‘Lots of room for improvement’ with new Ontario auto dispute resolution system: Judge Cunningham

Ontario’s license appeal tribunal – which this year started hearing auto accident benefits disputes – presents “an opportunity” for auto insurers to “redefine how they provide their services,” an insurance company lawyer said Wednesday, while the retired judge who recommended changing the dispute resolution system told the audience of a panel discussion there is “lots of room for improvement” at LAT.

J. Douglas Cunningham, former associate chief justice of the Ontario Superior Court, was one speaker at a panel event – Resort to the LAT or Last Resort – held in Markham.

Justice Cunningham was appointed, in August, 2013, by Ontario Finance Minister Charles Sousa to review the auto claims dispute resolution system. He delivered a report, with 28 recommendations, the following year.

One of his recommendations was to appoint a “public sector administrative tribunal” for handling accident benefits disputes, and that this tribunal should fall under a Cabinet minister instead of the superintendent of financial services.

The ruling Liberals then changed the Insurance Act to move the dispute resolution system to Ministry of the Attorney General’s existing LAT, which also handles liquor licence and driver’s licence appeals, among others.

The Financial Services Commission of Ontario (FSCO) stopped accepting applications for mediation, neutral evaluation and arbitration this past March.

“There are a lot of friction points right now with the LAT,” such as scheduling and productions, said Michael Hart, director of the claims legal counsel department of Desjardins General Insurance, at Wednesday’s panel.

“The LAT to some extent represents an opportunity for lawyers to redefine how they do things – for insurers to redefine how they provide their services,” Hart said. “If someone comes to the LAT and they have the productions to show that someone is entitled to benefits, that is great, because then the case is probably going to resolve.”

By contrast, Hart suggested, under the FSCO system, “a lot of times people did not come ready, did not have the documents and we spent a lot of time trying to figure out what was going on.”

The panel was produced by claims adjusting firm InHEALTH Inc. and law firm Flaherty McCarthy LLP.

“I think it’s important that we start looking at disputes for what they are,” Hart said. “They are a breakdown between the insurer and their client that needs to be pushed through so that we can provide what is in the policy, what they have paid for, when we need to do it.”

Justice Cunningham (who has since retired from the bench and established a mediation and arbitration practice) told attendees that he wanted “to see if we could design a system involving a much more robust mediation at a time when both sides were prepared.”

He recommended that mediation be mandatory and “much more meaningful.”

“I thought that the notion of a registrar or a gatekeeper would be useful to ensure full compliance before these enhanced mediations,” Justice Cunningham added. “I thought most users of the system would have welcomed that. Sadly, that recommendation was not adopted by the government.”

Justice Cunningham described the auto dispute resolution system at the time he was appointed to review it three years ago.

“What I saw was an overly complicated bureaucratic system that was taking far too long to have disputes resolved at far too great a cost – in other words, the whole system operating parallel to the courts, and I recognized that after 20 years, many of the users both on the defence and plaintiff sides had become used to the system and were content to carry on,” he said.

During the late 1980s, when David Peterson was the Liberal Premier, “there was a huge move by the government at the time to do away with the tort system entirely,” Justice Cunningham recounted Wednesday. “I can tell you that the tort system was very much under threat at that time and only through the efforts of many people, both in the industry and on the plaintiff side, did the tort system prevail.”

When he was conducting his review three years ago, Justice Cunningham said he found that “the whole notion of getting benefits to deserving claimants quickly and inexpensively had been lost.”

The personal injury lawyers on the panel included Wendy Moore Mandel, a partner with Thomson Rogers and a director of the Ontario Trial Lawyers Association.

“From a plaintiff’s perspective, I think that all plaintiffs should avoid using the LAT if at all possible,” she said. “I think this is going to download a lot on to the tort side of cases because, frankly, if a client has a valid tort claim, there is no way they are going to proceed through this LAT procedure if … there is enough coverage on the tort side.”

With the move from FSCO to the LAT, the Insurance Act now prohibits parties from bringing accident benefits claims disputes into court, other than an appeal from a decision of the Licence Appeal Tribunal or an application for judicial review.

“My sense is that LAT is here to stay I think folks should strive to make it work and to improve upon it,” Justice Cunningham said. “I think there is lots of room for improvement but I think if you just opt out of it and dismiss it that’s just not the right thing to do.”