Consecutive inconsistent determinations of an insured’s entitlement to statutory accident benefits can be made without constituting an abuse of process

An Abitrator’s decision that Northbridge was responsible for paying statutory accident benefits to its insured was upheld on appeal, even though it was inconsistent with an earlier License Appeal Tribunal adjudicator’s determination that the insured was not entitled to benefits.

Insurance law – Automobile insurance – Priority coverage – Statutory Accident Benefits Schedule – Automobile, definition – Appeals – Standard of review

Northbridge General Insurance Corp. v. Jevco Insurance Co., [2024] O.J. No. 1130, Ontario Superior Court of Justice, March 14, 2024, P.M. Perell J.

The Ontario Superior Court of Justice dismissed Northbridge’s appeal of an arbitrator’s decision declaring that it was the primary insurer and responsible for paying statutory accident benefits (“SABs”).

This case involved a dispute about which insurer had responsibility to pay SABs to an insured who suffered catastrophic injuries in a vehicle incident. The insured was in the process of moving an inoperative vehicle in order to have it repaired. The inoperative vehicle was insured by Northbridge. The inoperative vehicle was on a trailer attached to a truck, which was insured by Jevco, when it shifted and injured the insured. Northbridge paid SABs and then made an application to the License Appeal Tribunal (“LAT”) for a determination of the insured’s entitlement to SABs as well as a submission to arbitration that Jevco had the primary responsibility for SABs as between the two insurers.  Northbridge submitted that the injuries were not caused in an automobile accident, as required under the Ont. Reg 34/10 (Statutory Accident Benefits Schedule). The LAT application proceeded first, then the arbitration.

The LAT adjudicator received submissions from Northbridge and the insured and determined that the insured was not entitled to SABs because the incident was not an automobile accident: the inoperative vehicle was not an automobile as it was not capable of being operated for more than a month prior to the incident. This decision was not appealed. The arbitrator received submissions from Northbridge and Jevco and found that the incident was an automobile accident because the inoperative vehicle was being transported for the purpose of being repaired, and that Northbridge was the primary insurer and liable to pay the SABs. 

The court determined that both LAT adjudicator and arbitrator considered the same issues: whether the inoperative truck was an automobile and whether the use and operation of the truck caused the injuries, and if so, whether that use and operation was the direct cause. The arbitrator found in the affirmative for each issue with respect to the inoperative truck insured by Northbridge. The court upheld these findings. The case law did not require that a vehicle be operational at the time of the incident for purpose of payments of SABs. 

The court also considered the issue of whether the arbitrator’s decision was inconsistent with the decision of the LAT adjudicator and an abuse of process. The court held that while inconsistent, it was not an abuse of process. The LAT and the arbitrator both have statutory grants of exclusive jurisdiction which each may require consideration of the issue of whether there was an automobile accident, and therefore inconsistency cannot entail an abuse of process if each body is exercising its statutorily prescribed jurisdiction. An arbitrator may be entitled to follow a prior decision of an LAT adjudicator, but they are not required to do so.

This case was digested by Mark A. McPhee and edited by Steven W. Abramson and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please feel free to contact them directly at [email protected] or [email protected].