Tuesday, 13 November 2012

FSCO's Mediation Backlog Is Getting Smaller

There appears to be some good news coming out from FSCO regarding the backlog of mediation cases.  Based on data released by the Commission, the number of disputes waiting to be assigned to a mediator has been falling throughout the year.

At the end of 2011, 29,305 cases were waiting to be assigned to a mediator.  However, the backlog was continuing to increase in the early part of 2012.  A blog post by an insurance stakeholder in May of this year indicated that the backlog was 35,000 cases at the time.  As of September 30, 2012 FSCO reports that the backlog had dropped to 23,745 cases.  That is a 19.0% drop in nine month or as much as a 32.2% drop in just five months based on the unconfirmed figures.

In addition, ADR Chambers was selected by FSCO through a Request for Proposal to provide dispute resolution services specifically to target the mediation backlog.  FSCO began assigning mediation files to ADR Chambers on September 19, 2012.  Up to 2,000 mediation files per month are expected to be assigned to ADR Chambers. This is over and above the files that will continue to be handled by FSCO’s mediators.  Therefore, the mediation backlog may very well be below 20,000 cases at this time.

So how has FSCO tackled the backlog?  Well beside the ADR Chambers contract, the DRS eCalendar has had a significant impact on mediation process at FSCO. 

The DRS eCalendar was first launched in July 2011 and made mandatory on February 1, 2012.  The system allows claimant representatives and insurers to book and manage their files online.  Not only has it freed up mediators’ time from doing scheduling but has allowed the parties to quickly fill up vacant time in the mediators’ calendars resulting in a significant improvement in productivity.  Mediators have been handling many more cases per week – FSCO reports an increase of 63 per cent closed files for the period of February 1, 2012 to August 31, 2012 compared to the corresponding period in 2011.

In addition, the number of applications has begun to drop off.  FSCO stats show that back in 2007 FSCO averaged about 1,200 mediation applications per month.  The application rate steadily rose over the next four years peaking at 3,000 per month in 2011.  Over the first nine months of 2012 the average number of mediation application has been 2,500.  If new applications continue drop off, it will allow FSCO to chip away at the backlog that much quicker.

On February 10, 2012, in Leone and State Farm, a FSCO arbitrator ruled that mediation was deemed to have failed because it did not take place within 60 days of an application being filed and that the parties could not extend the time limit on consent once 60 days had expired.  On July 31, 2012, a decision​ was released by the director’s delegate that upheld the 60-day deemed failure.  This decision has likely had an impact on the backlog by allowing insureds to jump out of the mediation queue. 

FSCO stats show that the monthly average number of cases closed with full settlements and partial settlements increased by 29% and 38% from 2011 to 2012.  However, the monthly average number of cases closed that failed increased by 76% from 2011 to 2012.  So it appears failed mediations may also be having an impact on the backlog.

To head off a possible backlog of arbitration cases, the contract with ADR Chambers includes the ability to assign up to 500 arbitration files per month to the vendors. Again, this is over and above the files that are currently handled by FSCO’s arbitrators.

So when will the backlog disappear?  Well it’s difficult to predict as there are a number of factors chipping away at the numbers.  My guess is that 12 months from now it may be down to 2,000 cases which would be below the number cases waiting to be assigned to a mediator in 2007. 

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