Law Times

Law Times • OcTOber 15, 2012 Lawyers perplexed at FSCO's stance on mediation FOCUS L BY JUDY VAN RHIJN For Law Times awyers are shaking their heads as the Financial Services Commission of Ontario refuses to implement its arbitrators' decisions. With the superintendent issuing public opinions that the decisions are wrong or that FSCO will ignore them pending court guidance, it appears the commission's administration is questioning its own lawmaking process. As a result, lawyers are asking whether FSCO' to the system. There have been two recent media releases from the commission s processes are more of a barrier than a benefit that have raised eyebrows across the province. The first referred to the decision of the director' held an arbitrator's finding that mediation was deemed to have failed s delegate released on July 31, 2012, that up- if it didn't take place within 60 days of an application being filed (see Leone v. State Farm Mutual Automobile Insurance Co.). It also referred to the appeal of several court decisions on the same issue considered by the Ontario Court of Appeal on July 19, 2012. Those decisions are currently on reserve. The media statement said: "Since the Court of Appeal is the high- est court in Ontario, it is FSCO's opinion that it would be premature to change the dispute resolution processes without the benefit of the Court of Appeal decision. In the interim, parties awaiting mediation will remain in the queue for assignment to a mediator. . . . Applications for arbitration where no report of mediator was issued will continue to be held in abey- ance pending the Court of Appeal decision on this issue. 30, 2012, in Parveen v. Aviva Canada Inc. and Fredric v. Aviva Canada Inc. The matters involved a motor vehicle accident in which four fam- ily members were injured. They all signed settlement disclosure no- tices at a pretrial hearing but didn't sign releases until almost a month later. Parveen and Fredric then rescinded their settlements the fol- lowing day. This scenario brought to the fore the settlement regulations that hearing is six to eight months. The second release referred to the arbitration decisions on March provide for rescission "within two business days aſter the later of the day the insured person signs the disclosure notice and the day the in- sured person signs the release" and the requirement that the settlement disclosure notice clearly set this out. Arbitrator Suesan Alves found that the text of the prescribed settlement disclosure notice didn't convey im- portant information in the settlement regulation as required. Accord- ingly, she held that the Parveen and Fredric had the right to rescind the settlement even aſter the two-day cooling off period had passed. The official response from FSCO was as follows: "In the context of these de- cisions, it is the superintendent' in Leone and argued the appeal of Parveen and Fredric before direc- tor' s delegate Lawrence Blackman on Oct. 2. He believes it's a signifi- cant issue that FSCO isn't complying with its arbitrators' findings. "It's settlement disclosure notice (SDN) form complies with the regulation." Alexander Voudouris of Pace Law Firm represented the insured s position that the current version of the sad and shocking that an administrative tribunal is ignoring its own decisions. It will not issue failed mediation reports or accept an arbi- tration application. It will not amend its settlement disclosure notice. Law is a living entity. You act today on the law today, and today the only law is the arbitration decisions." FSCO' lawyers. With respect to mediation, it recommends that parties joint- ly extend the period for it or jointly agree to fail it. It appears to be placing its hope in the recent introduction of a private dispute resolu- tion service provider, ADR Chambers, that will provide capacity for an additional 2,000 mediations per month over and above the files that FSCO' s recommendations on how to proceed haven't appeased The release noted that the current wait time for an arbitration pre- " enhance the settlement process." In fact, Alves held that the onus was on the insurer to ensure that the form contains all of the neces- sary information and that there was nothing preventing it from amending the form and seeking the superintendent' Voudouris recalls that follow- ing the superintendent's refusal s approval. to approve a new form, the entire accident benefits industry shut down. "There were no settle- ments for two or three weeks," he says. Lawyers for insurers are now advising their clients to ex- ecute releases first or at the same time as the settlement disclosure notice. Voudouris is of the opinion jury is very much out on whether they make a difference at all. plaintiff insurers abandoned the arbitration system long ago in favour of the courts. "The me- diation acts as a barrier to forc- ing the resolution of claims. This is an institutional delay. FSCO' In fact, Legate and many other " failure to abide by their own timelines and then ignoring not only the court but their own ar- bitration wing shows they are sticking their heads in the sand. We are in turn ignoring the me- diators. If we want to issue the claim, we do. s that the settlement disclosure notice is defective and always has been. "I'm of the view that all [notices] since February 2002 are invalid. Every settlement since then is open to be rescinded. This gives plaintiff lawyers and accident victims a choice if their condition has worsened or if their settlement was carried out by someone who settled for too little. Legate of Legate & Associates LLP in London, Ont., is of the opinion that this "unwieldy system" hasn't proven to be effective. "They'll quote statistics of settlement rates of 97 per cent, but that is the same rate as settlements through the court system. The When it comes to the bigger picture, Barbara " 'It's sad and shocking that an administrative tribunal is ignoring its own decisions,' says Alexander Voudouris. tem is actually necessary. Has it improved the num- ber of settlements? Has it benefited the consumer? Is the cost of the agency viable if it is not proving its worth?" While Legate welcomes the involvement of out- people need a government-fund- ed organization at all. "It may be time to evaluate whether the sys- side arbitrators once the parties have passed the mediation barrier, she believes the court system cur- rently has more to offer. "Lawsuits are a way to make people sit back and make an appropriate evaluation. The procedures are better known, the judges are skilled, the rules of evidence apply, the costs orders are more significant from the client' and arbitration is certainly no faster." s point of view, LT Legate questions whether " PAGE 13 TRUST you're putting your reputation on the line. It's all about trust well placed. also began assigning up to 500 arbitration files to ADR Chambers per month. FSCO advises that the use of external services for dispute resolution is a two-year pilot project and warns that the co-operation and availability of insurers' and claimants' representatives will be im- portant to its success. With respect to the settlement disclosure notices, FSCO advised that there's nothing preventing insurers from providing additional information in order "to improve claimant communication and s mediators will continue to handle. In October, FSCO E.V. Litigation & Financial Services Inc. Elaine G.Vegotsky, CMA, CFE, CFI Litigation & Forensic Accounting, Financial Investigations Assisting you in 4 5 Sheppar d Avenu e East, Toronto, Ontario M2N 5W9Willowdale, Ontario M2N 5W9 Suit e 900 evlitigation@rogers.com Telephon e o r Fax (416 ) 930-1370 (905) 731-5812 ThomsonRogers_LT_Feb13_12.indd 1 www.lawtimesnews.com Vlit_LT_Jan9_12.indd 1 12-01-03 11:38 PM 12-02-07 2:07 PM LEONARD KUNKA | CRAIG BROWN | DARCY MERKUR 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. 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