On April 1, 2016, a significant change to auto insurance claim disputes in Ontario went into effect. According to the Fighting Fraud and Reducing Automobile Insurance Rates Act, a.k.a. Bill 15, accident benefits disputes will no longer be handled by the Financial Services Commission of Ontario (FSCO) but instead, will now be the responsibility of the Ministry of the Attorney General’s Licence Appeal Tribunal (LAT).
The LAT, whose powers and duties are set by The Licence Appeal Tribunal Act, is an adjudicative tribunal that is part of the larger Safety, Licensing, Appeals and Standards Tribunals Ontario (SLASTO). The primary reason for the switch from FSCO to LAT is to reduce consumer frustration with the previous process, as well as to limit the financial and administrative stress on the system which sometimes led to increasing insurance costs and rates.
One of the most significant differences in the process under the LAT system is that mandatory mediations will no longer be required. Under the FSCO system, an insured had to file an application for mediation if they were denied accident benefits. Only after a failed mediation, could the insured then file for arbitration. That will no longer be the case under LAT. That said, while mandatory mediations are no longer required, there are specific steps and procedures applicants must take, some of which mirror the FSCO process.
The first step is for a claimant to file an Application for Arbitration after being denied benefits by his or her insurer. At this point, the LAT process encourages the insurance company to conduct an internal review after being informed that the insured disagrees with the decision. However, this is completely optional. If the insurance company stands by its decision despite an internal review, the next step is for a company representative to file a Response to the Application for Arbitration. A case conference will then be scheduled, which must take place within 45 days of the application. Before the case conference, both parties must file a case conference summary outlining, for example, any documents to be used, issues and a list of witnesses. The third step is the case conference before an arbitrator. If the issue remains unsettled after the conference, a hearing will be scheduled within 60 days. There are three types of hearings, depending on the facts of the case.
Written/Paper Review Hearing – These are for disputes to determine whether or not an applicant falls within the minor injury guideline (MIG) and for compensation worth $10,000 or less. These hearings will typically be completed 135 days following filing.
In-Person Hearings – These are hearings for disputes involving catastrophic impairment determination, entitlement to post-104 week income replacement benefits and substantial attendant care claims. These hearings will typically be completed within 360 days following filing.
Expedited/Telephone Hearings – These are hearings for disputes that typically fall within the middle ground of the other two categories. They will typically be completed 210 days following filing.
Not surprisingly, the changes have sparked a significant reaction among the legal community and the public. Some of the key criticisms and potential concerns in regards to the new system include:
The LAT will only allow appeals where there is a question of law and not appeals based on merit. What this means is that a party cannot appeal an unjust decision simply on the facts, unless they can prove that there were legislative irregularities in the handling of the case. As many legal experts have pointed out, that significantly reduces an individual’s options if the hearing does not go their way.
Another frequently voiced concern about the switch to the LAT is in relation to the size of this division, which is considerably smaller than the FSCO. Also, many of the members of the LAT are part-time appointments, as opposed to full-time government employees who are specialized in auto insurance issues. As a result, many question whether the LAT will be able to handle the increased caseload or if its members will possess the necessary skill set to arbitrate these disputes. The former concern is particularly significant, as one of the main reasons for the proposal to switch to the LAT was to make the system more efficient.
Despite a recommendation for the creation of statutory timelines that the LAT would have to adhere to, none were created. The timeline requirements were therefore left up to the LAT to determine. This is no different than the FSCO and naturally, adds to the concern of cases becoming backlogged.
Unlike the FSCO where the majority of the hearings were handled in-person, the LAT will be conducting most of their case conferences over the phone, which many view as a step backwards, not to mention impersonal.
Understandably, many potential users and claimants are confused about the changes and the legal implications of the new LAT process. If you have been unfairly denied in an insurance claim or are unsure how to proceed in an insurance claim dispute, it is in your best interest to contact a legal expert who can clearly explain the insurance dispute resolution process and/or provide strong representation against the insurer. At Rastin & Associates, we have years of experience handling auto insurance claims as well as substantial expertise in all aspects of insurance dispute resolution. If you were injured and are seeking compensation from an insurer, call Rastin & Associates to find out how we can help expedite your claim.