Law Times

Law Times • January 6, 2014 Page 11 FOCUS Cunningham report Diverse opinions on dispute resolution pouring in BY JuDY VAN RHIJN For Law Times R esponses to the interim report of former Superior Court associate chief justice Douglas Cunningham on the auto insurance dispute resolution system have been coming thick and fast since its release last year. As always in this controversial area, there's a broad array of opinions but also several common themes. Most noticeable is a fear of the loss of the undisputed expertise of the specialist mediators and arbitrators at the Financial Services Commission of Ontario if the government adopts Cunningham's proposal for a new model of dispute resolution. Cunningham raises the prospect of moving the dispute resolution function out of the FSCO in response to concerns about a conflict of interest between the regulatory and adjudicative branches. Despite several opinions suggesting that has never been an issue in 23 years of regulation, there's little opposition to the idea. However, there's considerable angst on both the plaintiff and defence sides of the industry over the proposal to contract out the adjudicative function to the private sector. Intact Financial Corp. reflected the concern when it noted "the insurance industry has now had nearly a quarter of a century experience of adjudicating matters before a public tribunal. It is from this wealth of experience, rather than nostalgia, that Intact submits that the adjudicative arm of FSCO ought to remain a public sector tribunal. . . . One must not underestimate the value of a captive audience of specialists solely responsible for adjudicating [auto insurance] disputes." Charles Gluckstein, president of the Ontario Trial Lawyers Association, agrees there would be significant concern over predictability and accountability. "The fear with private arbitrators is that there is no quality control." Similar submissions have come from stakeholders as diverse as the Fair Association of Victims for Accident Insurance Reform, Kahler Personal Injury Law PC, the Canadian Centre of Excellence in Injury Law, and the Co-operators Group Ltd. Critics recommend allowing FSCO the flexibility to increase positions as demand dictates rather than going to an external solution. The Insurance Bureau of Canada states: "There are no guarantees that a private company would provide better decisions on matters of dispute. FSCO staff are well versed in the [statutory accident benefits schedule]." Even insurers that support the move place a great emphasis on the need for specialist knowledge among the adjudicators. The preferred approach of the Ontario Bar Association, meanwhile, is to build on the strengths of the existing FSCO system with overflow into the private sector if necessary. In a number of rare public statements, the FSCO staffers and their representative body, the Association of Management, Administrative, and Professional Crown Employees of Ontario, cited the importance of their status as salaried public sector workers. "The fact that we are salaried employees positively impacts our neutrality, as our income is not determined by the outcome of the mediation. We are all in one location, which means we can hold face-to-face mediations . . . are able to fill in for each other so the claimant's timeline is not compromised, and have constant access to each other's knowledge base and extensive experience." The Association of Management, Administrative, and Professional Crown Employees of Ontario says the arguments for moving these functions to the private sector or to a part-time roster system don't seem compelling. "Indeed, the risks of jeopardizing the quality and impartiality of the current system in moving to an external approach seem huge, with potential negative impacts on both consumers and the insurance industry," it says. Gluckstein suggests there may be no savings from the change. "Arbitrators are not overpaid. It would be hard to replicate their salary structure in the private sector," he says. Personal injury and commercial litigation firm Taylor Steinberg & Baber PC submits resources should go to fixing the current system by addressing policy missteps and giving arbitrators enforcement powers. There are contentions the interim report contains some misconceptions about the current functioning of the FSCO system. 'The fear with private arbitrators is that there is no quality control,' says Charles Gluckstein. Gluckstein thinks it's unfortunate the report came so soon on the heels of the backlog problem. Mediations are now occurring within their 60-day time limit and there are no perceivable problems in getting arbitration dates or with the length of arbitrations. "We are having arbitrations as early as we need them and currently, the average length of a hearing is 1.8 days," says Gluckstein. "I'm not sure why they think arbitration will go on for weeks like court cases. In the last three years, only seven hearings lasted more than 10 days as almost every personal injury matter in court in Ontario does." In fact, the Ontario Trial Lawyers Association said "there is no demonstrable need to alter a hearing system that is functioning smoothly and efficiently for nearly all claims." Similarly, proposals to redirect appeals away from the director delegate fall on the sword of specialization with concerns by insurers and plaintiff lawyers that the overburdened court system couldn't offer the required expertise unless there was a specialized See Cost, page 12 Kyla A. 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