Disputing a finding of fault under the Fault Determination Rules is not an easy process. A reader who is currently attempting this was told by her insurance company's Complaint's Officer that she was facing an "up-hill battle." In his opinion, "While the Fault Determination Rules are ridiculous, you just have to live with them because they are legislated."
This statement suggests that Ontario legislators foisted the Fault Determination Rules onto an unwilling insurance industry. This is not the case at all. Accident settlement rules were developed by the insurance industry many years ago for their own internal use. Although these rules were not law in any province, the majority of insurers across Canada voluntarily agreed to be bound by them as if they were mandatory .
When Ontario became a No-Fault auto insurance province, the Fault Determination Rules didn't change radically from what had previously existed. The new Rules do include a provision that auto insurers are legally required to apply the most favourable rule to their own insured. If a driver believes that this did not occur in their accident, they are permitted to sue their insurance company.
In an effort to provide an alternative option, the Financial Services Commission (FSCO) decided that fault assessment disputes should be resolved through non-binding mediation. This process of negotiation, encourages both sides to be flexible in their position in an effort to resolve the matter. For the driver trying to achieve a zero percent fault assessment, this means agreeing to accept partial liability, which is exactly the outcome they are trying to avoid.
The Insurance Regulators could have considered a much better solution. The insurance industry long ago realised that their disputes involving minor recovery amounts should not go to court, instead, they agreed that these should be arbitrated by a panel of their peers. This process is quick and unlike mediation, the decision of the arbitration panel is binding on the participants. Also, unlike mediation where the outcome of the process remains confidential, arbitration decisions are reported and can be reviewed by others who have similar disputes.
The dilemma is that binding arbitration does replace the right to sue, which some drivers may believe t they should not give up. Yet, consider this. The right to sue is only of benefit to those who have the time and the means to afford this option; most drivers have neither and the insurance industry has both. Arbitration may offer the better alternative.
The following chart provides an overview of the two systems so that readers can decide for themselves which system they would prefer.
| Dispute Between Insurers | Dispute Between Insured and Insurer | |
| 1 | If Adjusters cannot agree on the issue of liability, the matter is referred to Pre-Arbitration Officers at the company level | Follow the steps outlined in your insurance company's written complaints handling procedure, which includes discussion with the Complaint's Officer. |
| 2 | If the Pre-Arbitration Officers do not agree, the matter is referred to Arbitration by written submission. | If you cannot resolve the dispute; request a Final Position letter from your insurance company, which should include the identity of the independent Ombudsman to whom you can refer the dispute. |
| 3 | The Arbitration Panel consists of senior Claims Managers who rotate in this position. They consider the application and they render their final and binding decision. | Contact the service representative at the Ombudsman's office. They will instruct you to complete the on-line form and will advise on which documents you must provide to them before the matter can proceed to mediation. |
| 4 | The decision is made available within the insurance industry for reference, similar to court decisions. | The Ombudsman will then arrange a two-hour mediation between you and your insurance representative. This takes place at the mediator's office. The mediation is free but you must pay all of your personal costs. |
| 5 | The mediator has no power to enforce a resolution unless both sides agree. The mediation ends at the end of the allocated time, with our without resolution being achieved. If resolved, the final outcome remains confidential between the parties. | |
| 6 | If the mediation fails, the insured may still litigate |
Susan Saksida, CIP is an Insurance Consultant. Questions or comments can be emailed to insurance compliancematters@rogers.com
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