An increasing problem with illegal activities involving tow trucking in the car accident industry has Ontario’s legislature at attention. On June 10, 2013 a Bill was introduced at the Ontario legislature, which was aimed at amending the Highway Traffic Act in order to regulate the towing industry and create a totally new Towing Industry Act, 2013.This proposed new law is at the First Reading stage right now, which means it is still a few months or years until it becomes the law.
However, as the Parliament of Ontario is currently considering the need for Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 and reviewing how effectively the Financial Service Commission of Ontario has fought insurance fraud in the industry, the proposed Bill gains in its appeal as another effective solution to that problem.
The purpose of this Towing Industry Act, 2013 is to protect the public from fraudulent deception by creating laws that criminalize previously unregulated activities, such as illegal referral agreements between towing agents and repair shops. Some towing operators are able to con individuals into entering contracts at the scene of a car accident that bind them to very unfair costs of having their car fixed by an unknown mechanic.
Once the contract is signed, the tow truck would tow the car directly to their repair shop, which would then overestimate how many repairs the car needs and send an unrealistic invoice to the insurance company of the driver. If such inflated sum of money is paid out to the mechanic shop, the insurance company of the driver would surely look to reimburse itself and may do it by increasing the monthly premium paid by the driver for many years to come.
With the potential passing of this Bill, the towing industry will be regulated to ensure that “the public will have access to towing services of high quality provided in accordance with honesty and integrity at a reasonable cost.” (Section 1 of the Towing Industry Act, 2013)
The Towing Industry Act, 2013 is enforceable on only those operating “a tow truck for the purpose of providing services to the public”. (Section 2 of the Towing Industry Act, 2013) Thus, the Towing Industry Act, 2013 does not apply to other usage of a towing vehicle, such as recreational or farming usage, and will highlight seven key aspects when dealing with the towing industry: Registration, Complaints and Discipline, Council, General issues, Towing Services Retained by Crown or Municipality, Offences, Referral Fees, and Regulations.
In short, under the proposed law, all towing businesses and drivers will have to be registered. The registration fees will go towards a governing body, the Towing Industry Council of Ontario, directors of which will consist of at least 40 % from people outside the towing industry. This should guarantee that the public opinion is taken into consideration as opposed to skewing the board in favor of towing business operators.
Having its own governing body will provide the opportunity for complaints against specific tow truckers to be registered, as well as offenders of the law to be penalized. The laws requiring all tow truck drivers to be registered will resonate with the Crown and Municipality as well, requiring all drivers hired by the Crown and Municipality to provide proof of their registration. This will further protect the public from any fraud and unfairness that may slip through the loopholes in the justice system.
The duty of the law has always been to protect the general public, while preserving the rights of the individuals in the private sector. As the scope of industries evolve and expand, the law must follow suit. The Towing Industry Act, 2013 is a natural progression in our perpetually evolving auto insurance legislation.