The Court of Appeal today released an important decision in relation to disputes arising from denial of a benefit under the Statutory Accident Benefits Schedule (SABS).
The SABS require a person to mediate a dispute with their insurer before the Financial Services Commission of Ontario (FSCO) prior to being able to commence a lawsuit.
In recent years FSCO has developed a backlog of 8-12 months to obtain a mediation date for denial of benefits. This has been a huge barrier to justice for injured claimants and a strategic advantage to insurers who can deny benefits knowing that it will be years before the claimant can get them in front of a judge or arbitrator.
Today the court confirmed that a claimant who has had a benefit denied need wait only 60 days after filing the dispute forms to begin their lawsuit or arbitration. The court stated:
“…the act, the regulations and the DRPC make it clear that the process is intended to be completed within sixty days from the filing of an application for mediation with FSCO, unless the parties agree to an extension of time. The scheme postpones the right of insured persons to commence civil actions against their insurers in order to allow the mediation process to be completed within the time prescribed, but leaves them free to commence actions once that period has expired.”
As also observed by the Court of Appeal “the failure of a statutory actor to perform a statutory duty does not eliminate a person’s rights granted by the statute.”
The decision will have a significant impact on a person who has been injured in a car accident, is unable to work and is being denied income replacement benefits.
While resolution of the issue may still take some time, claimants can at least avoid the 8 month delays they have faced to date while waiting for a FSCO mediation.
The decision in Hurst v. Aviva can be found at: http://www.ontariocourts.ca/decisions/2012/2012ONCA0837.htm