Everyone will suffer from new auto insurance dispute system: Rashid

Sweeping changes to Ontario’s no fault insurance landscape will hurt access to justice for car accident victims, says Ottawa personal injury lawyer Najma Rashid.

“Individuals have lost the right to sue and they’re being restricted to a more narrow dispute resolution system that may not work to their benefit,” says Rashid, a partner with Howard Yegendorf & Associates.

Legal costs are also not covered under new rules, and Ontario’s health-care system is not sufficient for people who will receive significantly reduced funds under the Statutory Accident Benefits Schedule (SABS).

“OHIP doesn’t cover most types of rehabilitation or attendant care,” she says. “And now that funding limits are basically cut in half, the duration of the funding will go down as well.

“It’s insurance friendly — not victim friendly.”

The suite of changes began April 1, with all new disputes falling under the jurisdiction of the Licence Appeals Tribunal (LAT) instead of the Financial Services Commission of Ontario (FSCO).

One of the concerns expressed by those in the industry include the fact that the LAT — which has not previously handled insurance matters — will not be bound by the wealth of case law established by FSCO arbitrators, says Rashid, who has also blogged on the topic for the Ontario Trial Lawyers Association.

“Further, LAT adjudicators do not necessarily have a specialty in accident benefits legislation, and given the complexities and numerous historical reincarnations of the SABS, this can be problematic.”

Another byproduct of these new changes is that effective April 1, claimants can no longer pursue their accident benefits dispute by way of a court action.

“If there’s an accident benefits dispute, you are restricted to the LAT process whereas previously you would mediate with the FSCO and if you couldn’t come to resolution, then you could commence an action against the insurance company,” Rashid says.

“But we’ve now been legislated out of the right to sue, which is a fundamental right.”

The result will be reduced pressure on insurance companies, removing an incentive to come to a fair and just resolution, she says.

“Now there are some disputes that will go to an oral hearing with the LAT, but costs will not be awarded.”

The second sweep of changes come into effect on June 1, slashing the funding available to accident victims, Rashid says.

Non-catastrophic benefits will be reduced to $65,000 from $86,000 combined for medical, rehabilitation ($50,000) and attendant care ($36,000). Catastrophic limits have been reduced by half, from $2 million to $1 million for medical rehabilitation and attendant care.

Non-earner benefits, available to someone who wasn’t working at the time of the accident, is now payable for two years. It was previously available for life if certain tests were met, she says.

Another significant change is the definition of catastrophic impairment, which will apply to all accident victims after June 1. For example, the Glasgow Coma Scale test has been eliminated as a way to measure a brain injury.

A new measurement system, the Glasgow Outcome Scale, will be used along with brain imaging.

Rashid says these changes are significant and will make it more difficult for someone to be considered catastrophically injured.

“Even the criteria dealing with paraplegia, amputation, vision losses, they have slightly narrower definitions under the new scheme,” she says.

“Overall, these changes drastically reduce the amount of medical, rehabilitation and attendant care funding available to people who’ve been injured in accidents.

“Everyone will suffer. Anyone who is in an accident — and that could be any one of us — will be suffering.”