Canada: No Jurisdiction At The LAT For Arbitration Proceedings: Commenced But Not Completed At FSCO

The transition of the forum for Statutory Accident Benefits disputes from the Financial Services Commission of Ontario ("FSCO") to the Licence Appeal Tribunal (the "LAT"), effective April 1, 2016, was not as seamless as anticipated and continues to be the subject matter of ongoing adjudication.  Transitional issues involve the impact of the 90-day period post-mediation, limitation periods and the jurisdiction of the LAT to hear disputes commenced at FSCO but not completed at FSCO.

This latter issue has recently been adjudicated by the LAT in Y.C. v. Economical Insurance Company (18-008802/AABS, August 28, 2019).  In Y.C., the LAT determined it did not have jurisdiction over the dispute, which had been commenced by way of arbitration at FSCO but not completed.

The particular circumstances involved a FSCO arbitration proceeding commenced by Y.C. in February 2016 with an arbitration hearing scheduled to proceed November 14 – 17, 2017.

Approximately one month prior to arbitration, Y.C. and Economical, through their respective counsel, agreed to settle Y.C.'s Statutory Accident Benefits entitlements on a full and final basis.  A Release and Disclosure Notice were provided to Y.C.'s counsel for Y.C.'s signature.  Both counsel advised FSCO the matter had resolved and requested the arbitration be cancelled.  However, on December 19, 2017, Y.C.'s counsel advised Economical that Y.C. would not sign the settlement documents.

Ten months later, on September 15, 2018, Y.C. filed an application at the LAT seeking entitlement to Non-Earner Benefits (one of the issues in dispute in the FSCO arbitration).  Economical raised the LAT's jurisdiction to hear the Non-Earner claim as a Preliminary Issue.

Economical argued that as of April 1, 2016 (the "transition date"), the LAT was given jurisdiction over all future Accident Benefit disputes, however, Y.C. had commenced her arbitration at FSCO and the arbitration was not completed prior to the transition date of April 1, 2016.

Economical referenced the transitional provisions contained in section 21 of the Ontario Regulation 664 (the "O. Reg. 664") which provides:

(1)  A proceeding described in subsection (2) that was commenced but not completed before the transition date is continued after that date.

(2) The proceedings referred to in subsection (1) are the following:

[...]

3. An arbitration under section 282 of the pre-transition date Act.

Furthermore, the transitional provisions stipulate:

20(3) The powers and duties that the officials referred to in subsection (1) had before the transition date continue, with necessary modifications, for the purposes of proceedings continued under section 21 of this Regulation or that may be commenced under section 22 of this Regulation.

Because the purported settlement agreement was not completed by Y.C., and the dispute was not subject to a final adjudication by an arbitrator by April 1, 2016, Economical argued the appropriate course of action was to continue the dispute at FSCO.  Economical also argued the mere fact that FSCO may have "closed its file" (which was not established on the evidence) did not cause the dispute to "magically disappear".  A dismissal or some other finality to the arbitration was still required.

As noted by Delegate Evans in Botezatu v. Certas Home and Auto Insurance Company (FSCO Appeal P18-00036, December 12, 2018):

However, the mere fact that FSCO closed its file did not make the dispute magically disappear.  That is why counsel for insurers often sought dismissal orders after a settlement and a resulting file closure, as until there was a dismissal, the dispute still existed....In addition, FSCO often reopened files to deal with ongoing disputes after alleged settlements.

The Tribunal agreed with Economical, specifically finding there was no final disposition or adjudication of Y.C.'s arbitration at FSCO and, therefore, the FSCO process was not "complete" for the purposes of O. Reg. 664.

Requesting the arbitration dates be vacated was not enough to "complete" a matter.  By analogy, the Tribunal noted if a settlement reached at the Tribunal was rescinded, the Tribunal's file would be reopened even if it was previously considered "closed".  The Tribunal found that this was Y.C.'s situation at FSCO and she was required to continue her application in that jurisdiction.

The adjudicator distinguished the decision 17-009243 v. Gore Mutual Insurance Company, 2018 CanLII 83531 (ON LAT), submitted by Y.C., in which a jurisdiction argument had been raised by the insurer. He noted Economical's submissions citing specific provisions of O. Reg. 664, which were not presented before the Tribunal in 17-009243. 

Accordingly, the decision in Y.C. v. Economical provides a path for insurers who are faced with a resurgence of matters settled in the course of FSCO disputes in which there was no final adjudication.  The application of Y.C. may be time-limited, nevertheless, it provides guidance with regard to the LAT's jurisdictional provisions.  Furthermore, although not cited in the decision, Rule 3.4 of the LAT's Rules of Practice and Procedure provide that the Tribunal may dismiss an appeal without a hearing where it relates to a matter outside its jurisdiction or where the statutory requirements for bringing an appeal have not been met.  In Y.C., as the dispute remained within FSCO's jurisdiction, it is outside the Tribunal's jurisdiction and subject to dismissal under Rule 3.4.  Similarly, where the transitional provisions of O. Reg. 664 provide that the dispute is continued in the venue where it was commenced, the statutory requirements for bringing an appeal to the Tribunal have not been met and would be subject to dismissal under Rule 3.4 without a hearing.

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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