The Ontario Superior Court has provided its answer to when a claim can be issued, or an Arbitration filed for, after a denial by the Accident Benefit insurer. Insurer's have regularly taken the position that a claim or Arbitration cannot be commenced until a Financial Services Commission of Ontario (FSCO) mediation has been conducted and failed. Unfortunately for all involved, the wait times to obtain a FSCO mediation has become excessive, at times hovering around the one year mark.
The Honourable Justice Sloan in Cornie v. Security National Insurance ruled that 60 days after the insured has filed an application for mediation, the insured has the option to commence a court action:
"In contrast to the injured victims, insurance companies are not in a vulnerable position. while there is nothing to suggest that these insurance companies are in any way responsible for the delay at mediation, there is no evidence that the delay in mediation is of any real consequence to them.
The insurance companies take the position that the accident victims must simply wait. To entertain this argument could mean an accident victim might have to wait 100, 300 or 500 days for mediation. I find that submission preposterous."
Arbitrator Rogers in Leone v. State Farm supports this interpretation by the court in Cornie although for different reasons.
The law now provides the insured the right to either wait for their mediation, or take further steps if FSCO cannot provide a mediation within the 60 day requirement prescribed by the Insurance Act. To demand that a person who has been denied a benefit wait one year for the dispute to be mediated before they can challenge the denial is untenable.