Companies Forum Minutes of Meeting - March 6, 2008

Review and Approval of Minutes from December 6, 2007 Meeting

No changes noted for prior meeting minutes, clarification provided that special awards and awards against representatives are noted on the FSCO website under Dispute Resolution.

FSCO Matters – David Draper

A recent decision was noted, Maria Augello v. Economical. The issue dealt with Section 285(1) of the Insurance Act which allows the Director of Arbitrations to state a case in writing to the Divisional Court on a question of law. The question:

When determining whether a person has sustained a catastrophic impairment pursuant to section 2(1.1)(f) or (g) of the Statutory Accident Benefits Schedule – Accidents on or after November 1, 1996, is it correct to assign a percentage value to psychological impairments under clause (g) and to combine that percentage value with the physical impairment ratings under clause (f)?

Two further cases were noted on the question of production of reserve information:

Rama v. Allstate
Qazi v. Security National

It has been noted that MVAC is not responding to AB claims if there is no police report filed. There was a case discussed which involved a pedestrian knockdown in which no police report was filed. The insurer was resisting priority in this case.

Judicial review:

FSCO is planning to display an update memo on the website where decisions are password protected and hope to be available before our next meeting.

Two appeal decisions were noted:

The first decision, Ms. G. relates to nanny expenses. The application was allowed. The decision of the Director’s Delegate was set aside and the decision of the arbitrator was restored. The insurer has filed an application to the Court of Appeal for leave to appeal.

The second decision, Kanareitsev relates to adequacy of reasons. The application was allowed. The decision of the Director’s Delegate was set aside and the decision of the arbitrator was restored. The insurer has filed an application to the Court of Appeal for leave to appeal.

The third decision, Cullingham relates to jurisdiction/insurer priority and the application has been withdrawn. On consent.

There was a discussion with respect to Michalski vs. Wawanesa – There was a reduction in a special award from $150,000 to $50, 000 and insured has appealed for Judicial Review. There has been no date set.

It was discussed that it is possible to set up this type of search through reported Arbitrations rather than by date order. It was also suggested that it be indexed by leading cases or subject matter.

Statistics – John Lobo

In reviewing the period March 07 to February 08, 14, 775 mediation applications were received, an increase as compared to previous years. Applications completed when filed are going up as is representation by Law Firms (including supervised paralegals).

Average processing time was impacted in 07/08 due to the increase of applications, no longer screening for issues related to DAC/IE, staffing issues including turnover, vacations etc.

Face to Face mediations remain at 4%.

Mediation results indicate that full settlements up to 45% from 32% with partials at 15%.

Staffing

Proceeding to competition to fill 2 permanent and 2 contract (backfill) mediator positions. There was a discussion of the requirements that Mediation Services looks for when recruiting mediators. Also proceeding to competition for 2 contract (backfill) Team Leaders.

There was a discussion on the applicability of the Mediation Fee Assessment and when the $500.00 mediation fee is charged. There was a suggestion made that the current backlog provides for an opportunity to settle files before the assignment to a mediator and so long as DRS and the parties have advised of the settlement prior to assignment, the file will be closed with a letter and no fee charged.

Arbitration Statistics – Janine Macey

There are consistent Arbitration applications being received, including seasonal fluctuations. There has been an increase in applicants represented by legal firm from 79% to 85%. The clearance rate of applications has increased.
92% of arbitrations are settled and this rate is consistent with results over the last four years. Decisions are generally issued within 85 days with fewer decisions released in Q1 and Q3 . FSCO has reached their target of 70% of decisions issued within 85 days.

There is currently a temporary vacancy but it will not be filled within the near future. There are currently 20 Arbitrators.

Appeals – David Draper

There are more old decisions than is the norm. This pattern reflects the difficulty of completion and delay in publication of decisions

Staffing – Nancy Makepeace at OSC currently.
Lawrence Blackman – is backfilling for Nancy until May 2008.
Penny Dutton – retiring at end of March 2008.
Executive Director – competition is closed and the successful candidate will be advised once completed.

Law reforms / Policy Initiatives

FSCO oversight of SABS representatives ends May 1, 2008. Paralegals in Ontario will be regulated by the Law Society. References made to FSCO Bulletin (A-0408).

On or after May 1, 2008 only individuals who are licensed to provide legal services, or who are exempt from licensing requirements under the Law Society By-Laws, can represent
claimants in the dispute resolution process at FSCO.

FSCO’s dispute resolution forms will be amended to require paralegals to provide their Law Society licence number, as is currently required for lawyers. These forms will be available on FSCO’s website.

FSCO will continue complaint and enforcement proceedings against SABS representatives for compliance issues that arose prior to May 1, 2008. All other complaints regarding the conduct or actions of licensed paralegals or unlicensed persons providing legal services should be directed to the Law Society.

There was a discussion on exemptions. Staff adjusters with the exception of CAT claims are exempt but insurers may have trouble sending non-licensed insurance company staff.

Information regarding paralegals regulation and who is licensed is available in the Law Society Website.

The Five Year Review, including recommendations in the Osborne Report, is still scheduled to begin in October 2008 – nothing new to report.

Outreach Committee – David Draper

There are a number of areas that are being worked on. Firstly there are paralegal meetings and determining with the law society who is responsible to certify the community college students. FSCO is encouraging the teaching of auto insurance courses. Secondly, in London, Ontario, FSCO is making Mediators/Arbitrators available to Insurers through the Bar Association.

Other business

Insurers are requesting that while claim numbers are prominent on arbitration documents, they should also show on appeal forms.

An insurer has forwarded a complaint against a paralegal in relation to the practice of
faxing 40 – 80 pages of material for OCF-18’s – insurer cannot fax back, as fax machine appears to be turned off. The insurer is seeing multiple copies and alterations of the forms. There was a previous cease and desist order related to this paralegal which expired in late fall 2007 and was reinstated.

Some insurers are considering payment of OCF 18’s costs directly to the insured and having only OCF 21”s processed through HCAI.

An insurer discussed a case of a claimant being injured while on duty driving a military vehicle. One would expect that claimant should go to the Military, the claim has come in from insured’s representative, who is looking for other benefits, such as housekeeping. Is the Department of National Defense noted as an insurer under the Insurance Act? If the DND is not going to pay, insurer may have to pay as there is no WSIB coverage. Is the Department of National Defence possibly self insured ?
A law firm is claiming costs at mediation anywhere from $ 500 - $ 2000. Insurers are resisting the payment of these items. It was suggested that this could show as a last offer and let the Mediation fail

Next meeting – June 5, 2008 at 10 am at FSCO

Minutes by Maria Joshua – Unifund Assurance