The Interim Report of the Ontario Automobile Insurance Dispute Resolution System Review is now online. The interim report provides an overview of the history and structure of the Ontario auto insurance DRS, the structure of auto insurance dispute resolution systems across Canada and in other jurisdictions and trends in the current Ontario DRS, including outcomes of recent court and arbitration decisions. It also makes a few recommendations and sets out a possible framework for a future DRS.
The report recommends that mediation no longer be mandatory in its current form. It suggests that the government consider introducing a new system that consolidates the strengths of the existing mediation and arbitration processes to facilitate a more efficient model for resolving disputes.
It also recommends that the government consider that FSCO’s DRS adjudicative functions be delivered externally. The final report will address whether the adjudicative functions should be established in an independent public sector tribunal or in the private sector.
The proposed model set out in the report would provide a process that takes no longer than six months from start to finish. Cases would follow a different stream based on the benefits in dispute and the complexity of the issues involved.
The process would begin with a benefit denial. Every Ontario auto insurance company would have to establish a formal internal review process. A claimant wishing to dispute a benefit denial would first have to meet with their insurer to clarify why they believe the insurer was incorrect and present any new information to support their claim.
If the parties cannot resolve their dispute, the claimant would then be free to file an application with the new ADR body (whether in the private sector or within a tribunal) or perhaps they could access the courts at that stage. Cases using the court option would be subject to the rules and timelines of the court system.
If the claimant chooses ADR, a case manager serving as a gatekeeper to the process would review each application to determine whether the parties are ready to proceed through the system. The case manager would determine whether there are jurisdictional issues to be addressed and whether a proper exchange of documents has taken place. The case manager would have the ability to return the application if there were any outstanding issues.
Once everything is in order, the case would immediately be assigned to an arbitrator, who would arrange a mediation session within 45 days, which would be a hybrid of the current mediation process and pre-arbitration hearing. During this stage, the arbitrator might provide a non-binding opinion on the likely outcome; in other words, the mediation session could potentially be a more evaluative process. Should the mediation fail to produce a settlement, the arbitrator would immediately schedule a hearing for the parties.
The arbitrator would also perform a triage role at this point to determine whether the case should be subject to a paper hearing, an expedited summary in-person hearing or a full in-person hearing. For a paper hearing, the parties would submit their final positions in writing along with all supporting documentation, and the arbitrator making a decision based on a document review.
For an expedited in-person hearing, the parties would submit supporting documentation, including affidavits and expert reports. Although testimony and cross-examination could take place within set time parameters, the use of expert witnesses would not be permitted. Expedited hearings would take no longer than half a day.
More complex cases, such as catastrophic impairment determinations, would be permitted to make use of expert witnesses but still would be limited to a short timeframe.
The paper hearing would take place within 60 days of the mediation, while in-person hearings would take place within 90 days.
There would be rules established, perhaps in regulations, setting out timelines, sanctions for non-compliance and other provisions to ensure the parties follow the principles set out in this report. There should be a prohibition on adjournments in all but the most exceptional cases. The length and content of expert reports would be restricted. Each case would be decided on the merits of that case alone. Arbitrators would be required to follow the policy intent of the regulations and the Superintendent’s interpretive guidelines.
Arbitrators would have discretion to assign costs to either side when warranted. Fees may differ depending on the type of hearing.
Decisions should be issued within 45 days of an in-person hearing. For paper hearings, decisions should be issued within 30 days. The process from application date to the issuing of a decision would be four and a half months for paper arbitrations and six months for in-person arbitrations.
Appeals would be heard by a single judge of the Superior Court.