Barrie Lawyers Discuss Recent Developments in the LAT
The License Appeal Tribunal (“LAT”) is an independent administrative tribunal created under the Licence Appeal Tribunal Act, SO 1999, c. 12, Sched. G.
This body has the jurisdiction to adjudicate licensing claims and activities in Ontario. More authority was added in 2014, when the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, SO 2014, c. 9, transferred the dispute resolution system for Statutory Accident Benefit (“SAB”) disputes to the LAT.
The SABs are statutorily provided benefits available to anyone injured in a car accident, regardless of who is at fault. Possible benefits include Income Replacement Benefits, Medical or Rehabilitation Benefits, and Attendant Care Benefits. If you have been injured in a car accident, your entitlement is dependent on the severity of the injury, the type of benefit being claimed, and the cost of the treatment. As a result, your insurer may deny requested benefits based on their assessment of the situation. These denials may be challenged.
Originally, this dispute resolution mechanism was within the mandate of the Financial Services Commission of Ontario (“FSCO”). Although either FSCO or the civil court system could have been used for SAB claims, FSCO was viewed as a more efficient, cheaper, and quicker alternative to the court system. Despite this perception, issues with financial efficiency and timeliness led to sweeping changes from the Ontario legislature. Through the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, the LAT was made the sole arbiter of SAB claims and given its own rules and procedures in an attempt to remedy FSCO’s inefficiencies. According to Tribunals Ontario, the LAT’s mandate is to:
“… deliver administrative justice in a fair, independent and timely manner. We promote public confidence through integrity and excellence, and by being accessible, accountable and responsive.”
This change became effective on April 1, 2016, leading to subsequent developments at the LAT.
One of the LAT’s major goals was having the total process for an individual claim completed within six months. They also set a series of timelines through the LAT’s rules to push a claim forward. After an application is filed by the claimant or the insurance company, the Tribunal then contacts the respondent and requests a completed ‘Response’ within 10 days. A mandatory case conference with a LAT adjudicator is then scheduled approximately 45 days after the response is received. These guidelines have the dual goals of (A) ensuring that claims move at a steady pace and (B) ensuring greater opportunities for pre-hearing resolution (i.e. settlement).
The most recent data suggests some success. Of the 13,565 applications filed for SAB disputes in 2018, there were 9,991 early resolutions; which equates to approximately 74% of all cases. While the high-resolution rate is a sign of efficiency, the LAT is still stockpiling cases, leaving 7,340 files open at the end of 2018. Those numbers may prove detrimental to the LAT’s ‘six months per claim’ goal. It has been widely observed that, in practice, the LAT system is not meeting its original goals and timelines.
Ontario’s civil justice system follows a ‘loser-pays’ system, where the successful party is reimbursed for a portion of their legal costs and reasonable disbursements by the unsuccessful party. While FSCO followed this traditional principle, the LAT has departed from it. Section 17.1 of the Statutory Powers Procedure Act, RSO 1990, c. S.22 permits Tribunals to make cost awards if the Tribunal has a costs rule and where a party to a proceeding has acted unreasonably, frivolously, vexatiously, or their actions are an abuse of process. When the LAT was created, it was given its own set of rules and procedures. Among them is the power to award costs in certain situations. The LAT’s cost rule is produced in the Tribunal's Licence Appeal Tribunal Rules of Practice and Procedure (“Rules”):
s. 19.1 Where a party believes that another party in a proceeding has acted unreasonably, frivolously, vexatiously, or in bad faith, that party may make a request to the Tribunal for costs.
Tribunal's Licence Appeal Tribunal Rules of Practice and Procedure, v 1, April 1, 2016.
The Rules now explicitly limit these costs to $1,000 per “full day of attendance at a motion, case conference or hearing.” In 17-005302 v Aviva Insurance Company of Canada, 2018 CarswellOnt 15086 , the LAT further stated that these costs must be modest. In that case, and most others, it was limited to $1,000. While these powers are limited both in type and amounts, they clearly focus on eliminating improper behaviour from parties to a claim. Following this policy, the LAT has awarded section 19.1 costs to unsuccessful parties who while losing, have been treated unfairly (such as in 17-005302). Section 19.1 also aides in access to justice, by protecting vulnerable parties from unreasonable, frivolous, vexatious, and bad faith attacks.
Still, the lack of a ‘loser-pays’ system in the LAT, leaves much to be desired, as applicants have a very limited ability to recover legal costs or disbursements from an insurer, even if the applicant is successful. Instead, the system magnifies an already imbalanced system that favours the insurer.
3. Catastrophic Impairment
On August 27, 2015, Ontario’s legislature changed the definition of Catastrophic Impairment (CAT) for accidents occurring on or after June 1, 2016. Although unrelated to the procedural changes at the LAT, the evolving definition of catastrophic impairment has been influential to LAT litigation.
Entitlements through the SABs are dependent on the severity of injury and its corresponding designation. For example, if you accepted to be CAT, then you will gain access to a wider variety of benefits as well as enhanced benefits. While there are eight ways to be found CAT, the 2016 changes amended existing procedures for CAT designations which made the tests more difficult to satisfy. They did so by creating more specific definitions and raising the threshold for certain injuries. They also replaced the once standard and relatively simple ‘Glasgow Coma Scale’ with new criteria that emphasises extensive multi-disciplinary assessments.
In addition to changing the CAT definition, they also lowered the upper limits for a series of benefits. Before June 1, 2016, a person found CAT could receive up to $2 million for medical-rehabilitation benefits and attendant care benefits ($1 million each). In an effort to reduce automobile premiums, the Ontario government has reduced this cap to $1 million total. They also set the limit for those in found non-catastrophically impaired at $65,000 for medical-rehabilitation and attendant care benefits in combination. Prior to June 1, 2016, the limit was $50,000 for medical and rehabilitation benefits and $36,000 for attendant care.
Recent developments at the LAT have had varying effects on applicants. While the system is premised on speed, transparency, and efficiency, there appears to be evidence of an accumulating caseload, which generates concerns for applicants. The restriction on costs and reduced benefits is also concerning for all applicants. The combination of these developments has resulted in increased barriers for SAB applicants who are attempting to access their benefits.