Law Times

Law Times • march 31, 2014 Page 9 www.lawtimesnews.com Focus on ADR Bar surprised at province's moves on Cunningham report Bill 171 includes move of dispute resolution to Licence Appeal Tribunal hile the final re- port on the auto insurance dispute resolution sys- tem authored by former justice Douglas Cunningham arrived in February with barely a ripple, the legislation tabled to imple- ment it has caught the insurance bar and industry by surprise. While many observers found the report fair and balanced and most of the recommendations palatable, critics describe the ta- bling of bill 171, which identifies the Licence Appeal Tribunal as the new location for the dispute resolution section of the Finan- cial Services Commission of Ontario, as "out of le field" and "mind-boggling." Section 280 of the fighting fraud and reducing automobile insurance rates act provides that in the future, a tribunal with a relatively small caseload and part-time staff will deal with dis- putes. e Licence Appeal Tri- bunal deals with compensation claims and licensing activities regulated by several provincial ministries. Its most recent statis- tics show that from April 1, 2012, to March 31, 2013, it opened 673 appeals regarding liquor licenc- es, motor vehicle impoundment, Ontario new home warranties, medical suspensions of driver's licences, and appeals under the Motor Vehicle Dealers Act. "Be careful what you wish for," warns Charles Gluckstein, President of the Ontario Tri- al Lawyers Association. "We asked Mr. Cunningham to leave the dispute resolution system in the hands of government. We hoped that the same arbitrators would still be doing cases out of a different office, perhaps called dispute resolution services. If you look at what the Licence Appeal Tribunal does now, they are not equipped to deal with the caseload generated by the auto insurance system." In fact, Cunningham flagged the idea of incorporating insu- rance disputes into an existing tribunal so that the dispute resolution staff would no lon- ger report to the superintendent but to a responsible minister. e approach would address the conflict of interest between the regulatory and adjudicative duties of FSCO. Cunningham noted that, in the last few years, the provincial government had transferred clusters of tribunals to the Ministry of the Attorney General to promote efficiencies and access to justice. He re- commended examining them for suitability in relation to the dispute resolution system but emphasized the need to reco- gnize the existing expertise and experience at FSCO. In 2013, the government clustered the Licence Appeal Tribunal with four other adjudicative bodies as part of the Safety, Licensing Ap- peals, and Standards Tribu- nals Ontario. A spokesman for the Ministry of Finance notes the Licence Appeal Tribunal's capacity to admi- nister the new automobile insurance dispute resolution system due to its nature as an established body with profes- sional adjudicators and rules and procedures that align with many of the recommendations of Cunningham's review. e tribunal's "jurisdiction complements the purposes of bill 171 providing an independent body in which the recommenda- tions of the . . . review can be im- plemented," says Scott Blodgett. When asked if the staff or just the files would be part of the transfer, Blodgett says that if the legisla- ture passes bill 171, a transition strategy will ensure an efficient move between the existing sys- tem at FSCO and the new one at the Licence Appeal Tribunal. e lack of detail worries the likes of Mark MacNeill of Brauti orning Zibarras LLP given that FSCO deals with more than 10,000 applications per year and has a backlog of more than 15,000 arbitration cases. "e number of matters that the li- censing appeal board deals with pales in comparison to the num- bers that FSCO deals with, and the statutory accident beneficia- ry articles are almost as compli- cated as the provincial tax code. e system has morphed into a highly adversarial system. Taken as a whole, there are no huge changes in the report's recom- mendations as long as they use the same arbitrators. Any gigan- tic shi in the system leaves us looking for precedents for years." Mike Smitiuch of Smitiuch Injury Law PC also has con- cerns. "In my view, I don't think people are worked up about where it is located," he says. "Moving where the disputes are heard is just bureaucratic shuffling. It will be more of the same — a Band-Aid on a gaping wound — unless they address the systemic problems." Ralph Palumbo, Ontario vice president of the Insurance Bureau of Canada, also hopes the new system will retain the expertise of the FSCO arbitra- tors. "I have to admit I wouldn't have thought of that particular tribunal, but upon reflection, it's not a surprise. e Ministry of the Attorney General has many administrative tribunals within its ministry." Palumbo focuses on the benefits inherent in an admin- istrative tribunal. "One thing is that you'll get an independent, more neutral tribunal that will maintain the expertise and experience of the current . . . sys- tem. Another advantage is that adjudicators are appointed un- der an order in council, so they are much more accountable to government. One of our con- cerns is that decision-making is not transparent and there is not much in the way of accountabil- ity for civil servants." For Smitiuch, the speed at which the government intro- duced bill 171 came as a surprise. "One thing I found puzzling is that the government moved so quickly to pass legislation without taking into account the other pieces of informa- tion that are expected shortly. e auto insurance three- year review and a transpar- ency and accountability re- port are both due out later this month." Palumbo notes that while the government can imple- ment many of the recom- mendations in the Cun- ningham report through regulation, it first needs to move legislatively. "Bill 171 recognizes that the . . . sys- tem is broken. It has certainly failed to meet the demands of claimants and insurers. Bill 171 is very light in terms of specifics but it lays the foun- dation for change by essentially saying, 'is is where it will be held.' We need legislation now in order for the government to enact regulations and establish new processes later." Gluckstein also expects most changes will come through regulatory reform and practice rules. "ere's not a lot of detail in bill 171. Even so, given the de- bate we have seen in the house, it's going to be more controver- sial than they thought." LT 'If you look at what the Licence Appeal Tribunal does now, they are not equipped to deal with the caseload generated by the auto insurance system,' says Charles Gluckstein. Let us open the right door for you Kuretzky Vassos Henderson is a leading employment and labour law fi rm situated in the heart of Toronto. We are comprised of ten lawyers, all of whom specialize in the area of employment and labour law. We act for many prominent public and private sector employers as well as for individuals. 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