Balance needed between interests of drivers, insurers

While the future of a bill meant to address pressing concerns in the auto insurance system is unknown, the issues persist, and drivers are still in need of cost-saving solutions, says Toronto personal injury lawyer Peter Cho.

The Liberal government’s Bill 171, the Fighting Fraud and Reducing Automobile Insurance Rates Act, passed second reading in April, and proposed making several changes to the auto insurance dispute resolution system. The bill is now effectively dead as the legislature has dissolved for the June 12 election.

Cho, associate with Smitiuch Injury Law, said he’s glad to see Bill 171 go by the wayside, but as long as auto insurance rates remain an issue in Ontario, another version of the bill is likely to be presented in the near future.

The bill looked to name the Licence Appeal Tribunal as the new location for the dispute resolution section of the Financial Services Commission of Ontario (FSCO) – a move that would raise serious concerns for drivers, said Cho.

“A major concern with respect to this shift would be whether it would lead to further backlog and delay in having disputes resolved effectively. This has been a challenge facing the Ontario accident benefits regime for many years,” said Cho.

“A second concern, and equally significant, is that FSCO arbitrators, who have significant knowledge and experience in making decisions on accident benefits disputes, would be replaced with per diem arbitrators who do not possess the same level of expertise and knowledge of the Ontario accident benefits regime.

“At this stage, there are not enough facts about how the Licence Appeal Tribunal would operate, but my concern is how this change would impact Ontario drivers and specifically those currently involved in disputes with their insurers as they may be facing additional delays and potentially a new set of rules and procedures with the Licence Appeal Tribunal.”

The bill also proposed repealing sections of the Insurance Act that would stipulate that no person may bring a proceeding in any court with respect to a dispute over statutory accident benefits, “other than an appeal from a decision of the Licence Appeal Tribunal or an application for judicial review.” The impact of such a change “cannot be overstated,” said Cho.

“I anticipate that there would be great resistance and a strong response to this type of change from the legal community as well as from Ontario drivers as it restricts access to justice,” he said.

“By removing the right for someone to bring an accident benefits dispute into the court system, it denies the individual their inherent right to have their dispute heard before a local judge to decide an issue. This type of change confines an individual to a specific set of rules and procedures established by the Licence Appeal Tribunal and also eliminates the ability to proceed with punitive and exemplary damages where they may be appropriate.”
The amendment would “remove accountability for an insurer’s actions,” said Cho.

“Bill 171 would also impact access to justice due to the change in the calculation of pre-judgment interest,” he said. “The proposed change in the legislation would set an interest rate based on the Courts of Justice Act, resulting in a drop from 5 per cent to 1.3 per cent per annum. The current SABS rate is 1 per cent compounded monthly. As such, insurance companies will find little incentive to settle with an injured party at an earlier stage.”

Despite the uncertain future of Bill 171, Cho said the issues are worth discussing because they’re bound to resurface in the legislature.

“There needs to be a better dialogue between representatives of Ontario drivers and the insurance companies,” said Cho. “As it currently stands, there is an imbalance of power in the automobile insurance industry. The near introduction of Bill 171 and its sweeping changes without much public debate is evidence of this.”

source:  http://advocatedaily.com/2014/06/balance-needed-between-interests-of-drivers-insurers/