December 9, 2014

SABS Upate: Bill 15 – The Next Regime

The rules of auto insurance in Ontario are changing. On November 20, 2014, Bill 15, Fighting Fraud and Reducing Automobile Insurance Rates, 2014 (the “Bill”) received Royal Assent. The stated intention of the Bill is to reduce costs, fight fraud and protect consumers; however, intention and effect are often two different things.


The Bill affects a number of pieces of legislation including the Insurance Act.  Notable, for injured motorists, are the following amendments:

(1)The prejudgment interest rate on claims for pain and suffering will be reduced from the rate prescribed by Rule 53.10 of the Rules of Civil Procedure (5%) to the rate prescribed by section 128 of the Courts of Justice Act, which is currently 1.3%.

(2)Arbitrations, formerly conducted through the Financial Services Commission of Ontario (“FSCO”), will be conducted by the Licence Appeal Tribunal (“LAT”).

(3)The right to bring accident benefits disputes to Court will be extinguished.  Disputes will be brought to the LAT with a right of appeal to the Divisional Court.


The Bill does not specify how the change in prejudgment interest rate will apply.  Presumably, the new rate will apply to causes of action arising out of events that occur after the Bill come into force.

The application of the new resolution system to disputes that arise prior to the date the Bill comes into force but not resolved as of that date is not yet determined.  The Bill specifically leaves this determination in the hands of Regulations which have not yet been drafted.

It is unclear how and by whom the LAT will be staffed.  Backlog has been a chronic problem for FSCO arbitrations; it will be critical to the success of the LAT that this issue be addressed.


The decrease in prejudgment interest rate will reduce the level of compensation being provided to injured parties. In addition, it will reduce the incentive to insurers to settle claims expeditiously.  Presumably, this change was designed to decrease costs to insurers and in turn, decrease insurance premiums.  The costs to insurers will likely decrease; however, whether the cost savings will be passed on to the consumer is yet to be seen.

Accident benefits disputes once brought to FSCO arbitration or Court will now be brought to the LAT.

The implication of this is that if the LAT functions poorly, claimants will have no other options.  Presumably, the LAT will be staffed by persons with specialized knowledge of accident benefits in hopes of expediting the process; however, the cost to claimants is the flexibility provided by the Court system and certain rights like the right to a jury, which will no longer exist.

In any event, once the Bill comes into force, this will be the system and all must operate within it, at least until the next and inevitable regime change.  It will be important for claimants, lawyers and treating health practitioners to stay abreast of new case law as a litany of litigation is expected to iron out the initial kinks.

A complete copy of the Bill is available at 

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