Canada: Is The Courtroom Door Open Or Closed?

Last Updated: November 17 2016
Article by Helen D.K. Friedman

By way of update to our October 8, 2015 blog featuring Ayr Farmers Mutual v. Wright: "Insurer's Attempt to Short Circuit Dispute Resolution Process Shut Down", the insurer's appeal was dismissed by the Court of Appeal on all grounds October 27, 2016.

As you will recall, Ayr Farmers took the position that Mr. Wright was not involved in an "accident" as defined by the Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10 (the "Schedule") so as to entitle him to benefits under the Schedule.

Rather than participate in the statutorily prescribed mediation process, Ayr Farmers went directly to court by way of application under Rule 14, seeking a determination of the "accident issue". Mr. Wright objected to this process, arguing that the prescribed dispute resolution process in sections 279 to 283 of the Insurance Act applied to a determination of "accident", including prescribed FSCO Mediation.

Mr. Justice Sweeney, at first instance, agreed with Mr. Wright on all points, confirming that the dispute resolution process set out in sections 279 to 283 of the Insurance Act was the process to be applied with respect to such determinations. "Entitlement to benefits" in section 279 of the Act included, on a plain reading, whether or not a person was involved in an accident. The definition of "insured person" in sections 279 to 283 should not be read down so narrowly as to exclude a person seeking a determination of whether or not an accident occurred.

The question on appeal was whether determination of the 'accident' issue was a preliminary issue which fell outside the section 279 scheme. In other words, until Mr. Wright was found to have been involved in an accident, he was not an 'insured person' for the purposes of sections 279 to 283 and therefore could not avail himself of those sections.

Ayr Famers argued this was a "coverage issue" rather than a benefit entitlement issue. Accordingly, before the statutory scheme in sections 279 to 283 was triggered, coverage must first be determined.

The Court of Appeal found that the scheme in section 279 provided for a comprehensive alternative process to the courts, which included a separate administrative body for resolving disputes between claimants and insurers concerning entitlement to and amounts of benefits. Part of this statutory scheme involved limiting access to the courts and providing incentives for claimants to pursue arbitration rather than litigation. Accordingly, to interpret sections 279 to 283 in a manner which would require claimants or an insurer to apply to the court for a preliminary determination of whether the claimant qualifies as an "insured person" would be inconsistent with the creation of a comprehensive alternate dispute process. Given the legislative intent to create a comprehensive alternate dispute process, the Court found it unlikely that a "coverage application" would be required as a condition precedent to accessing such a process.

Further, the Court found it unlikely that the legislature intended to create a bifurcated process which required a court application prior to advancing the claim under section 279 of the Insurance Act. The Court did acknowledge this could be more expeditious if it were ultimately determined the claimant would not qualify as an "insured person"; however, it would deprive the claimant of their right under sections 279 to 283 to make the choice of forum.

Finally, having regard to the purpose and scheme of the Act, the Court of Appeal determined that the term "insured person", in section 279, can reasonably be read as encompassing all persons claiming entitlement to benefits, whether or not it is ultimately determined that they are entitled to benefits. In this regard, the Court of Appeal adopted the "modern approach" to statutory interpretation which requires the statute to be read in a manner which accorded with the scheme and object of the Act and the intention of Parliament. The Court of Appeal also applied a purposive analysis, noting that a statute cannot be construed in such a way as to defeat the object and intent of the legislation, which in this case was providing coverage to the insured person. In other words, given that the legislature had enacted the dispute resolution provisions and created the statutory body (OIC/FSCO) and empowered OIC/FSCO to provide an alternative to the courts, the purpose of sections 279 to 283 was to be inclusive of all entitlement issues rather than exclusive.

While it is tempting to dismiss this decision as anachronistic, given the changes to the dispute resolution process effective April 1, 2016, this decision raises some interesting considerations applicable to the post-April 1, 2016 regime.

The Court of Appeal noted specifically that the arguments on appeal were largely confined to the dispute resolution process as it existed until March 31, 2016, and that the judgment should not be read as opining on the post-April 1, 2016 amending scheme. This comment suggests that the judgment may not be applicable to determinations on a go forward basis.

Section 280(1) of the Insurance Act currently uses the term "insured person" in mandating the LAT as the forum for disputes concerning entitlement to statutory accident benefits or in respect of the amount of such benefits.

Section 280(3) provides that no person may bring a proceeding in any court with respect to such a dispute other than as an appeal from the LAT or an application for judicial review.

As the definition of "insured person" has not changed from the previous wording, similar reasoning would likely apply to prevent parties from going to court for preliminary coverage issues. Furthermore, to suggest that section 280 of the Insurance Act limits access to the courts would be an understatement, given the explicit wording in section 280(3). That said, however, some of the rationale applied by the Court of Appeal is less likely to have traction in the post-April 1, 2016 regime. For instance, the Court of Appeal noted specifically that at the time that statutory accident benefits were introduced, the legislature created a specialized tribunal, the Ontario Insurance Commission (predecessor to the Financial Services Commission) as regulator of the insurance industry. The Court of Appeal specifically noted that FSCO was given a broad mandate which included regulatory, supervisory and dispute resolution responsibilities and powers. The Court of Appeal specifically noted that FSCO had been cited (ironically) with approval by the Court of Appeal for decisions on entitlement and had been described by the Court of Appeal as "a specialized body of arbitrators who routinely adjudicate claims for statutory accident benefits".

Clearly, with the dismantling of FSCO's dispute resolution process and the empowerment of the Licence Appeal Tribunal, the Court of Appeal's rationale is less compelling. The Licence Appeal Tribunal cannot in any way be considered as a "new regulator of the insurance industry." Given its broad mandate to adjudicate disputes under a myriad of statutes, it could not be considered "a specialized body of arbitrators who routinely adjudicate claims for accident benefits." Furthermore, the post-April 1, 2016 amendment eliminating the forum 'choice' between litigation and (FSCO) arbitration, eliminates any 'incentivization' to proceed in a specialized forum. Therefore, certain elements of the purposive analysis enunciated by the Court of Appeal would have less application.

Furthermore, section 280(3) limits court proceedings to appeal of a LAT adjudicator's decision and/or judicial review. It is clear from the Insurance Act itself that the courts will be called upon as the highest arbitor of statutory accident benefits disputes. Accordingly, the argument in favour of preliminary "coverage" determinations by the courts, who will in any event, be the ultimate arbitors of the issue, suggests engagement of the courts at the earliest ("coverage") stage would be a more expeditious route. In other words, if the courts are ultimately going to decide the disputes between the parties, it makes sense that this be done sooner rather than later.

The application process under Rule 14 of the Rules of Civil Procedure allows for:

"The determination of rights that depend on the interpretation of a ... contract or other instrument, or on the interpretation of a statute, order-in-council, regulation ..."

This process appears to be designed to expeditiously adjudicate coverage issues such as "accident" issues. While the Rules specify that an application may be brought in respect of any matter where it is unlikely there will be any material facts in dispute, presumably, well-intentioned counsel could agree on the basic facts, so as to have the 'coverage' matter expeditiously determined by the courts, who would be the ultimate arbitors in any event.

As for Mr. Wright, it appears that he has had his day in court whether he intended it or not.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Helen D.K. Friedman
In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.