FSCO Mediation Delay Results in Many Claims Going to Small Claims Court

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Until recently, FSCO tried to adopt a variety of strategies to reduce its mediation backlog. These measures may no longer be required.

In a January 16th ruling Justice Sloan in the matter of Nicholas Leone v. State Farm Mutual Automobile Insurance Co. determined that the 'prescribed time for mediation in s. 10 of Ontario Regulation 664 is 60 days from the date the application for the appointment of a mediator was filed. Thus if the mediation hasn't happened in the 60 days parties are now free to proceed with arbitration or litigation.

In an April 5, 2012 article, the Law Times has reviewed this decision and what has happened since. When Alexander Coudouris of Lofranco Forriero in Toronto was asked why it took so long for this interpretation of the legislation to appear, he said

“I think the answer is that it never occurred to anyone to go back to the original legislation and see if there was a time limit there. We eventually became so frustrated and upset that we went back and did just that.”

Since this decision some lawyers have begun to press the issue, issuing statements of claim, many in small claims court. Insurers who threatened to bring motions to stay were deterred after reading the legislation, regulations, and the dispute resolution code. Insurers have begun to settle on a full and final basis.

It would appear that the insurance companies' position that victims must simply wait is no longer acceptable. This ruling may go a long way to evening the playing field between the plaintiffs and insurance companies, but it is being appealed by FSCO to the Court of Appeal. FSCO has also requested a stay of the arbitration order.

It's an interesting time at FSCO. We will have to wait to see what the final impacts of these rulings will be.