Grewal v. Peel Mutual Insurance Company, 2021 CanLII 111183 (ON LAT)

Full Decision

LAT Confirms No Jurisdiction to Award Punitive Damages in Accident Benefits Disputes

The original LAT decision denied the applicant’s motion to add the issue of punitive damages in the amount of $150,000.00. On reconsideration, Adjudicator Mazerolle again denied the applicant’s request.

The applicant alleged the adjudicator made errors of law including: (i) the legislature did not indicate that common law damages were removed as a potential remedy for the Tribunal; (ii) awards under s. 10 of O. Reg. 664 (commonly referred to as special awards) do not address the “subjective” mischief that can be captured by damages; and (iii) s. 280 of the Insurance Act does allow for the power to add damages, a necessary finding in light of the “exclusive jurisdiction model” from Weber v. Hydro Ontario, 1995 CanLII 108 (SCC).

The adjudicator found that many of these grounds for reconsideration were simply restatements of arguments made during the motion hearing. Of the new arguments raised on reconsideration specifically, the need for adjudicators to fill in remedial gaps, Adjudicator Mazerolle found that the legislature knew it was removing common law damages from the realm of accident benefits disputes when it shifted the cases to the LAT. And while the removal of common law damages may mean that some insured persons do not have access to a meaningful remedy to address certain forms of mischief within accident benefit disputes, the weighing of such policy concerns is a task best left for the legislature.

The applicant argued that s. 3(2) of the LAT Act allowed the tribunal to award a punitive damages remedy. It provides that the Tribunal has all the powers that are necessary or expedient for carrying out its duties. The LAT was not convinced this provision can be used to create a remedy that has been removed by the legislature.

In Weber, the Supreme Court used the “exclusive jurisdictional model” to determine what disputes fall within an arbitrator’s purview. In support, the applicant cited Stegenga v. Economical Mutual Insurance Company, 2019 ONCA 615, wherein the Court of Appeal held that the courts are barred from addressing bad faith claims post-June 1, 2016 for accident benefits disputes since the LAT has sole jurisdiction over all accident benefits disputes. As such, the applicant argued that if the tribunal has exclusive jurisdiction over accident benefits disputes then this jurisdiction confers the power to grant damages.

The LAT disagreed, finding that, although the tribunal possesses exclusive jurisdiction over accident benefits disputes, it does not mean the powers the courts used to possess through its former jurisdiction has necessarily transferred to this new forum.

With the removal of the ability to pursue bad faith claims in the courts, injured victims remain without a remedy to pursue damages against insurance companies beyond special awards under s. 10 of O. Reg. 664 which requires objective evidence of unreasonable behaviour, a high bar to meet in most cases.

Written by

Called to the bar in 2009 and having successfully passed the Ontario, Michigan and US multistate bar exams, Samia M. Alam is a contract lawyer for plaintiff personal injury law firms in the Hamilton and surrounding areas with a special focus on catastrophic impairment claims. She also has been teaching at Mohawk College since the inception of the paralegal program in 2014 and teaches Legal Research and Writing, Statutory Accident Benefits and Tribunals Practice and Procedure. She is received her LL.M at Osgoode Hall Law School, and she is a member of the Hamilton Law Association and Ontario Trial Lawyer's Association.