On July 15, 2014, the Liberal government introduced into first reading a Bill 15, titled Fighting Fraud and Reducing Automobile Insurance Rates Act (previously known as Bill 171 before the election). Despite its benign title, Bill 15 will drastically change the Ontario car accident benefit insurance system by taking steps that are unconnected to the government’s stated goals of reducing fraud and insurance rates for the average Ontarian.
The two most drastic changes to the Accident Benefits regime in Ontario are the removal of car accident benefits claims from the jurisdiction of the Financial Services Commission of Ontario (“FSCO”), and the prevention of Accident Benefits claims from being litigated in civil courts. As an alternative, the Liberal government has moved the responsibility of adjudicating Car Accident Benefits claims to the License Appeal Tribunal. The License Appeal Tribunal is a provincial tribunal that handles all sorts of matters, including liquor licenses, payday loans, private career colleges, and collection agencies, among various others.
Accordingly, the Liberal government has proposed to take away FSCO’s jurisdiction over Accident Benefits claims, and instead transfer it to a less specialized and wholly understaffed tribunal. This move will effectively throw away the experience and expertise gained over the years by FSCO in handling accident benefits matters. The learning curve for the License Appeal Tribunal will be steep, which will inevitably lead to greater delays and backlogs in reviewing claims. Not to mention, the government’s added provision to remove the option of taking accident benefits matters to court will reduce the options available to Ontarians who wish to litigate their claims against insurance companies.
Bill 15 will also prevent the average Ontarian from being able to seek proper legal advice when dealing with an insurance provider. This is because section 280(6) of Bill 15 also makes legal representatives personally liable for legal fees, which means that accident benefits claims will no longer be financially prudent for legal representatives. Therefore, this change will hurt an individual’s right to appeal the decisions of the License Appeal Tribunal to civil courts for judicial review, where a lawyer’s expertise matters most. Not to mention, the future role of FSCO’s mediators remains uncertain and, as a result, there will inevitably be a gaping hole of expert knowledge within the accident benefits adjudication system that cannot be filled by the License Appeal Tribunal.
Despite the government’s stated goal of “reducing fraud and insurance rates,” it is difficult to see how such drastic changes will even remotely achieve it. As mentioned, the swapping of loads from FSCO to the License Appeal Tribunal will not help alleviate the current burden of the cases, but instead it will lead to greater backlogs and delays. It’s clear to see that such changes will erect a barrier for average Ontarians to obtain fair compensation from a car accident. These changes will also negatively impact an individual’s access to justice, if they are entitled to compensation from the insurance company but cannot take the matter to civil courts.