Practice Note 11: Jurisdictional Issues Arising in Mediation

[Information] As of April 1, 2016, the Licence Appeal Tribunal of the Safety, Licensing Appeals and Standards Tribunal Ontario (SLASTO) will assume all new applications for dispute resolution services.
 
Beginning April 1, 2016, FSCO no longer accepts applications for mediation, neutral evaluation and arbitration. This includes applications for arbitration where the Report of Mediator is issued before or after April 1, 2016.
 
FSCO will continue to be responsible for all files remaining open as of March 31, 2016, and the Dispute Resolution Practice Code will only apply to those files.
 
To get more information about accessing auto insurance dispute resolution services as of April 1, 2016 go to http://www.slasto.gov.on.ca/en/AABS/Pages/default.aspx [New Window].

 

This Practice Note is to advise claimants and insurers of the policy of the Financial Services Commission of Ontario ("FSCO") on jurisdictional issues which frequently arise upon entry to the mediation process.


A. GENERAL JURISDICTION:

 

Mediation at FSCO helps to resolve disputes concerning benefits available under the various
Statutory Accident Benefits Schedules ("SABS") passed since June 22, 1990. These benefits are available in respect of personal injuries from motor vehicle accidents. Mediation does not deal with claims that arose out of accidents occurring before June 22, 1990.

1. NO MEDIATION OF CLAIMS FOR PROPERTY DAMAGE

Mediation Services does not accept applications to mediate disputes concerning damage to automobiles or other property except as specifically set out in the SABS.

2. NO MEDIATION OF A CLAIM FOR WEEKLY BENEFITS FOR THE FIRST WEEK OF DISABILITY

The SABS provide that no weekly benefit is payable for the first week of disability. Mediation Services does not accept applications to mediate a claim for entitlement to a weekly benefit for the first week of disability.

3. NO MEDIATION WHERE A CLAIM FOR ACCIDENT BENEFITS HAS NOT BEEN SUBMITTED TO INSURER

Claimants may use the services of mediation when an accident benefit has been claimed from an automobile insurer and denied. Claimants are entitled to receive written notice from the insurer of a refusal to pay a claim along with an explanation for the refusal. Mediation Services does not accept an Application for Mediation where the claimant has not first submitted his or her claim to the insurer. Where a claim has been submitted to an insurer and the time specified in the regulation for reviewing the claim by the insurer has expired, Mediation Services will accept the Application for Mediation on the basis of the insurer's deemed denial.

4. PREVIOUSLY MEDIATED ISSUES

Mediation Services does not re-mediate issues that have been dealt with in a previous mediation and the Report of Mediator states that the issue was not resolved. The options after a failed mediation, are:


  • take no further steps;
  • file an Application for Arbitration at FSCO;
  • appoint a private arbitrator pursuant to the provisions of the Arbitration Act and the Insurance Act;
  • request Neutral Evaluation, privately or through an Application for Arbitration at FSCO;
  • commence a court action.

5. SPECIAL AWARD

Mediation Services does not accept an Application for Mediation of a claim for a Special Award, as this is not a benefit provided under the SABS. A special award is a matter of the exercise of an arbitrator's discretion.

6. LEGAL EXPENSES

Mediation Services does not accept applications to mediate a dispute over legal fees and disbursements, as this is not a benefit provided under the SABS.

An award of legal expenses is a hypothetical matter that does not arise until the arbitration or court proceeding is concluded. Therefore, the issue must be addressed as part of the arbitration or court proceeding.



B. EXPIRY OF LIMITATION PERIODS

1. TIME LIMIT TO APPLY TO INSURER FOR ACCIDENT BENEFITS
 

  1. The Statutory Accident Benefits Schedules establish time limits for applying for accident benefits. However, late applications must be accepted if the insured person has a "reasonable excuse" for the delay.

    Disputes concerning whether a delay was reasonable will be accepted for mediation. The preliminary issue concerning the reasonableness of the delay will be mediated along with the disputes concerning the statutory accident benefits claimed in the Application for Mediation.

  2. Exception. There is an exception for accidents that occurred on or after June 22, 1990 and before January 1, 1994. The Schedule (Bill 68) provides that an injured person must apply to their insurer for accident benefits within two years after the accident. If no claim for accident benefits is made to the insurer within two years, FSCO has no jurisdiction to mediate. However, disputes concerning whether a claim for benefits was made to the insurer within two years will be accepted for mediation. The preliminary issue of whether the limitation period to claim benefits has expired, will be mediated along with the disputes concerning statutory accident benefits claimed in the Application for Mediation.

2. TIME LIMIT TO APPLY TO FSCO FOR MEDIATION OF DISPUTES OVER BENEFITS
 

The SABS provide that a claimant may commence mediation at FSCO within two years of the insurer's written refusal to pay the benefit claimed. Mediation Services does not accept an Application for Mediation if it is made to FSCO beyond two years. However, disputes concerning whether an Application for Mediation was made to FSCO within two years of the insurer' written refusal to pay benefits will be accepted for mediation. The preliminary issue of the expiry of the limitation period will be mediated, along with the disputes concerning statutory accident benefits claimed in the Application for Mediation.

If the limitation period issue arises in the Mediation intake process, the mediation caseworker will notify the claimant of the limitation period and will require the claimant to provide a letter confirming that he or she wishes to dispute the expiration of the time limit. If the issue is raised by the insurer during the mediation process, no letter from the claimant is required.



C. DISPUTES BETWEEN INSURERS – REGULATION 283/95


Mediation Services does not deal with disputes about which of several insurers is required to pay the claimant's SABS  in accordance with applicable regulation(s). Please refer to Bulletin No. A-07/10 Property & Casualty – Auto.



D. FULL and FINAL RELEASE – SETTLEMENT REGULATION 664 AS AMENDED


Mediation Services does not accept an Application for Mediation where a claimant has signed a valid full and final release of his or her entitlement to SABS arising from the motor vehicle accident in question and the insurer has complied with the requirements of the Settlement Regulation.

Mediation Services will accept an Application for Mediation where:


  1. the claimant disputes the validity of the settlement, such as whether the insurer has complied with the requirements of the Settlement Regulation.
  2. a court or private arbitrator has set aside a previous settlement on such grounds as fraud, duress or misrepresentation;
  3. the parties agree to set aside the settlement;
  4. the claimant resiles from a settlement within the 48 hour cooling off period in accordance with the Settlement Regulation (See Practice Note 2, "Reaching a Settlement within the Dispute Resolution Process");

The preliminary issue of the validity of the settlement will be mediated along with the disputes concerning statutory benefits claimed in the Application for Mediation.

Mediation Services will not re-mediate issues that have been dealt with in a previous FSCO mediation as reflected in the Report of Mediator. The options after a mediation where issues were reported as resolved but the validity of the settlement is now in dispute, are:


  • take no further steps
  • file an Application for Arbitration at FSCO
  • appoint a private arbitrator pursuant to the provisions of the Arbitration Act and the Insurance Act.
  • request Neutral Evaluation, privately or through FSCO
  • commence a court action.


E. APPLICATION FOR A NON- EARNER BENEFIT SUBMITTED TO THE INSURER PRIOR TO 26 WEEKS


For accidents occurring on or after November 1, 1996 (Bill 59), a claimant may be eligible to receive a Non-Earner Benefit, 26 weeks after the onset of disability. Mediation Services does not accept applications to mediate the issue of entitlement to a Non-Earner Benefit prior to the expiry of the 26 week period.



HOW DO I GET MORE INFORMATION?


The Commission telephone numbers are:

From Toronto, call: (416) 250-6714
From outside Toronto, phone: 1-800-517-2332

To reach the Office of the Insurance Ombudsman at the Commission, the telephone numbers are:

From Toronto, call (416) 250-7250
From outside Toronto, phone 1-800-668-0128

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