Law Times

Law Times • December 10, 2012 Page 5 NEWS Thousands of cases heading to court, arbitration Continued from page 1 "The purpose of the legislative scheme of dispute resolution is to mandate a speedy mediation process, conducted and completed on a strict timetable, in order to settle disputes quickly and economically." Speedy mediation, Juriansz wrote, allows claimants the benefits they have a right to without delay. At the same time, the appeal court dismissed "the premise on which the appellants' entire argument is based." The appeal panel concurred with the motions judge that the only prescribed time for mediation that applies is 60 days. It didn't accept the argument that the clock starts running after FSCO has assessed an application as complete. "Such an interpretation, which would allow FSCO to accumulate a backlog of any length, would ignore the legislative purpose of providing a speedy mediation process," the court stated. The appeal court also disagreed with the suggestion that the 60-day time limit isn't mandatory. It found that not keeping to the time limit amounts to a technical or procedural breach. Lawyer Bruce Kelly of personal injury law firm Morell Kelly in Kitchener, Ont., who launched the lawsuit on behalf of the four claimaints, says the issue comes down to consumer protection. In his view, his clients didn't receive the attention they deserved in a timely manner. Although FSCO had yet to refer more than 21,000 cases to mediation earlier this year, Kelly expects many will reach a resolution. Other cases, however, may still end up in court. "Now we've already started setting them up for trial," says Kelly. "The insurance industry is going to take a bit of a whack clearing up the backlog." In response, FSCO stated that it would follow the court order but is encouraging claimants to stay in mediation. In a statement, Few complainants represented Continued from page 1 under the revised code appears to be more efficient than the previous system," Pinto noted. Perhaps the starkest upgrade between 2008 and 2012 related to the number of applications the tribunal received versus the cases it closed over a year. In 2008-09, the tribunal received 1,738 new applications and closed 19 files. In the last year, it received 2,740 new applications and closed 3,364 cases. While these are sure signs of progress, they're positive "only in relation to the low benchmark of the previous system," said Ceddia. "The human rights system in Ontario needs to be measured against an ideal system. The pursuit is excellence, not simply better than before." The Pinto report also found that the Human Rights Legal Support Centre is struggling to meet its demands. The centre is able to represent only 12 per cent of applicants before the tribunal. And while there are approximately 26,000 to 36,000 calls to the centre each year, it answers just over half of them. In addition, the report revealed that 65 per cent of complainants represent themselves whereas 85 per cent of respondents have legal counsel. Pinto suggested self-representation could decrease if the Ontario Human Rights Commission strives to represent applicants who can't otherwise prove their claims and those involved in public interest and systemic cases. "I anticipate this would make a small but strategically important contribution towards reducing the high number of selfrepresented applicants in the system," he wrote. He also suggested the Human Rights Legal Support Centre should reduce telephone wait times "to levels that are consistent with comparable public service organizations." Pinto, who described his own recommendations as "modest," noted he "didn't find a system in dysfunction, so no radical new approach is proposed." But he warned his report doesn't grant the government a certificate of excellence on the human rights front. "That I have not declared the system in crisis should not be an excuse for complacency," he wrote in his report. "I found a human rights system that is working better but faces some important and urgent challenges." For her part, Ceddia argued there's no need to delay an ambitious new standard until there's a crisis. "The government shouldn't wait for things to go wrong in the system," Ceddia told the audience at the summit. "If we're looking at [the human rights system] as an institution, what's in this report should be unacceptable." In cases where the solution is a number of fixes instead of an ambitious revamp of the system, "the government will accept a few of the recommendations, the easy ones, and a few more high-ticket items and off we go," she said. Among Pinto's recommendations was a tougher stance on respondents found guilty of human rights breaches. "The tribunal should reconsider its current approach to general damages awards in cases where discrimination is proven," he wrote. "The monetary range of these awards should be significantly increased." He also said the government should look at whether the tribunal should have a right to charge applicants the cost of their failed claims. Lawyer Mary Cornish, who authored a 1992 Ontario human rights review, urged the government not to dismiss Pinto's suggestions on the basis of a weak economy. "When we have a discussion about . . . what to do with Andrew's recommendations, it can't just be a matter of only about, 'OK, we're all having a freeze so the human rights system has a freeze, too,'" she said. "It desperately needs money into the system. We know that we have a system in which we still have systemic discrimination against major protected groups under the code. The groups protected by the code have not realized their rights." Pinto echoed similar concerns in his report. "My recommendations have already been mindful of [the economic] constraint," he wrote. "Many individuals and groups who are likely to face discrimination are the very ones who are most likely to be negatively affected by the poor economy. It would be a cruel irony if the very complaint mechanisms that they rely upon for fair employment, housing, and services are not functioning as well as they can." LT Tom Golfetto, director of arbitrations at FSCO, said the backlog should "quickly decrease" with the help of an external dispute resolution service provider assisting with the caseload by taking on an additional 2,000 mediations monthly. That's in addition to the files handled by FSCO's own mediators. "The Financial Services Commission of Ontario will apply the court ruling immediately by allowing parties to either agree to extend the time for mediation or receive a failed report of mediator," says FSCO spokeswoman Kristen Rose. Talaal Bond, a partner at Miller Thomson LLP who works in insurance defence, says the decision is far-reaching because a finding that mediation has failed doesn't require a positive act by FSCO. "I would expect lawyers who practise in this area to have some, at least one case," he says. The same day the Court of Appeal released its decision in Hurst, the same panel made a different finding on a related case. In Younis  v.  State Farm Mutual Automobile Insurance Co., the panel found Nebal Younis jumped the gun in going to court and didn't wait out the 60 days for mediation to occur. "Insured persons cannot commence civil actions until mediation has failed. To conclude otherwise would allow all insured persons to immediately commence civil actions knowing that the insurers' motions to stay are not likely to be heard until after the expiration of the 60-day time period," wrote Juriansz. But the appeal court's ruling in Hurst could have significant implications. In finding that mediation had failed in those matters, Juriansz cited some of the statistics presented to the Court of Appeal. Last year, FSCO received 36,492 applications for mediation. As of this past April, it had failed to refer 21,023 of 26,240 active applications to mediation within 60 days. "If it doesn't take action to resolve as many of these outstanding claims as possible, the number of cases proceeding to court or arbitration could be in the thousands," says Palumbo. "If they're not settled . . . think of the transaction costs. If claims costs increase, insurance premiums are going to go up." In the Court of Appeal ruling, Juriansz said that if all of the claims that would have otherwise gone to mediation end up in arbitration, the cost to the insurance industry from the additional filing fees alone could amount to $83 million. But Grossman suggests that's a vast underestimate. "Both sides of the case believe that there should be timely mediation as dictated to by the timelines in the Insurance Act," he says. "The biggest frustration stems from the fact that FSCO is a regulatory agency of the minister of finance which gets 100 per cent of the funding for the services it provides from the regulated sectors it administers." LT Added achievements. Andy Chan, Partner, Miller Thomson LLP Your friends and colleagues at Miller Thomson LLP wish to recognize your accomplishments in 2012: Selected as one of Lexpert's 2012 Rising Stars Leading Lawyers Under 40 Awarded The Queen Elizabeth II Diamond Jubilee Medal for your significant contributions and achievements Congratulations, Andy! Added experience. Added clarity. Added value. Miller Thomson LLP millerthomson.com VANCOUVER CALGARY EDMONTON SASKATOON TORONTO www.lawtimesnews.com Untitled-1 1 REGINA MARKHAM LONDON KITCHENER - WATERLOO GUELPH MONTRÉAL 12-12-04 10:58 AM

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