Ontario Court of Appeal Decision Regarding Failed Mediation

Tom Golfetto, Director of Arbitrations at the Financial Services Commission of Ontario (FSCO) posted the following overview of two recent Ontario Court of Appeal decisions which impact the FSCO mediation process. A FSCO mediation is a necessary procedural step which an injured person must take, before being able to pursue an insurer for a denied benefit by way of either an arbitration or lawsuit. Mr. Golfetto sets out steps injured persons, who have a dispute with their insurer, may now take to move their dispute forward expeditiously.  

On November 29, 2012, the Ontario Court of Appeal issued decisions on appeals of several lower court decisions regarding when mediation should be considered failed. These included a decision on the matter of Hurst v. Aviva Insurance Company (Cornie v. Security National Insurance Co. et al) and a decision on the matter of Younis v. State Farm.

In Hurst, the Court upheld the lower court decision and found that mediation fails by statutory definition if no settlement has been reached within 60 days of the date of filing an application for mediation, or within the time extended by agreement of the parties. The Court also found that a Reporter of Mediator was not required in order for a file to proceed to arbitration or to court.

In Younis, the Court dismissed the lower court decision and found that a claimant must wait until the 60-day period has expired before bringing an action to court or filing for arbitration.
It should be noted that an arbitration appeal decision on failed mediation came to a similar conclusion as the Ontario Court of Appeal.

Impact on Parties

Parties who filed applications for mediation with FSCO more than 60 days ago should submit a form to FSCO indicating that they either jointly agree to extend the time for mediation or that either party wishes to receive a failed Report of Mediator. If FSCO does not receive this form from parties, by default, their applications will remain in queue for assignment to a mediator.

Applications for Arbitration that were filed without a Report of Mediator and have been held in abeyance, pending the Court of Appeal matters, will proceed to arbitration. Upon request, FSCO will issue Reports of Mediator for these cases.

FSCO expects a significant number of applications for arbitration to be filed, which will greatly increase the wait time for arbitration proceedings. The current wait time for an arbitration pre-hearing is six to eight months.

Parties awaiting mediation are encouraged to remain in the queue for assignment to a mediator. The average wait time for mediation is expected to substantially decrease as ADR Chambers, an external dispute resolution services provider, is now handling an additional 2,000 mediations per month. This is over and above the files that continue to be handled by FSCO’s mediators.

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