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Car Insurance Benefits Denied? Apply to the LAT and wait wait wait

April 1, 2016 was an important date for car accident victims across Ontario. Not because it was April Fools Day. But because on this date, everything to do with hearing and adjudicating accident benefit disputes in Ontario changed.

All accident benefit disputes filed on or after April 1, 2016 which used to be heard at the Financial Services Commission of Ontario were from that point forward heard at the License Appeals Tribunal or LAT for short.

Only around 2 or 3 adjudicators from FSCO transferred over to the LAT, so there was no real continuity or institutional knowledge which had carried over from FSCO to the LAT.

Adjudicators at the LAT were not bound by any precedent set by the years of caselaw developed at FSCO.

There were new shorter time lines which the parties had to deal with. New rules regarding expert reports and expert qualifications.

Costs only awarded in rare circumstances, and when costs are awarded, they are under the low end of the spectrum.

The cost burden shifted significantly to the injured accident victim who has much less money to spend on legal fees than does the insurance company who they are fighting against.

At FSCO the accident victim simply filed for mediation. The cost of filing for mediation was free to the accident victim. If the mediation failed, the accident victim could give up on the case, pay $100 to file for Arbitration, or elect to sue in Superior Court.

There was a huge advantage to the accident victim to go the litigation route. This would either consolidate his/her legal costs with the tort claim; or they would be entitled to more generous costs if their case was successful. Simply having the accident benefit claim heard along with the companion tort action made things easier for Plaintiffs and lawyers alike. Imagine that: everything under one roof with one trier of fact.

After April 1, 2016 with the LAT, accident victims were no longer able to sue their insurer in Superior Court. The advantage of combining the tort and accident benefit actions was taken away from the Plaintiff. That meant multiple forums for a case involving the same Plaintiff, the same witnesses, the same doctors, and the exact same accident. This has led to inconsistencies of results given that the adjudicator at the LAT can  view a case one way; and a Judge of the Superior Court can view a case the other.linkedin-2-300x300

Even more unfortunate is the nature which the LAT works. In litigation, the party with the largest war chest wins. In order to balance the playing field, Ontario has a system in car accident cases whereby the loser pays the costs of the winning party. This would ensure that a Plaintiff can go into debt to pay for expert reports and lawyer fees and get reimbursed if the Plaintiff wins his/her case. You can see why this would be very important for a Plaintiff. It’s not nearly as important for a large multi billion dollar insurance company. They can spend all the money they want on a case and it won’t make a dent to their finances.

Costs are rarely awarded at the LAT. This means that a Plaintiff cannot recover his or her legal costs or the costs for expert reports to prove their case. But an insurer on the other hand will spend hundreds of thousands of dollars to save them disproportionately less money than they would pay out on a potential award. This has created an imbalanced playing field which has tilted the scales even more in favour of large, deep pocketed insurance companies at the expense of innocent accident victims.

A recent case caught my eye (Robinson v AIG Insurance, 2022 CanLII 35796 (ON LAT))

This LAT case was heard over 9 days. There were a total of 18 issues in dispute, along with a Preliminary Issue of requesting that the adjudicator recuse herself from the hearing because she had a history of siding too often in favour with insurance companies and not Plaintiffs.

A study commissioned by the Applicated cited 165 decisions with CanLII citations and a pie chart entitled “Decision Balance by Percentage” dividing the Adjudicator’s decisions into “90% total insurer favored, 5% total insured favored, 5% total mixed”. This seems like a lot.

What amazes me is that the recusal motion was heard by the same adjudicator which the Applicant was seeking to recuse. Recusal motions ought to be heard by a separate trier of fact, and not the trier of fact you are seeking to remove. Does the moving party really think that the trier of fact will craft a decision pointing out why they themselves are not capable of doing their job? Do you really think that they will highlight their flaws and remove themselves from hearing the case; thereby putting their careers at risk? These motions need to be heard by a separate trier of fact who has no skin in the game so to say. Needless to say, the motion was unsuccessful. Not because it was devoid of merit. But because no trier of fact is ever going to go on the record to highlight why they should not hear cases anymore, or admitting that their track record shows a bias one way, or another.

After the hearing, $500 in costs were awarded to the insurer for a 9 day hearing. Had the Applicant won, that costs award would likely have been the same. The $500 award would  hardly cover the cost of photocopies or the scanning for a 9 day hearing.  Had the hearings taken place in person, that would have covered under half of the parking charges over 9 days of the hearing ($30/day downtown).

Defendant insurers with money to burn can afford to take this sort of principled approach. It’s not fair and the way the LAT works tips the scales in favour of insurers. Insurers know this. Even if they lose, they still win. Unfortunately, we have created and fostered a system whereby this imbalance becomes more apparent every day. The LAT cannot keep up with the volume of cases. This creates significant delay for injured accident victims who need their treatment and benefits right away. But the term right away doesn’t happen at the LAT. It’s a broken system wretched by delay and where justice is dished out to the party with the most money to burn.


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