Canada: Goodbye FSCO, Hello LAT!

It's no joke—April Fools' (April 1, 2016) marks the day when accident benefit arbitration applications will begin to be received by the Licence Appeals Tribunal ("the LAT") instead of by FSCO.

This significant change in how accident benefit disputes will be handled has been in the works for quite some time. However, as with most change, many in the insurance industry seem to be looking at this new process with hesitation and trepidation, possibly because it is unfamiliar in comparison to the FSCO dispute resolution system which many have worked with for their entire careers.

But fear not! The LAT's process, while new and unfamiliar, is in fact quite similar to that of the dispute resolution process at FSCO. The goal of the LAT's auto insurance dispute resolution system (which the LAT has termed "AIDRS") is to make the arbitration process more streamlined which, by very definition, should make it more user-friendly.

For starters, there will be no more mandatory mediations in advance of arbitration (as previously required by section 280 of the Insurance Act). Instead, an applicant will be able to apply for arbitration immediately upon his or her benefit being denied or terminated. The arbitration process will then proceed as follows:

  1. The applicant will file an Application for Arbitration with the LAT. This new form has been promised to be simplified and fillable. In fact, it is the LAT's goal to eventually be able to accept electronic filings and fee payment.
  2. The insurer will retain counsel and file a Response to the Application for Arbitration. The matter will then be scheduled for a case conference (the equivalent of FSCO's pre-hearing discussion).
  3. Prior to the case conference, the parties will be required to file a case conference summary outlining the documents to be used at the hearing, any production issues, the preference of type of hearing (written, electronic or in-person), a list of witnesses (including an explanation as to why more than two expert witnesses are required, if applicable) and the details of the most recent settlement offers.
  4. All parties and their representatives will be required to attend the case conference, at which all preliminary issues will be dealt with, settlement will be discussed, the type of hearing will be decided (if not decided already) and a hearing date will be set. Similar to FSCO pre-hearings, case conference arbitrators will have the authority to grant any Order that is considered proper for the conduct of the proceeding.
  5. If the matter does not settle at the case conference, the hearing will proceed as scheduled:

    • Written hearings are expected to be used for all disputes under $10,000.00 or disputes to determine whether an applicant falls within the MIG.
    • Expedited, electronic hearings (e.g. telephone hearings) are expected for most other disputes.
    • In-person hearings will be reserved for the most serious cases and are therefore expected to only be used for issues such as catastrophic impairment determination, entitlement to post-104 week income replacement benefits and significant attendant care claims.

      NOTE: Although written and electronic options were available at FSCO, they were rarely used except for simple motions. For this new regime, the LAT intends on only 10-percent of cases to proceed by way of an in-person hearing.
  1. Once a hearing decision is made, either party will have the option of requesting the Executive Chair of the Safety, Licensing Appeals and Standard Tribunals Ontario (of which the LAT is a part) to reconsider the decision. Alternatively, the party can appeal the decision to the Divisional Court of Ontario, followed by the Court of Appeal.

From the time the Application for Arbitration is filed, the LAT's goal is to have hearings completed withing the following time frame:

Hearing Type Completed Within Decision Available After
Written 135 Days 30 Days
Electronic 135 Days 45 Days
In-Person 210 Days 90 Days

These are ambitious goals given the number of applications expected. To avoid backlogs, the LAT has promised to remain flexible with respect to resourcing and staffing (thereby suggesting that it is entirely possible that ADR Chambers could continue to be used for overflow claims).
Hopefully the system will work as well as it is being touted. Regardless, though, the intricacies of the new system are nothing to fear.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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