The April 1, 2016, changes to the Insurance Act direct all new accident benefits disputes to the LAT/AABS.
FSCO’s own mediation reports included the following notice:
“As of April 1, 2016, the Licence Appeal Tribunal of the Safety, Licensing Appeals and Standards Tribunal Ontario (SLASTO) has assumed all new applications for dispute resolution services. FSCO will no longer accept applications for mediation, neutral evaluation and arbitrations filed on or after April 1, 2016. This includes applications for arbitration where the Report of Mediator is issued before or after April 1, 2016. FSCO will continue to be responsible for all files remaining open as of March 31, 2016.”
Bulletin #6 entitled “New Auto Insurance Dispute Resolution System Takes Effect” posted to FSCO’s Dispute Resolution Services webpage states:
“Previously, motor vehicle accident insurance disputes were brought to the Financial Services Commission of Ontario (FSCO). If you currently have a file in the mediation stage at FSCO, your next step would be to file an application at AABS, if mediation fails. If you currently have a file in the arbitration stage at FSCO, it will remain at FSCO. All new claims must be filed at AABS.”
However, the transitional regulations in section 283 of the Insurance Act are vague. Particularly, the Act does not define “unresolved prior disputes.”
For months after the transition date, there seemed to be no rhyme or reason why some arbitrators made orders to add issues to existing arbitration proceedings at FSCO and ADR Chambers, and others did not.
On January 12, 2017, Director’s Delegate Evans released the appeal decision in Aviva and Duong (P16-00048), providing much needed clarity and direction to the insurance industry on this transition question respecting the adding of issues to existing disputes at FSCO. He noted that if adding issues to an existing arbitration is the same as commencing a new arbitration, an arbitrator clearly lacks the jurisdiction to add issues based on the regulatory changes. In concluding that adding issues is indeed the same as commencing a new arbitration, relying on the Court of Appeal decision in Gordyukova v. Certas Direct Insurance Co., 2012 ONCA 563.
Simply put, no new issue can be added to an arbitration proceeding on or after April 1, 2016. Director’s Delegate Evans also found that no new issue could be added to an arbitration after the expiry of a limitation period. The only exception to this is for those issues that necessarily arise from an issue already in dispute, such as claims for ongoing benefits. Director’s Delegate Evans gave an example that, where ongoing attendant care benefits and housekeeping and home maintenance benefits are already in dispute, a catastrophic impairment claim could be added (where the entitlement to post 104 week attendant care and housekeeping already in dispute necessarily require a determination of catastrophic impairment). Director’s Delegate Evans considered that FSCO’s own materials state that no matter when the Report of Mediator was issued, no new applications for mediation, neutral evaluation and arbitration could be file on or after April 1, 2016. Thus, he concluded that the treatment plan sought to be added to the FSCO proceeding which had nothing to do with the issues already in dispute could not be added to the FSCO arbitration, and must proceed to the LAT.
The Aviva and Duong (P16-00048) decision is binding on all arbitrators as per the Hejnowicz and Coachman Insurance (Appeal P05-00024, August 3, 2006) and Vo and Maplex General Insurance Company and Insurance Bureau of Canada, (OIC P-002777, December 12, 1997).
Meredith Harper is a member of the Appellate Advocacy practice group. If you have a question about this blog of an appeal file, please contact Meredith here.