Ontario’s new procedure for solving accident benefits disputes: Who really stands to benefit?

Changes to the accident benefits program promised to make dispute resolution between insurance companies and seriously injured car accident victims, more time efficient, cost effective and straightforward. But will they?

It takes time to become familiar with new procedures, however many Toronto personal injury lawyers are concerned that these changes will work completely contrary to the intended outcome.

The big question now is, will this new legislation actually cause a longer wait, more expense and confusion to innocent people who completely rely on the insurance benefits, that insurance companies are withholding from them.

Then and Now

Up to April 1^st 2016, the Financial Services Commission of Ontario, more commonly known as FSCO, handled disputes between car accident victims and insurance companies. Under this system, the parties involved would make an application to FSCO, for help in reaching settlement through mediation. An unbiased mediator would preside over an informal presentation of each side’s argument. The mediator’s job was to help the parties find a suitable remedy to their differences. The mediation was free, other than a nominal application fee. It seemed to work reasonably well and many disagreements settled during this stage, saving both parties the stress, expense and frustration of a lengthy arbitration or court battle. If the disagreement was not resolved in mediation, the accident victim has the choice of whether to sue in the Superior Court or apply for arbitration through FSCO. Each option had some benefits to it – arbitration’s were a more stream lined and efficient process than a lawsuit, but the Superior Court judges had more ability to penalize the insurance companies for bad faith. For example, if an insurance company does not treat an accident victim fairly, they can ask an arbitrator for a special award which is a maximum of fifty percent of the denied benefits for unfairly withholding benefits or in more extreme cases of bad faith, they can ask a judge for a punitive damage award worth significantly more.

Since April 1^st 2015 there is a new procedure for solving disputes between insurance companies and injured car accident victims. FSCO is no longer involved and the accident victim no longer has the option to go to the Superior Court.

Change from FSCO to AABS/LAT/SLASTO 

The ‘Automobile Accidents Benefits Service,” commonly referred to as AABS offers support to car accident victims and insurance companies to settle their dispute when a accident claim has been denied or the parties disagree on the appropriate benefit amount. This could affect anyone who has been injured in a car accident, including the driver and vehicle occupants, as well as anyone affected by the injuries or death of loved ones.

There are new rules and procedures

Step 1. Preparation to apply

Before delivering the “Application” package, the claimant must first fill out the “Application by an Injured Person for Auto Insurance Dispute Resolution Under the Insurance Act” form and “serve it” to the insurance company they have the dispute with.

The Application package must be submitted with a summary of the accident victim’s position. Given that the entire hearing may be done in writing and not in person or even in on the phone, the summary is quite an extensive and lengthy process.

The application package must also include all documents that the accident victim wishes to rely upon. Whereas the accident victim had time to obtain expert reports commenting on the issues in dispute after the application, but before the arbitration under FSCO, now they must have them ready to go and include them with the application. The result is that instead of applying for mediation right after a denial to ensure a speedy resolution and allow the accident victim to get the treatment and benefits awarded right away, the accident victim has to wait until they have all of their reports before even starting the process. This can delay treatment or benefits significantly and the accident victim’s injuries may go from acute and treatable to chronic and treatment resistant while they wait.

Step 2. Deliver the Application

The claimant can mail or fax The “Application” which consists of three items:

1. “Application by an Injured Person for Auto Insurance Dispute Resolution Under the Insurance Act” form along with a
2. “Certificate of Service” Form (to prove the appropriate papers were served to the insurance company.)
3. Payment of $100 to the appropriate address listed at http://www.slasto.gov.on.ca/en/AABS/Pages/Contact-Us.aspx Persons who wish to hand deliver their application may do so at 20 Dundas Street ,West, in Toronto.

What do the acronyms mean?

SLASTO stands for Safety, Licensing Appeals and Standards Tribunals Ontario

Under the umbrella of SLASTO is LAT, which stands for License Appeals Tribunal

Under the umbrella of LAT is AABS, which stands for Automobile Accident Benefits Service

What are the differences between then and now?

•  Before April 1^st 2016 the application went to FSCO.
•  Now the application goes to AABS/LAT/SLASTO as a matter of course.

Before, the most recent legislation, accident benefits disputes went to mediation, then arbitration and if necessary to court. The parties could and often did settle early on in the process.

Now, there is no option for mediation and no ability to opt to launch a lawsuit against the insurance company.

No matter how egregious the insurance company’s conduct is towards the accident victim and how deserving they are of a punitive award for this bad faith, the accident victim cannot choose to go to the Superior Court. To make it worse, AABS/LAT/SLASTO cannot even award a special award. In other words, no matter how badly the insurance company acts, there are no financial penalties that the accident victim can seek.

The process has always been complicated. It was complicated before. The new method hasn’t been in effect long enough to be sure, but most people find the new acronyms and form names unnecessarily puzzling and the process, overall confusing. Where the old system had a huge amount of case law to resource, the new system has no history to fall back on and are refusing to follow FSCO cases. They will have to figure it out along the way.

“It is a threat to the rights of accident victims. It completely changes the mechanism for dispute resolution. It is meant to be a quicker process, but it is more complex and there are a number of unanswered questions as to how this system will function. Much of it is done in writing – so in many cases, the victim is never assessed or heard by the arbitrator. The victim never gets their day in court.”  Kahler Personal Injury lawyer, Sherilyn Pickering’s comments above, seem to sum it up.