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Insurance Law - AUTOMOBILE INSURANCE - Accident benefits - Definitions - Accident

Thursday, December 01, 2016 @ 7:00 PM  


Appeal by Ayr Farmers Mutual Insurance Company (Ayr Farmers) from decision of application judge determining that matter could not be determined on an application. Wright applied to Ayr Farmers for statutory accident benefits (SABs), claiming that he was injured when he tried to close his garage door after backing his vehicle out of his garage. Ayr Farmers denied Wright’s claim for SABs, stating that his injuries were not the result of an “accident” as defined in the Statutory Accident Benefits Schedule, and that he was therefore not entitled to SABs. Wright applied for mediation under s. 279 of the Insurance Act to resolve his dispute with Ayr Farmers. Rather than attending the mediation, Ayr Farmers issued an application under Rule 14 of the Rules of Civil Procedure requesting a determination of whether Wright was involved in an accident within the meaning of the Schedule. Ayr Farmers argued that the question of whether Wright was involved in an accident was a preliminary issue that must be determined before the s. 279 scheme applied. The application judge held that the s. 279 scheme governed all disputes concerning entitlement to SABs, including whether a claimant was involved in an accident and qualified as an insured person under the Schedule. The application judge also found that this was not an appropriate case for an application. Ayr Farmers submitted that the question of whether Wright was involved in an accident was not a SABs issue but rather a coverage issue.

HELD: Appeal dismissed. The application judge was correct in holding that the s. 279 scheme governed all disputes concerning entitlement to SABs, including whether a claimant was involved in an accident. Whether Wright was involved in an accident was not a preliminary issue that fell outside the s. 279 scheme. Requiring either the SABs claimant or an insurer to apply to court for a preliminary determination of whether a claimant qualified as an insured person was inconsistent with the creation of a comprehensive alternative dispute resolution process. While court proceedings could provide a more expeditious process where it was determined a SABs claimant did not qualify as an insured person, a court proceeding would be duplicative and counter-productive where a SABs claimant qualified as an insured person. Proceeding in that way would only potentially be faster if it was ultimately determined that the claimant did not qualify as an insured person. Having regard to the purposes of the Act and the s. 279 scheme, “insured person” as it appeared in the s. 279 scheme could reasonably be read as encompassing all persons claiming entitlement to benefits under the Schedule, whether or not it was ultimately determined that they were entitled to benefits.