A weekly update of cases pertaining to the practice of insurance defence.
December 24, 2012
Happy Holidays
Happy holidays from the Ontario Insurance Law Blog. We'll be back in January with our weekly posts. We wish you all the best in 2013.
December 19, 2012
When Has FSCO Mediation Failed - Part 2
Last week, we blogged on the Court of Appeal`s decision in Hurst v. Aviva, which held that insureds may proceed to bring court actions or arbitration proceedings if 60 days have passed since an application for mediation at FSCO has been filed and no mediation has taken place.
The Court released its decision in Younis v. State Farm Insurance Company, 2012 ONCA 836 (C.A.) concurrently with Hurst. In the Hurst actions, the 60 day period had elapsed prior to the insured filing a court action. In Younis, however, the claimant applied for mediation on July 14, 2011 and filed a court action a few days later. State Farm`s motion to stay the action took place well after the 60 day period had elapsed. Justice Sloan refused to stay the action.
The Court of Appeal allowed the appeal. The Court held that the insured commenced his action in contravention of the statutory requirement by not waiting 60 days. Since Younis had not waited until mediation had failed, his action was barred. To allow otherwise would permit insured person to immediately commence civil actions and the statute did not permit this tactic.
The Court released its decision in Younis v. State Farm Insurance Company, 2012 ONCA 836 (C.A.) concurrently with Hurst. In the Hurst actions, the 60 day period had elapsed prior to the insured filing a court action. In Younis, however, the claimant applied for mediation on July 14, 2011 and filed a court action a few days later. State Farm`s motion to stay the action took place well after the 60 day period had elapsed. Justice Sloan refused to stay the action.
The Court of Appeal allowed the appeal. The Court held that the insured commenced his action in contravention of the statutory requirement by not waiting 60 days. Since Younis had not waited until mediation had failed, his action was barred. To allow otherwise would permit insured person to immediately commence civil actions and the statute did not permit this tactic.
December 12, 2012
When Has FSCO Mediation Failed - Part 1
We previously blogged on the decision in Cornie v. State Farm, in which Justice Sloan held that insureds may commence claims against their accident benefits carriers if 60 days have elapsed since an application for mediation has been filed, even if mediation itself has not occurred. The Court of Appeal has now released its appeal decision in Hurst v. Aviva, 2012 ONCA 837 (C.A.).
Section 281(2) of the Insurance Act prevents insured persons from commencing court actions or arbitrations against their insurers unless they first seek mediation and mediation has failed. The claimants waited 60 days after applying for mediation and when no mediation had taken place, they commenced actions. FSCO`s position was that the prescribed 60 day time limit for conducting mediation did not begin to run until an application for mediation had been assessed by FSCO and found to be complete. FSCO refused to issue a report declaring the mediations had failed. The insurers in four actions brought motions to have the actions stayed on the basis that they were barred by s. 281(2) as mediation had not taken place. Justice Sloan dismissed the motions and the insurers appealed.
The Court of Appeal dismissed the appeals. The Court concluded that the process is intended to be completed with 60 days after an application for mediation has been filed; however, if mediation has not taken place within 60 days, insured persons are free to pursue either court action or arbitration.
The Court rejected the insurers` arguments that the cost to the industry could be $83 million as a result of the interpretation of the Act that does not require mediation to actually take place. The insurers submitted statistics that 75% of claims are resolved by mediation at FSCO. One has to expect a flood of court proceedings as a result of this decision, along with significant costs to insurers.
Section 281(2) of the Insurance Act prevents insured persons from commencing court actions or arbitrations against their insurers unless they first seek mediation and mediation has failed. The claimants waited 60 days after applying for mediation and when no mediation had taken place, they commenced actions. FSCO`s position was that the prescribed 60 day time limit for conducting mediation did not begin to run until an application for mediation had been assessed by FSCO and found to be complete. FSCO refused to issue a report declaring the mediations had failed. The insurers in four actions brought motions to have the actions stayed on the basis that they were barred by s. 281(2) as mediation had not taken place. Justice Sloan dismissed the motions and the insurers appealed.
The Court of Appeal dismissed the appeals. The Court concluded that the process is intended to be completed with 60 days after an application for mediation has been filed; however, if mediation has not taken place within 60 days, insured persons are free to pursue either court action or arbitration.
The Court rejected the insurers` arguments that the cost to the industry could be $83 million as a result of the interpretation of the Act that does not require mediation to actually take place. The insurers submitted statistics that 75% of claims are resolved by mediation at FSCO. One has to expect a flood of court proceedings as a result of this decision, along with significant costs to insurers.
December 5, 2012
Appellate Jurisdiction
Under the Courts of Justice Act, appeals relating to amounts greater than $50,000 must be made to the Court of Appeal. Appeals of judgments relating to amounts under $50,000 are to the Divisional Court. Where only a portion of a judgment is appealed, does the jurisdiction change?
In Grammatico v. Chambers, 2012 ONSC 6518 (Div. Ct.), the parties disagreed on whether the proper court to hear an appeal was the Divisional Court or the Court of Appeal. The substantive judgment involved sums greater than $50,000, the threshold imposed by s. 19(1.2) of the Courts of Justice Act for appeals to the Court of Appeal. The defendant argued that it sought to appeal an interest component relating to costs, rather than the substantive judgment. Since the amount would be less than $50,000 the defendant's position was that the appeal was to the Divisional Court.
Justice Eberhard held that the appeal was to the Court of Appeal. The jurisdiction for appeal must be determined by the aggregate of the sums awarded. The fact that only one part of the decision was under appeal did not determine jurisdiction.
In Grammatico v. Chambers, 2012 ONSC 6518 (Div. Ct.), the parties disagreed on whether the proper court to hear an appeal was the Divisional Court or the Court of Appeal. The substantive judgment involved sums greater than $50,000, the threshold imposed by s. 19(1.2) of the Courts of Justice Act for appeals to the Court of Appeal. The defendant argued that it sought to appeal an interest component relating to costs, rather than the substantive judgment. Since the amount would be less than $50,000 the defendant's position was that the appeal was to the Divisional Court.
Justice Eberhard held that the appeal was to the Court of Appeal. The jurisdiction for appeal must be determined by the aggregate of the sums awarded. The fact that only one part of the decision was under appeal did not determine jurisdiction.
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