can find a way to get our patients and our customers the right healthcare sooner and better, we will support the decisions of those independent medical assessment centres” that Sousa promised Dec. 5, Jardine said, adding insurers “want to get rid of these dueling medical opinions.”

Sousa’s Dec. 5 announcement is “a good start,” wrote Anna McCrindell, vice president of underwriting at Gore Mutual, in a statement Monday.

“The tough stance on fraud is welcome,” she said of the promise to setup an office dedicated to investigating and prosecuting serious fraud.

“We look forward to the government continuing to develop more details around the specific initiatives noted in the press release,” added McCrindell. “In general, we support the direction being taken.”