In the recent decision Abu-Ain v. Security National Insurance Company et al, 2026 ONSC 1494, the Ontario Divisional Court considered an application for judicial review brought by a claimant who was found by the Licence Appeal Tribunal (the “LAT”) not to be an “insured person” under the Statutory Accident Benefits Schedule (SABS). In doing so, the Court examined the consumer protection object of the SABS, providing insight into how accident benefit payments are handled where priority disputes between insurers are ongoing.
Facts
In August 2021, the Claimant, Mr. Abu-Ain, was a passenger in a vehicle traveling on a highway when suddenly, the driver lost control. The car rolled, striking a guardrail, and the Claimant was severely injured.
The Claimant did not have his own vehicle and therefore did not have his own car insurance. As such, he applied for accident benefits through his aunt’s insurer, Security National Insurance Company, on the basis that he was financially dependent on his aunt and uncle.
Security National made benefit payments to the Claimant and initiated a priority dispute with the Motor Vehicle Accident Insurance Fund, the publicly funded automobile insurance provider that covers injured accident benefit claimants who do not have recourse to another policy of automobile insurance. This dispute proceeded under the auspices of O. Reg. 283/95 (the “disputes between insurers or DBI” regulation) through private arbitration.
In June of 2022, Security National accepted that the Claimant was catastrophically impaired. Up to around that point, Security National paid over $400,000 in benefit payments to the Claimant. However, when the Claimant applied for additional benefits in January of 2024, Security National denied these. The Claimant disputed this denial before the LAT.
Before the LAT
In the proceeding before the LAT, Security National raised a preliminary issue, namely whether the Claimant was an “insured person” as defined under section 3(1) of the SABS. Specifically, Security National argued that the Claimant was not a dependent of his aunt and was therefore not entitled to recover under her insurance policy with Security National.
The Claimant argued that this preliminary issue should be adjourned until the arbitration proceedings between Security National and the Fund were complete, since these proceedings would determine whether Security National was obligated to pay his accident benefits.
The adjudicator declined to adjourn the proceedings and found that the Claimant was not an “insured person” as defined under the SABS, since he was not sufficiently financially dependent on his aunt. The adjudicator then dismissed the Claimant’s claim for accident benefits on this basis. Upon reconsideration, the LAT upheld this decision.
The Claimant sought judicial review before the Divisional Court on the grounds that the issued raised were an abuse of process, since the issue of whether he was an “insured person” was already the subject of arbitration proceedings between Security National and the Fund.
The Claimant further argued that the LAT improperly applied the dependency test when assessing whether he was entitled to accident benefits under his aunt’s auto insurance policy, among other issues.
The Divisional Court’s Review
Writing for the Court, Justice Brownstowne contextualized the dispute within the broader legislative regime that governs the Claimant’s entitlement to statutory accident benefits. This regime must be considered to fairly dispose of this case, some of the relevant parts of which are as follows:
- Section 280 of the Insurance Act: an insured person may to apply to the LAT to determine their entitlement to accident benefits;
- Subsection 2(4) of the SABS: the insurer liable to pay accident benefits to a claimant shall be determined in accordance with the priority provisions in subsection 268(2) of the Insurance Act; and
- Subsection 268(2) of the Insurance Act and the DBI regulation, which together govern how insurers determine which is liable to pay a claimant’s accident benefits.
A Consumer Protection Purpose?
The SABS is first and foremost consumer protection legislation and must therefore be applied in a manner that is consistent with this purpose. This is particularly important where a claimant such as Mr. Abu-Ain has been catastrophically injured and requires quick access to accident benefits. As the court wrote in Arts (Litigation Guardian of) v. State Farm Insurance Co., “the goal of the legislation is to reduce the economic dislocation and hardship of motor vehicle accident victims and as such, assumes an importance which is both pressing and substantial.”
The provisions of the DBI regulation provide a mechanism for insurers to identify the correct insurer liable for paying a claimant’s accident benefits. As part of this process, an insurer must notify any other potential insurer(s) within the applicable limitation period, following which the dispute must proceed to arbitration to be resolved, unless the parties resolve the matter on their own terms.
Notably however, in furtherance of the legislation’s consumer protection objective, subsection 2.1(5) the DBI regulation specifically provides that the insurer who first receives a completed application for accident benefits from a claimant shall not refuse to accept it.
Subsection 2.1(6) of the DBI regulation further states that “the first insurer that receives a completed application for benefits from the applicant shall commence paying the benefits in accordance with the provisions of the Schedule pending the resolution of any dispute as to which insurer is required to pay the benefits.”
With these provisions in mind, the Court explained that when confronted with a claim for accident benefits, insurers are required to pay now and dispute later. The legislative scheme provides a mechanism for insurers who pay a claimant’s accident, for which another insurer should take priority, to recover their expenses from the priority insurer.
However, by requiring the insurer who first receives a completed application for accident benefits from a claimant to pay them forthwith, the legislation ensures that injured claimants have access to the treatments that they need, despite any potential disagreements related to which insurer should actually pay the benefits.
Mr. Abu-Ain’s Claim
In this case, Security National began paying the Claimant’s accident benefits and subsequently commenced a priority dispute with the Fund in accordance with the applicable rules. However, the priority dispute had not yet been resolved when Security National denied the Claimant’s application for benefits. By submitting to the LAT that the Claimant was not an “insured person” and therefore disentitled from receiving benefits, Security National sought to raise an issue that was already in the process of being resolved in accordance with the arbitration process laid out in the DBI regulation.
The Court held that this constituted an abuse of process as it undermined the statutory scheme governing priority disputes between insurers. Regardless of the outcome of the arbitration, the Claimant was going to be covered by one of either the Fund or Security National. As such, Security National would have recourse to recover its expenses from the Fund if it was found that the Fund was the priority insurer for the Claimant. However, by addressing the preliminary issue at the LAT, the Claimant’s access to accident benefits were stripped away even though the legislative intent is to pay now and dispute later.
The LAT failed to appreciate the consumer protection purpose wherein benefits must be paid by an insurer who receives an application, notwithstanding any unresolved priority disputes between insurers.
The importance of this consumer protection purpose is real. Here, the Claimant had received nearly $500,000 worth of accident benefits. He was in dire need of benefits, yet his claim was dismissed by the LAT on the basis that he was not an “insured person” in relation to Security National. If Security National was keen on terminating its duty to pay benefits, it should have done so by expediting the arbitration process with the Fund.
Conclusion
The statutory scheme governing accident benefits is intended to ensure that injured claimants can access necessary treatments without delay. As such, insurers properly served with a completed application for benefits are obligated to pay them and dispute any priority issues in accordance with the rules and regulations. This way, all claimants can quickly obtain necessary treatment, and insurers have recourse to recover any payments for which another insurer should have paid.
Daniel Hinds is an articling student at ZTGH and the author of this blog. If you have any questions about this blog, please contact Daniel by email at [email protected].
