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TORONTO - With last year’s passage of
Bill 15, the “Fighting Fraud and Reducing Automobile Insurance Rates
Act, 2014”, the handling of accident benefits disputes in Ontario is to
be passed from the Financial Services Commission of Ontario (FSCO) to
the Licence Appeal Tribunal (LAT). There are obvious reasons for the public to fear this transition.
FSCO handles about 10,000 applications each year, compared to LAT’s 700.
FSCO arbitrators and mediators have a wealth of experience in a highly specialized area, while LAT members have no experience in accident benefits disputes.
Instead, LAT members have expertise in liquor licence appeals, reviews of medical suspension of drivers’ licences, motor vehicle impoundments and claims under the Ontario New Home Warranties Plan.
Courtesy of Canadians for Properly Built Homes (CFPBH), a national, non-profit consumer protection organization, we have a report analyzing 2006-2013 LAT decisions pertaining to homeowner appeals of Tarion decisions concerning new home warranties.
Tarion is the private corporation created by the Ontario government to protect new homebuyers and administer new home warranties, although its board of directors is controlled by builders.
CFPBH has concluded LAT’s “operations and performance need improvement both in relation to the adjudicators themselves (specifically in relation to self-represented parties) and the LAT’s management and administrative processes.”
The numbers in the CFPBH study present a dire picture for homeowners who dare to enter the LAT’s chambers.
During the eight-year period of the study, LAT gave homeowners a 96% failure rate in relation to major deficiency claims.
The annual failure rate for total issues presented by homeowners in the last three years of the study is 82%, 83% and 94%.
The number of appeals brought before LAT dropped from 119 in the first four years of the study to 69 in the last four.
It’s impossible to know why the numbers have dropped off but CFPBH believes many homeowners have given up and made repairs themselves while some have resorted to what they call “patch and run” tactics.
That is, homeowners patch up the deficiencies and place their homes on the market for resale without disclosing the builders’ defects.
Still others bypass LAT completely and pursue remedies through the courts.
Yet this very avenue has been taken away from those seeking accident benefits arising from vehicle crashes.
Bill 15 removes this option and forces all accident benefit claims to be resolved without recourse to courts.
Karen Somerville, President of CFPBH, believes LAT has “serious shortcomings” and purchasers of new homes urgently need — and deserve — a fair and appropriate appeal process for the largest purchase most consumers make: a home.
LAT’s numbers seem to support Somerville’s contention. Certainly there doesn’t appear to be a level playing field between homeowners and Tarion.
All of which begs the question, why was LAT chosen to administer the automobile insurance dispute resolution system?
Hopefully many current FSCO arbitrators will be moved over to LAT so their expertise won’t be lost.
But that doesn’t change the fact LAT members are part-time (other than the Associate Chair), appointed for temporary terms, receive per diem rates (other than the Associate Chair), and are government appointees.
Reappointment is at the pleasure of the Ontario cabinet, so they cannot be seen as independent.
Current FSCO arbitrators are full-time, unionized, public sector employees.
It is difficult to see how the transfer of jurisdiction from FSCO to LAT will serve to either fight auto insurance fraud or reduce rates, although it is easy to see how the transfer will result in massive new expenditures and may result in injustices.
But shouldn’t we first be fixing LAT and providing purchasers of new homes with meaningful remedies, before we throw 10,000 new auto insurance disputes at it?
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