With the change from FSCO to the LAT, some questions have arisen
about when it is too late to file for a mediation at FSCO, what the
effect of an outstanding mediation is on a LAT proceeding, how
limitation period issues are dealt with as well as some other
To put the current situation in context, under the pre-April 1,
2016 "system", a claimant had two years from the date of
the insurer's refusal to pay the benefit claimed to mediate,
arbitrate or litigate. And so long as a claimant mediated
within the two years, then litigation or arbitration could be
commenced within 90 days of the mediator's report date
(effectively pushing past the two year mark).
However, those sections of the Insurance Act were
repealed to make way for the new "system" where the only
available option is to apply to the Licence Appeal Tribunal to
resolve a benefit dispute.
The LAT AABS website makes it clear that in the new regime, the
two year mark is king [their emphasis]:
These steps are meant to help
you settle your dispute quickly, but the law states that you must
file an application with AABS within two years from the date that
your insurance company denies your policy benefits.
The two-year time limit is important. If you do not apply to AABS
within two years, it is very possible that your application will be
This is based upon section 56 of the Statutory Accident
Benefits Schedule which states:
56. An application under subsection 280 (2) of the Act
in respect of a benefit shall be commenced within two years after
the insurer's refusal to pay the amount claimed.
I will use an example to help work through the transitional
provisions. Let's say Carla Claimant was denied an IRB on
February 15th, 2014. She files for mediation on
February 14th, 2016, so within the two years of an
insurer denial, and before FSCO's cut-off of April 1,
2016. So, what happens to Carla's claim on April 1,
2016? Does she get the protection of the 90 days
anymore? Is the mediation deemed to be failed? Should she file for
LAT on April 2nd ? Does she lose her right to
apply for Arbitration to FSCO? Can she still go the route of
a Civil proceeding? Is she out of time?
The answers to most of these questions can be found in Ontario
Regulation 664, in sections 19-25, which contain the transition
provisions. Section 21 indicates that a mediation that was
"commenced" but not completed before the transition date
(April 1, 2016 – as proclaimed by the Lieutenant Governor of
Ontario), continues on after that day. The section goes on to
say that in respect of such a proceeding, the Insurance
Act as it existed before the transition date continues to
apply. Therefore, Carla Claimant can proceed with her
mediation, and still has 90 days after she receives the
mediator's report to proceed to the next dispute resolution
However, subsection 21 (6)makes it clear that Carla Claimant can
only proceed to the LAT, even though her mediation was commenced
prior to April 1, 2016:
greater certainty, if mediation fails, a court proceeding or
arbitration may not be commenced on or after the transition date
but the insured person or the insurer may apply to the Licence
Appeal Tribunal under subsection 280 (2) of the Act.
Therefore, as long as a claimant commenced a mediation at FSCO
prior to April 1, 2016, they may rely upon O. Reg 664 to extend
their limitation period to the 90 days following a mediator's
report. The only restriction on the claimant though, is that
they can only proceed to the LAT if/when the mediation fails.
The transitional provisions are just one aspect of the many new
changes to the Accident Benefits world. Please stay tuned to
our blog for updates!!
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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