Law Times

Law Times • September 30, 2013 FOCUS Page 13 Lawyers surprised at elimination of FSCO mediation backlog Contracting to ADR Chambers helps wipe out long wait times in insurance matters BY JuDY VAN RHIJN For Law Times I n light of the sudden demise of the mediation backlog at the Financial Services Commission of Ontario, plaintiff lawyers who had previously adopted a strategy of ignoring the system and heading straight for litigation are now rethinking their position. On Aug. 19, 2013, the Financial Services Commission of Ontario announced it had eliminated the mediation backlog that had imposed huge wait times in accident-benefits cases over the last few years. A combination of procedural changes and the involvement of outside contractor ADR Chambers has returned the system to the timelines first envisioned by the authors of the scheme. The change has caught many lawyers by surprise. Helen Friedman of Miller Thomson LLP in Waterloo, Ont., is finding plaintiffs' counsel are often not ready for mediation within the 60-day limit. "They file an application for mediation and then expect to sit on a file for six months or a year. Now that the turnaround time is as quick as a month, there is amazement and perhaps dismay. They need to retool their practices and start thinking that mediation will be coming up soon." Adam Wagman of Howie Sacks & Henry LLP calls the achievement a "game changer" on the mediation front. "The bar was extremely concerned about the backlog and the alternative, which was the deemed failure. If the alternative is to wait a year or have no mediation at all, that's really no good." Richard Worsfold of Basman Smith LLP is happy there's now an opportunity to discuss the matter in mediation at a much earlier stage but believes it often takes the next step for proper settlement negotiations to occur. "You may need to get well into arbitration or litigation to have a proper discussion. The good thing is that this has eliminated the hurdle we used to have to get to that next step. It is no longer an onerous delay tactic to go to mediation." Worsfold believes it wasn't just the mediation backlog that was making people go to court. "Other factors make people lean to courts. The dispute resolution code has stringent restrictions on costs and reimbursements, such as expert reports. Many lawyers go to court simply because you can get disbursements paid and in some court systems cases can still move along quite quickly." Barbara Legate of Legate & Associates LLP in London, Ont., hasn't decided to change her approach. "We hope that lessons have been learned from this process and that a year from now FSCO won't be in the same situation it was before the backlog was attended to. Let's hope that systemic administrative change has occurred. For now, my firm will stay the course and issue claims but test the new system with smaller issues." Legate premises a concern shared by personal injury lawyer Steve Rastin that it was the work of the outside contractor that allowed FSCO to get ahead of the curve. "Will it be able to stay there? The feedback from lawyers is that there is a high degree of confidence that if you file today, you will get heard quickly. There are currently a lot of disputes about what constitutes the [minor injury guideline], but I expect that's a bubble. There is optimism that the era of long waits is at an end." Charles Gluckstein, president of the Ontario Trial Lawyers Association, doesn't think the backlog will return given that applications for mediation are decreasing. "That's a symptom of the policy that the MIG captures 60 to 70 per cent of accidents," he says. "Unfortunately, people don't have much to dispute." FSCO reports that applications for mediation have dropped by 30 per cent over the past year as a result of the changes. It's ironic that as recently as Aug. 23, concerns over the backlog led the government to institute a review of the dispute resolution system for accident benefit claims by former Superior Court justice Douglas Cunningham. He has invited stakeholder submissions to consider for an interim report in October 2013 and a final document in February 2014. Bankruptcy a complicating factor Continued from page 12 but to improve safety. "There's a disconnect between making it safe and finding who is responsible for paying. Their purview is the scope of environmental damage. Are the regulations in place to ensure it doesn't happen again? However, it does give litigators a sense of where to look." Parties will also be looking at the report of the trustee in bankruptcy that will be auditing the practices and procedures of MMA. "If the trustee reports on relevant practices, the parties will want to seek more informa- tion," says Puddister. The bankruptcy is a further complication to the already highly complex situation. "Any claim is stayed by virtue of the bankruptcy," says Puddister. MMA is on the market with an expected sale by the end of the year. The company has announced that any proceeds from the sale will help repay creditors and victims in order to supplement $25 million in insurance payouts available for wrongful death, personal injury, property damage, fire suppression, and environmental impacts. LT all they did was increase the num"Had he been looking at this ber of mediations held but they issue a year or six months ago, weren't as effective, they've passed there would have been a lot of it on," says Wagman. input from the bar to scrap the "In my experience, you can system," says Wagman. still get arbitration dates on a "The system that had been timely basis and we are hoping it designed to assist had become will remain like that but we're not a barrier. He'll hear something in the clear yet." very different now." Friedman believes the perGluckstein has been finalizing centage of resolutions is also the OTLA submissions to the task down because of the nature of force. "We're basically feeling that the claims. "A lot of insurers are if the mediation system operates not settling minor injury claims as it is now, it will still serve a benat mediation, which puts preseficial function. Given that 65-70 sure on arbitration downstream." per cent of claims settle at mediaAs of Sept. 3, FSCO increased tion, we would hate to clog up the Plaintiff lawyers 'need to retool their pracsystem of arbitration with those tices and start thinking that mediation will the number of prehearings schedclaims unnecessarily. We would be coming up soon,' says Helen Friedman. uled per day to three from two and has reduced their duration to prefer an opt-out system. There are lots of claims where FSCO mediation is not appropri- 90 minutes from two hours. It's also assigning files to ate, for example, where we've already tried to discuss ADR Chambers in order to meet the high volume of it and the insurer is entrenched. Catastrophic claims proceedings, but there's concern among the insurance are rarely dealt with successfully by FSCO mediation. bar that the outside contractors don't have the same It should be possible to opt out without the consent of level of expertise as the FSCO arbitrators. "There is the insurer and without a reason. Simply moving on nothing wrong with the way the arbitration wing functions," says Gluckstein. "It has been successful to the next phase would be more efficient." In fact, the new area of concern is a potential arbi- and popular because FSCO arbitrators have a strong tration backlog. Since 2006, the number of applica- working knowledge of the ins and outs of the Insurtions for arbitration has increased dramatically. Case ance Act. That is the reason people choose arbitration law has allowed deemed failures to head straight to instead of court. If the government decides to privathe arbitration stream and mediation settlement tize and we are left without a specialized tribunal, I rates have fallen to 50 per cent over the last year. "If believe applications for arbitrations will drop off." LT TRUST you're putting your reputation on the line. It's all about trust well placed. STACEY STEVENS | DAVID MACDONALD | MICHAEL BENNETT Since 1936 Thomson, Rogers has built a strong, trusting, and collegial relationship with hundreds of lawyers across the province. As a law firm specializing in civil litigation, we have a record of accomplishment second to none. With a group of 30 litigators and a support staff of over 100 people, we have the resources to achieve the best possible result for your client. Moreover, we are exceptionally fair when it comes to referral fees. We welcome the chance to speak or meet with you about any potential referral. We look forward to creating a solid relationship with you that will benefit the clients we serve. YOUR ADVANTAGE, in and out of the courtroom. TF: 1.888.223.0448 T: 416.868.3100 W: www.thomsonrogers.com www.lawtimesnews.com Untitled-2 1 13-09-26 8:09 AM

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