In November 2018, Murray Ralston Lawyers, along with two other firms, launched class action lawsuits against the largest auto insurance companies in Ontario.
The lawsuits allege that these auto insurers treated thousands of accident victims unfairly over more than 8 years, and deliberately shortchanged them on their entitlements under the government-designed auto insurance scheme. The court actions seek millions of dollars in compensation for affected victims and a court order stopping the practice.
The Province of Ontario is also a defendant in each of the class action lawsuits. The claim alleges that the Province, through the Financial Services Commission of Ontario (FSCO), the body responsible for policing the insurance industry, turned a blind eye to unfair practices, even when they knew that victims were being denied benefits.
In Ontario, every vehicle owner is forced to buy government designed auto insurance. The terms and conditions are set by the government, but the insurance itself is delivered by private sector insurance companies. FSCO is supposed to make sure that these private insurers follow the law and treat individuals fairly.
The government auto insurance policy provides for the provision of certain medical and rehab benefits to individuals harmed in car crashes, known as statutory accident benefits (SABs). To keep premiums low, accident benefits are subject to restrictions depending on the severity of injury. By law, companies selling auto insurance must provide these benefits.
In 2010, the harmonized sales tax (HST) was introduced. HST is payable on many of the accident benefits. Even before HST came into effect, FSCO directed insurance companies to pay HST in addition to accident benefits and not to include HST in the calculation of any restrictions to benefits. Over the next eight years, they repeated this direction over and over again in formal FSCO Guidelines.
FSCO has been absolutely clear from the beginning of the HST that HST is not a benefit and any HST payable for benefits must not be deducted from the benefits available to the injured person. FSCO has repeated that direction time and again.
The named insurance companies ignored the government and the regulator. Where they can, they refuse to pay the HST and they use HST to wrongfully lower benefits resulting in victims receiving less care. For this reason, the Class Actions were started.
FSCO was aware of and acknowledged the insurance companies’ devious practices, but stood by while innocent victims suffered.
The lawyers at Murray Ralston prosecuting the class action believe that this is a wide spread industry practice and are investigating other insurance companies. A toll-free hotline has been established to receive complaints relating to any insurer who has wrongful reduced benefits by the amount of the HST. The number to call is (866) 540-2747