• Desjardins

Maria CeceSenior ManagerAutomobile Insurance Policy UnitMinistry of FinanceIndustrial and Financial Policy Branch95 Grosvenor Street, 4th FloorToronto, Ontario M7A lZ1

Re: DGIG Response to Interim Report-Ontario Automobile Insurance Dispute Resolution System Review

We read with great interest the Interim Report prepared by Justice Cunningham in conjunction with his

colleagues on the review panel. The report's contents demonstrated an excellent grasp of the complex

issues being faced by the various stakeholders involved in the accident benefits dispute resolution

system. The report's preliminary observations and recommendations are thoughtful and incisive and

have provided insurers and other stakeholders much to reflect on.

We would like to take this opportunity to provide Desjardins' response to the Interim Report's

observations and recommendations. We will organize our response along the lines of the report's

general principles.

Desjardins supports the report's recommendations with respect to improving the timeliness of access to

the dispute resolution system. In this regard, we strongly support the introduction of delivery standards

by way of timelines for scheduling arbitration pre-hearings and hearings. Further, we welcome the

introduction of time limits for the rendering of arbitration decisions.

However, as was noted in the report, there are many timelines already prescribed in the Dispute

Resolution Practice Code with respect to the conduct of mediations and arbitrations. Unfortunately,

these timelines are ignored by all of the DRS participants. Accordingly, we would suggest that whatever

timelines are implemented, that some methods of holding the parties and the decision makers

accountable with respect to those time lines also be put into place.

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Desjardins agrees with the recommendations which would result in a more flexible, less costly and more

efficient dispute resolution system that provides different tracks or processes based on the quantum of

the claim and the complexity of the issues involved in a particular matter.

Desjardins supports the report's recommendations with respect to introducing greater accountability

and equalization in relation to the cost burdens borne by the parties who use the DRS process. In this

regard, we support the report's suggestion that costs be addressed at the end of the process instead of

the beginning thereof so as to provide balance and penalize those who abuse it. Currently, cost awards

against claimants who have not been successful or who have abused the DRS process are modest and

unrealistic and do not reflect the insurer's true legal and other costs incurred in the process. Cost

awards need to be realistic. In this regard, we would suggest that the insurer's costs not be limited to

legal aid hourly rates where the insurer was successful in the arbitration and there was evidence of

abuse of process on the claimant's or their legal representative's part. Further, we would recommend

that where a health care provider was the "driving force" in initiating and pursuing mediation and

arbitration of a claim which was not substantiated and where there was evidence of abuse of the DRS

process on the part of that health care provider, the arbitrator should have the discretion to be able to

award costs directly against that health care provider.

Desjardins shares Justice Cunningham's concerns with respect to the high contingency fees charged by

some legal representatives in relation to accident benefits claims. We suggest the implementation of

some controls or limits on contingency fees in relation to such claims.

Desjardins disagrees with the introduction of a claimant's advocacy office. This only adds another type

of stakeholder into the system where claimants are already overly represented, in any event.

We agree with the report's observations that uncertainty and unpredictability are unacceptable to all

stakeholders involved in the DRS process. Insurers require certainty in order to set reserves and

premiums for the automobile insurance product. Claimants need to know what is or is not covered with

respect to their claims for benefits.

In this regard, Desjardins does not believe that the introduction of independent medical consultants into

the DRS process would contribute to this certainty and predictability. It is our position that the

introduction of such medical consultants for the purpose of reviewing files and providing opinions on

appropriate treatment would only add another layer of cost and complexity to a process which is

already expensive and complex. There are already enough medical experts involved in the process on

both sides of the disputes. We do not know what value an additional medical consultant would bring to

this process. Furthermore, we are concerned with the independence and neutrality of such medical

consultants. As the report points out, how do we find medical consultants who will be considered

neutral by all stakeholders? In addition, how do we ensure that arbitrators and judges pay attention to

the opinions of these independent medical consultants? Most recently, in the context of the Designated

Assessment Centre assessors, their opinions and conclusions were often ignored by arbitrators.

One must also bear in mind that many disputes in the system do not deal with medical issues but with

the definitions of terms used in the SABS such as "incurred" or what is considered "compelling

evidence". The independent medical consultants would be of no use with respect to these issues.

We do support the report's observation that there must be a separation of policy and adjudication in

the automobile insurance system. In this regard, we reiterate the suggestion which was made in our

earlier submission that consideration be given to using the rule making authority provided in the

insurance legislation to develop something similar to the Operational Policy Manual which has been

created in the context of the Workplace Safety and Insurance Board. We believe that policy should not

be made by arbitrators but should be developed by the Superintendent of Insurance, after consultation

with relevant stakeholders. We believe that such rules / directives / policy making authority would

enhance predictability and certainty for all participants in the accident benefits scheme as they would be

binding on claims handlers and DRSdecision makers alike. Further, it would provide the Superintendent

with the ability to correct "rogue" decisions made by arbitrators or judges which do not reflect the

underlying intent of the accident benefits scheme.

Desjardins is in general agreement with the recommendations made in this part of the report. We wish

to comment on two proposals made by the review.

Desjardins strongly disagrees with the granting of direct access to health care providers in relation to

disputes involving their services. Our concerns in this regard are as follows:

• Disputes involving health care providers involve more than a bill collection exercise. The issues

at the core of the disputes usually require the direct involvement and participation of the

claimant - for example, the claimant's past medical conditions and health or the nature and

extent of the injuries which they sustained in the motor vehicle accident. We are concerned

that the introduction of a "direct dispute" mechanism for health care providers would relegate

the claimant to a secondary, subsidiary role in the dispute process with respect to their own

claims for benefit entitlement.

• Allowing health care providers to take the lead in disputes would require them to assume the

roles of treatment provider, expert witness and advocate on behalf of the claimant. The health

care provider is placed in a potential conflict of interest in the DRS process as they are forced to

perform all three roles during various stages of the dispute. A good example of how this

potential conflict of interest could play out in a dispute would start with the fact that the

claimant has a finite amount of benefits available for medical and rehabilitation treatment - in a

non-MIG situation, up to $50,000. Further, these benefits are limited to a 10 year time frame.

Suppose, the health care provider is recommending treatment or rehabilitation which will erode

a significant amount of those limits in a very short period of time after the accident. Who will

look out for the claimant's interests in these situations?

• Removing the claimant out of the DRS process enhances the opportunity for fraud being

perpetrated by unscrupulous health care providers. Presently, in many instances, it is the

claimant who provides the insurer's best defence to such practices by confirming or denying the

need for the treatment, the extent of treatment received and the cost thereof. Insurers will lose

this important preventative tool.

• Health care providers might abuse the "direct dispute" mechanism by initiating multiple

proceedings against the insurer, without the knowledge of the claimant and in the clinic's own

self interest.

It is Desjardins' firm belief that the claimant must remain an integral part of the DRS process and, more

importantly, must play an active role throughout the process, from initiation of the dispute to its

conclusion. In short, "it's all about the claimant".

The second aspect of the streamlining recommendations which we wish to address concerns the appeal

process. Although Desjardins has no particular difficulty with eliminating appeals to the Director's

Delegates at FSCOand proceeding to an appeal before a single judge of the Superior Court, we offer the

following caveat. We believe that it is critical that the appellate judges be knowledgeable of the

Statutory Accident Benefits Schedule, the guidelines and relevant case law. In this regard, we would

recommend that a pool of judges with such expertise be established similar to the pool of judges who

are available to hear Commercial List matters. A judge who would hear an appeal with respect to either

a FSCOarbitration decision or an initial court decision involving an accident benefits dispute would be

drawn from such a pool of expert judges.

The Interim Report supports extending the one year prohibition on settlements as a way of curbing the

counterproductive desire of insurers to close files on a full and final release basis. Desjardins offers

qualified support for this proposal; however, we believe that full and final settlement of certain accident

benefits in specified circumstances would benefit both insurers and claimants. Our suggestions in this

regard consist of one of the following two options:

Extend the prohibition on settlements for ~ categories of accident benefits for a period of

up to 4 years following the motor vehicle accident. This should act as a deterrent to

unscrupulous legal representatives and remove the incentives to them associated with

presenting and prolonging unmeritorious claims and disputes.

(a) Prohibit settlements of all categories of accident benefits where the claimant has

sustained a minor injury; and

(b) Allow settlements of accident benefits in relation to non-minor injury claims but

only after two years following the motor vehicle accident. We believe that by this

point of the claim file, both parties have a better idea of the nature and extent of

disability arising from accident-related injuries and would be in a better position to

determine future exposure in relation to benefits.

It is our submission that providing these qualifiers with respect to the settlement of accident benefits,

provides a reasonable balance between the interests of the claimant and the insurer for finality to the

claim file.

Desjardins supports the report's recommendations with respect to introducing a more evaluative and

involved intervention at the initial stages of the dispute. In this regard, we welcome the introduction of

a system which would deal with jurisdictional issues and document production problems at the outset.

We would like to address the internal review recommendation made in the report. We have no

difficulty with the suggestion other than to recommend that the internal review process must be

claimant-initiated rather than automatic on every single denial of benefits. If a claimant disagrees with

the decision and wishes the insurer to conduct an internal review of the decision, then this request

would be accommodated. We are concerned, however, that such a mechanism could be prone to abuse

by some claimants through their health care providers or legal representatives as a way of inundating

the insurer with multiple successive requests for internal reviews.

Desjardins has no particular difficulty with introducing private DRS resources to the system. However,

all arbitrators, mediators and other decision makers need to possess the requisite accident benefits

expertise and be accountable for their decisions and adherence to any prescribed timelines. In addition,

the costs associated with any private DRS resources must be reasonable. Costs associated with the DRS

process should be shared by both insurers and claimants.

Desjardins offers support with respect to the proposals in relation to the formal internal review process

(subject to the comments above), a case manager serving as a "gatekeeper" in relation to jurisdictional

and document production issues as well as the assignment of an arbitrator who would arrange a

mediation session. We welcome the recommendation that the arbitrator provide a non-binding opinion

on likely outcome. We believe that this would assist the parties in finding an early resolution to the

dispute. Desjardins also supports the triage role to be performed by this arbitrator in relation to

determining whether a paper or in-person hearing is required and dealing with the usual pre-arbitration

rulings which may be required by the parties.

We reiterate, however, that the timelines set out in the report's recommendations need to be enforced

in some fashion. Further, we would recommend that the appeal process, whether from a FSCO

arbitration or an initial trial decision, proceed to a single judge of the Superior Court with expertise in

accident benefits matters.

We look forward to discussing the report and our feedback herein with the review panel on December

10,2013.

Ralp D'AngeloSenior Corporate CounselProperty and Casualty Insurance Legal Affairs

L,-- ~Kimberley TyeClaims Legal CounselOntario, Atlantic and Western Regions

c.c. Kathleen WynnePremier of OntarioLegislative BuildingQueen's ParkToronto, Ontario M7A lAlbye-mail: premier@ontario.ca

c.c. Insurance Bureau of Canada777 Bay Street, Suite 2400P.O. Box 121Toronto, Ontario MSG 2C8Attn: Barbara Sulzenko-Laurie

Vice-President, Policy and Senior Advisorbye-mail: bsulzenko@ibc.ca

c.c. Michael Weismanbye-mail: MichaeI.Weisman@ontario.ca

c.c. Kenneth LindhardsenDesjardins General Insurance GroupVice-President, Claims Operations,Ontario, Atlantic and Western Regionsbye-mail: kenneth.lindhardsen@dgig.ca