Simon's Megalomaniacal Legal Resources

Insurance - Auto - Licence Appeal Tribunal (LAT) Appeals

. Grewal v. Peel Mutual Insurance Company

In Grewal v. Peel Mutual Insurance Company (Div Court, 2024) the Divisional Court, in a case following immediately from Keulen, also holds that the LAT has no SABS punitive damages jurisdiction:

[2] Precisely the same legal issue was raised in a prior appeal from the LAT (Keulen v. Allstate Insurance Company) and this court’s decision in Keulen was under reserve at the time that this appeal was argued. This court’s decision in Keulen was released on April 8, 2024: 2024 ONSC 2033.

[3] I would note that the primary argument advanced by the Appellant in this case focuses on a transfer of “jurisdiction” from the Superior Court to the LAT. As explained in Keulen, exclusive jurisdiction over SABS claims has been removed from the Superior Court of Justice and the Financial Services Commission of Ontario and has been placed in the LAT. This is the effect of the language in s. 280 of the Insurance Act. The authority granted to the LAT is circumscribed by the Insurance Act, the SABS and the applicable regulations. The LAT has no inherent jurisdiction.

[4] The LAT has not been granted authority to award punitive damages; it has been granted authority to deem benefits incurred, to make a “special award”, and to award interest and/or costs, all remedies that may be used to respond to insurer misconduct. There is nothing unclear or ambiguous about these provisions.

[5] The parties to this appeal had a full opportunity to address the issues raised by this appeal, and no purpose would be served seeking further submissions in light of this court’s decision in Keulen.

[6] For the reasons expressed in Keulen and in this endorsement, this appeal is dismissed, with costs payable by the Appellant to the Respondent Peel Mutual in the agreed amount of $10,000, inclusive, payable within thirty days. There shall be no costs for or against the LAT.

. Keulen v. Allstate Insurance Co. [punitive damages]

In Keulen v. Allstate Insurance Co. (Div Court, 2024) the Divisional Court dismisses an appeal that argued the LAT had punitive damages jurisdiction:

[11] The LAT found that its jurisdiction arises from s. 280 of the Insurance Act, and that it is evident that the Legislature clearly intended that the LAT “does not have the authority to award punitive damages for accident benefit disputes” (Decision, para. 14). The LAT followed prior LAT decisions in A.J. v. Security National, 2021 CanLII 35586 (ON LAT), reconsideration denied 2021 CanLII 104418 (ON LAT) and Jarrett v. Aviva Insurance Co. of Canada, 2022 CanLII 2762 (ON LAT), which both “found that the legislature did not include punitive damages as a remedial tool available to the Tribunal” (Decision, para. 16).

[12] The LAT held that the Court of Appeal decision in Stegenga v. Economical Mutual Insurance Company, 2019 ONCA 615, “confirms the types of remedies the Tribunal has jurisdiction to award” and noted that the decision “is binding as far as what the Tribunal can and cannot do” (Decision, para. 17). The LAT further noted that the Court of Appeal held that where “an insurer has unreasonably withheld or delayed payment of a benefit, the Tribunal may deem the benefit incurred pursuant to s.3(8) of the Schedule. Furthermore, Regulation 664 provides the Tribunal with the power to grant an award of up to 50% of the benefits as well as interest on all amounts owing” (Decision, para. 17). The LAT then went on to quote from para. 6 of Stegenga as follows:

Interpreted in light of the principles of statutory interpretation, s.280 grants the LAT jurisdiction over Ms. Stegenga’s claim and prohibits the claim from proceeding as an action in court, notwithstanding that the action alleges bad faith and the remedies the LAT can grant are different from those a court could. This result is a consequence of a policy choice the legislature made in enacting s. 280.

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Issue #1 – LAT Has No Jurisdiction to Award Punitive Damages Related to SABS Claims

[14] The Appellants essentially repeats the arguments made to the LAT on this issue. I would reject those arguments, substantially for the reasons given by the LAT, with the following additional observations.

[15] First, the language of the Court of Appeal in Stegenga is clear. The LAT’s jurisdiction is circumscribed by statute. The statute provides that the LAT will decide claims in accordance with the SABS Schedule and applicable regulations. None of those instruments authorize an award of punitive damages. They do, however, authorize the Tribunal to deem benefits incurred, to make a special award of 50% of benefits, and to award interest and costs, all as potential responses to unreasonable conduct by an insurer. These are “different remedies” than an award of punitive damages, a “policy choice” made the Legislature. I conclude that the LAT was correct in finding that Stegenga is binding authority establishing that the LAT has no jurisdiction to award punitive damages in SABS cases. Stegenga is likewise binding on this court.

. Keulen v. Allstate Insurance Co.

In Keulen v. Allstate Insurance Co. (Div Court, 2024) the Divisional Court dismissed a SABS appeal from the LAT, here arguing that the LAT had punitive damages jurisdiction against an insurer. Here the court canvasses the essential jurisdiction of the LAT regarding SABS auto insurance matters:

The Statutory Scheme

[7] The LAT is an administrative tribunal. It has the jurisdiction conferred upon it by statute. It does not have inherent jurisdiction: Dunsmuir v. New Brunswick, 2008 SCC 9, paras. 27 – 29.

[8] Section 3(1) of the LAT Act states:

The Tribunal shall hold the hearings and perform the other duties that are assigned to it by or under any Act or regulation.

[9] Section 280 of the Insurance Act states:

(1) This section applies with respect to the resolution of disputes in respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled.

(2) The insured person or the insurer may apply to the Licence Appeal Tribunal to resolve a dispute described in subsection (1).

(3) No person may bring a proceeding in any court with respect to a dispute described in subsection (1), other than an appeal from a decision of the Licence Appeal Tribunal or an application for judicial review.

(4) The dispute shall be resolved in accordance with the Statutory Accident Benefits Schedule.

(5) The regulations may provide for and govern the orders and interim orders that the Licence Appeal Tribunal may make and may provide for and govern the powers and duties that the Licence Appeal Tribunal shall have for the purposes of conducting the proceeding.

(6) Without limiting what else the regulations may provide for and govern, the regulations may provide for and govern the following:

1. Orders, including interim orders, to pay costs, including orders requiring a person representing a party to pay costs personally.

2. Orders, including interim orders, to pay amounts even if those amounts are not costs or amounts to which a party is entitled under the Statutory Accident Benefits Schedule.

Thus, resolution of disputes under the SABS Schedule has been assigned to the LAT. The courts have no jurisdiction over these disputes, other than by way of appeal or judicial review of decisions of the LAT. LAT is to resolve disputes in accordance with the SABS Schedule and regulations made pursuant to subsections (5) and (6). Orders to pay money must be authorized under the SABS Schedule or the regulations.

. Aviva Insurance Company of Canada v. Danay Suarez

In Aviva Insurance Company of Canada v. Danay Suarez (Div Ct, 2021) the Divisional Court set out some basics of the MVA SABS insurance system:

Purpose, Intent, and Function of Accident Benefits Legislation

[25] As noted by MacKinnon, J. in Arts v. State Farm Insurance Company, 2008 CanLII 25055 (ON SC):

The SABS is remedial and constitutes consumer protection legislation. As such, it is to be read in its entire context and in their ordinary sense harmoniously with the scheme of the Act, the object of the Act and the intention of the legislature. The goal of the legislation is to reduce the economic dislocation and hardship of motor vehicle accident victims and, as such, assumes an importance which is both pressing and substantial. (para. 16)

[26] In 2016, the LAT was delegated the exclusive jurisdiction to resolve Accident Benefits disputes between insurers and claimants. The Court of Appeal in Stegenga v. Economical Mutual Insurance Company 2019 ONCA 615 (CanLII) noted that the purpose of assigning Accident Benefits disputes to the LAT was to, “[speed] up dispute resolution, in large part by providing an efficient, fair and accessible mechanism for resolving disputes” (para. 38).

[27] The LAT has broad remedial powers to address Accident Benefit disputes. As the court in Stegenga noted:

Taken together, the words of s. 280(1) cover a wide array of disagreements connected in some way to the SABs to which an insured person was or is entitled. Viewed in the context of the purpose and history of the dispute resolution provisions, those words include disagreements about when the insurer’s obligation to provide SABs should be or should have been performed, and how the obligation to provide them should be or should have been performed. (para. 45)

[28] In executing its dispute resolution functions, the LAT, “has all the powers that are necessary or expedient for carrying out its duties” (Licence Appeal Tribunal Act, 1999, s. 3(2)).

[29] In interpreting and applying legislation, the court must also be mindful of the remedial purpose of legislation. Pursuant to s. 10 of the Interpretation Act, R.S.O. 1990, c.I.11:

Every Act shall be deemed to be remedial, whether its immediate purport is to direct the doing of any thing that the Legislature deems to be for the public good or to prevent or punish the doing of any thing that it deems to be contrary to the public good, and shall accordingly receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Act according to its true intent, meaning and spirit.

. Dorman v. Economical Mutual Insurance Company [exclusivity]

In Dorman v. Economical Mutual Insurance Company (Ont CA, 2021) the Court of Appeal considered in a class action the exclusivity of the administrative procedures arounds SABS MVA insurance benefits:

[7] We see no error in the motion judge’s analysis. Section 280 of the Insurance Act provides a clear answer to the plaintiff appellants’ claim. That section provides as follows:

280 (1) This section applies with respect to the resolution of disputes in respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled.

(2) The insured person or the insurer may apply to the Licence Appeal Tribunal to resolve a dispute described in subsection (1).

(3) No person may bring a proceeding in any court with respect to a dispute described in subsection (1), other than an appeal from a decision of the Licence Appeal Tribunal or an application for judicial review.

[8] As the motion judge noted, no court actions are permitted with respect to either disputes about entitlement to SABs or the amount of the SAB. The LAT has exclusive jurisdiction over such disputes. This was confirmed by this court’s decision in Stegenga v. Economical Mutual Insurance Company, 2019 ONCA 615, 147 O.R. (3d) 65, at paras. 21-22 and 53. The plaintiff appellants cannot avoid this result with policy arguments that the exclusive jurisdiction of the LAT undermines the purpose of the Act or hinders access to justice. The Act is clear and must be given effect.

[9] Nor does it avail the appellants that s. 280 does not specifically prohibit representative actions. The Act cannot be read as prohibiting only individual actions. Moreover, the Class Proceedings Act, 1992, S.O. 1992, c. 6 is procedural in nature and does not confer jurisdiction on the court that does not otherwise exist. Nor can it be said that a dispute about HST is not a dispute about the amount of the benefits to which a person is entitled. Finally, there is no scope for a judicial settlement approval jurisdiction. As the motion judge explained, settlements cannot be approved unless a proposed class action is certified, and certification is impossible because the action is barred by s. 280(3).

. Yatar v. TD Insurance Meloche Monnex

In Yatar v. TD Insurance Meloche Monnex (Div Ct, 2021) the Divisional Court reviews recent Insurance Act amendments (effective 01 April 2016) which take appeal authority away from the Financial Services Commission of Ontario (FSCO) (mediation and arbitration) and court, and shift it to the Licence Appeal Tribunal (LAT):

Statutory Scheme

[9] Both the SABS and the Insurance Act, R.S.O. 1990, c. I.8, have been extensively amended since Ms. Yatar’s 2010 accident. Before April 2016, disputes about an insured person’s entitlement to or amount of accident benefits were resolved in accordance with sections 280 to 283 of the Insurance Act and the SABS, which provided that SABS disputes could be resolved by arbitration or court proceedings. At the time, the Financial Services Commission of Ontario (“FSCO”) was the administrative body involved in SABS dispute resolution. Mediation of SABS claims through FSCO was the mandatory first step in dispute resolution. Following a mediation, the mediator was required to report to the parties: Insurance Act, section 280(8), as it read on March 31, 2016 (the “former Insurance Act”). After a failed mediation, parties could begin an action in the courts to determine SABS claims, or could proceed to arbitration, either through FSCO or in a private arbitration.

[10] The limitation period for beginning a proceeding was two years from the date of the insurer’s refusal to pay the benefit claimed: section 281.1(1) of the former Insurance Act and SABS, section 51(1), as it appeared on March 31, 2016 (the “former SABS”). But if the parties pursued mediation, both the Insurance Act and the SABS extended the limitation period to ninety days after the mediator’s report to the parties: section 280(8) of the former Insurance Act and section 51(2) of the former SABS.

[11] Section 49 of the former SABS provided a “right to dispute” as follows:

If an insurer refuses to pay a benefit under this Regulation or reduces the amount of a benefit that a person is receiving under this Regulation, the insurer shall provide the person with a written notice concerning the person’s right to dispute.

[12] The SABS dispute resolution system was significantly redesigned effective April 1, 2016. This included the elimination of FSCO mandatory mediations, the elimination of court actions, and the elimination of FSCO’s role in arbitrations. The Insurance Act was amended, effective April 1, 2016, to provide the LAT with exclusive jurisdiction at first instance over the resolution of disputes in respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled: Insurance Act, section 280.

[13] The Legislature also amended the LAT Act, effective April 1, 2016, by adding section 11(6) which provides that an appeal from a decision of the LAT “relating to a matter under the Insurance Act may be made on a question of law only.”

[14] The LAT’s Rules of Practice and Procedure providing for limited internal reconsideration of LAT decisions were adopted on April 1, 2016. The LAT rules have since been consolidated and replaced by the Common Rules of the License Appeal Tribunal, Animal Care Review Board, and Fire Safety Commission, effective October 2, 2017. The Common Rules were amended effective February 7, 2019, to provide for a more flexible reconsideration process (including the power for adjudicators to hear reconsiderations from their own decisions, as happened in this case).

. Yang v. Co-operators General Insurance Company [exclusivity]

In Yang v. Co-operators General Insurance Company (Ont CA, 2022) the Court of Appeal considered the exclusive LAT jurisdiction over SABS MVA issues:

[4] The motion judge made no error in interpreting and applying s. 280 of the Insurance Act, R.S.O. 1990, c. I.8, which grants the Licence Appeal Tribunal exclusive jurisdiction over disputes in respect of statutory accident benefits. To that extent, s. 280(3) also deprives the Superior Court of jurisdiction.

[5] Although the statement of claim alleges many causes of action, as the motion judge noted the crux of the appellant’s complaints is a dispute about how her insurer (Co-operators) handled her claims under the Statutory Accident Benefits Schedule, being O. Reg. 34/10 under the Insurance Act. She alleges that her insurer coerced the respondent health care practitioners into “staging” multiple examinations under s. 44 of the Schedule and preparing false reports and that the other respondents were complicit in that conspiracy. As part of this conspiracy, she alleges that her insurer, the assessors, and SmartSimple Software Inc. breached her privacy and withheld or destroyed relevant documents.

[6] The motion judge relied on this court’s decision in Stegenga v. Economical Mutual Insurance Co., 2019 ONCA 615, 147 O.R. (3d) 65, in which Zarnett J.A. held that s. 280 covers a wide array of disagreements connected in some way to statutory accident benefits, including disagreements about how the insurer’s obligations were or should have been performed.

[7] At its core, the appellant’s statement of claim concerns the respondents’ alleged efforts to circumvent the Schedule. Framing the action as one in bribery, conspiracy, breach of privacy, breach of contract, or breach of fiduciary duty does not alter the substance of her claim: Stegenga, at paras. 54-61; Mader v. South Easthope Mutual Insurance Company, 2014 ONCA 714, 123 O.R. (3d) 120.

[8] Now that the appellant has settled with her insurer and its employees, she submits that s. 280 is not a bar to her claim because the Licence Appeal Tribunal is empowered only to adjudicate disputes between an insured and an insurer. The appellant relies on the language of s. 280, as well as Dorman v. Economical Mutual Insurance Company, 2021 ONCA 314, 155 O.R. (3d) 338, and Lowe v. Guarantee Co. of North America (2005), 2005 CanLII 80693 (ON CA), 80 O.R. (3d) 222 (C.A.).

[9] We disagree. The claim in Dorman that this court held was not statute-barred by s. 280 was a class action for systemic negligence against the Financial Services Commission of Ontario (“FSCO”). The allegations against FSCO were that it had failed to investigate complaints against insurers and failed to enforce its own guidelines. In constrast, the appellant’s claims concern the way in which she was assessed for statutory accident benefits under s. 44 of the Schedule. That is squarely within the Licence Appeal Tribunal’s mandate. The only damage pleaded attributable to the remaining defendants is that the appellant may have received fewer benefits than she was owed. As the motion judge noted, her physical injuries arise from the car accident, not the actions of the respondents. In the words of Dorman, this remains a case “concerned with [Schedule] benefits and amounts”: at para. 4. On the pleadings in this case, there is no need to revisit the interpretation of s. 280 thoroughly cavassed in Stegenga.

. Patchett v. Optimum et al

In Patchett v. Optimum et al (Div Ct, 2021) the Divisional Court set out briefly the LATS appeal system for SABS MVA insurance benefits:

[7] The Insurance Act, R.S.O. 1990, c. I.8 and the SABS codify Ontario’s no-fault accident benefits regime. Pursuant to s. 268(1) of the Insurance Act, every automobile insurance policy in Ontario is deemed to include the benefits provided in the SABS. The LAT has exclusive jurisdiction under s. 280 of the Insurance Act to resolve any disputes “in respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled.”

[8] The LAT is an administrative tribunal created pursuant to the LAT Act. The appeal before this court is governed by ss. 11(1) and (6) of the LAT Act, which state as follows:

(1) Subject to subsections (2) to (6), a party to a proceeding before the Tribunal relating to a matter under any of the following Acts may appeal from its decision or order to the Divisional Court in accordance with the rules of court:

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Insurance Act

(6) An appeal from a decision of the Tribunal relating to a matter under the Insurance Act may be made on a question of law only.