New Auto Insurance Legislation and the Cunningham Report

The Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 was introduced last week. The new law proposes several changes to the auto insurance dispute resolution system. One major change is that arbitration for auto insurance disputes will now take place at the License Appeals Tribunal, rather than the Financial Services Commission. The Act is broadly worded, creating a legislative framework for more changes to come in the form of regulations.

The Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 represents the legislature’s action on the recommendations made in the Cunningham Report. Some critics suggest, however, that the new law is too loosely based on the report, if at all.

In 2013, the Ontario Finance Minister Charles Sousa commissioned Justice Cunningham to produce a report with recommendations for changes to be made to Ontario’s auto insurance dispute resolution system. Some of the issues to be addressed by the report were the backlog of applications for mediation services and the sheer volume of claims. Another question to be considered was whether the system should remain public or become privatized.

Justice Cunningham’s main recommendations, as summarized here by Willie Handler, were:
• That auto insurance arbitrations be dealt with by a new tribunal
• That the system remain public, but the tribunal contract out backlogged claims to private providers of dispute resolution services
• A streamlined process whereby claims are decided within six months
• No more mandatory mediation
• Creating three streams for arbitration: paper reviews for claims under $10 000 and minor injuries; full in-person hearings for cases involving catastrophic impairment; and expedited in-person hearings for those cases that fall between the two latter streams
• Costs penalties for a party’s failure to comply with timelines
• That insurance companies be required to have internal review processes in place
• New incentives for parties to settle earlier in the process
• Requirements that experts provide only fair objective evidence

Justice Cunningham made 28 recommendations in total in his final report. The introduction of the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 is only the beginning of many changes to come in the fields of automobile insurance disputes and personal injury law.

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Melissa Wixson is a Paralegal student at Centennial College in Toronto studying professional communications with Omar Ha-Redeye.

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