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On November 29, 2012, the Ontario Court of Appeal took a welcomed position by the personal injury bar concerning the statutory scheme for mandatory mediation under the Statutory Accident Benefits Schedule, O. Reg. 34/10 (“SABS”).

In Hurst v. Aviva Insurance Company, 2012 ONCA 837, the question that was resolved was a question of law regarding the interpretation of the Insurance Act, R.S.O. 1990, c. I.8.  The Court of Appeal found that once an applicant has submitted an application for accident benefits, a mediator is required to attempt to effect a settlement of a dispute within 60 days from the date on which the application for the appointment of a mediator is filed.

When someone is injured in a motor vehicle accident, in most cases that person is entitled to accident benefits through their own auto insurer, or if the person is a pedestrian with no coverage, access to benefits is usually through the other driver’s auto insurer.  If a dispute arises between the insurance carrier and the accident victim, there is legislative scheme for resolving these disputes requiring insured persons to resort to a mandatory mediation process before commencing a court proceeding or submitting their disputes to arbitration.  However, this scheme postpones the rights of accident victims to commence court actions against their insurer until the mediation process has been completed.

As many of our clients may know, there has been a huge backlog for mediations at the Financial Services Commission of Ontario (“FSCO”). Essentially, months and months go by without a mediator being appointed and without the mandatory mediation taking place within the 60 day period.  This process has substantially delayed the rights of accident victims and interfered with the necessary funding for physical rehabilitation, income replacement benefits and access to necessary medical treatment, to name a few.

With this decision, the Court has confirmed that if FSCO fails to appoint a mediator and have a mediation conference within 60 days after the filing of the application for mediation, the accident victim no longer has to wait – he or she may commence a court proceeding or submit their dispute to arbitration.

This is great news for our clients, some of whom have been waiting for almost a year for the mediation to take place!  This should expedite the process in order to resolve disputed issues and provide for quicker access to the benefits to which accident victims are entitled.  We suspect we will soon see many actions that have been delayed by FSCO being filed in court or sent to arbitration.

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