Bill 15: Further erosion of rights and benefits for auto accident victims

Bill 15, Fighting Fraud and Reducing Automobile Insurance Rates, 2014  received Royal Assent on November 20, 2014.

The entire bill can be found on the Legislative Assembly of Ontario website.

This Bill amends four pieces of provincial legislation:

  1. The Consumer Protection Act, 2002
  2. The Highway Traffic Act
  3. The Insurance Act
  4. The Repair and Storage Liens Act

Additionally, because of the changes to the Insurance Act, it also provides for amendments to the Financial Services Commission Act, 1997, the Licence Appeal Tribunal Act, 1999, and the Motor Vehicle Accident Claims Act.

The Insurance Act changes have not yet come into effect.  These amendments will only come into force on a date, yet to be named, by proclamation of the Lieutenant-Governor.

There are substantial changes afoot for injured motorists:

  • Arbitrations, formerly conducted through the Financial Services Commission of Ontario “FSCO” will be conducted instead by the Licence Appeal Tribunal “LAT” a little known tribunal that has historically arbitrated matters far removed from the volume and complexity of statutory accident benefit claims.  It is unclear how FSCO can be disbanded and the LAT upgraded to handle the volume of disputes that need resolution.  As I have posted in an earlier blog, we currently have an arbitration backlog at FSCO.  It is unclear whether the FSCO arbitrators will be transferred to LAT, or whether a whole new slate of arbitrators will be added to LAT.  It is abundantly clear that LAT could never handle the number of disputes that would need adjudication, absent a significant expansion to its roster of arbitrators.   The existing FSCO arbitrators possess a great deal of specialized knowledge about statutory accident benefits.    It is hoped that their expertise will not be lost with this shuffle.
  • Coupled with the diversion of arbitrations to the Licence Appeal Tribunal will be a prohibition on the right to sue in the Superior Court of Justice for any accident benefit dispute.  The appeal path from the LAT will be an appeal directly to the Divisional Court.  It is unfortunate that the government did not heed the unanimous call of such professional organizations as The Advocates’ Society, The Ontario Trial Lawyers Association, and the Canadian Defence Lawyers, each of which pleaded with the government not to implement the prohibition on accident benefit lawsuits.
  • Currently the prejudgment interest rate on claims for pain and suffering in personal injury actions is fixed at 5% pursuant to Rule 53.10 of the Rules of Civil Procedure.  Bill 15 now exempts motor vehicle claims from the 5% prejudgment rate that would otherwise apply to non-pecuniary claims.  Once Bill 15 comes into force, the rate of interest applicable to the pain and suffering portion of an award will be equal to the prescribed rate as outlined in the Courts of Justice Act, which, is currently 1.3%.  There will be a reduced incentive for insurers to settle claims.  The cost of delay will now be less than the likely yield on investments made by insurers.  No other personal injury claimants are singled out like this.  Injuries that arise from a slip and fall, or an assault, or by any means other than as a result of a car accident will still attract the 5% prejudgment interest rate set by Rule 53.10.
  • There will be many details to follow, being outlined in regulations that have yet to be drafted or distributed to the public.  As with much of what the government does “the devil will be in the details”.  It is expected that the uncertainty generated by Bill 15 will require litigation for years to come.  One thing that is not uncertain is the continual erosion of the rights of injured motorists and those who have been injured by a motorist
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