Consideration of Bill 164, An Act to amend the Insurance Act and certain other Acts in respect of Automobile Insurance and other Insurance Matters / Loi modifiant la Loi sur les assurances et certaines autres lois en ce qui concerne l'assurance-automobile et d'autres questions d'assurance.
The Chair (Mr Paul Johnson): I'm calling the standing committee on finance and economic affairs to order. Today we resume clause-by-clause consideration of Bill 164, An Act to amend the Insurance Act and certain other Acts in respect of Automobile Insurance and other Insurance Matters. The clerk would like to inform the committee members that there are packages in front of your respective seats that are numbered and replace the numbered motions that are already in your existing packages. We are today on section 12. Mr Owens would like to make some comments.
The Chair: I guess I offered some misinformation. There are some papers that are marked differently in that there are some replacement government motions. The ones that are to be replaced would correspond to the numbers of those that you have existing and the new ones would be in addition to those that you have.
"10.1 prescribing coverages and endorsements in respect of contracts of automobile insurance that insurers or a class of insurers are required to offer, deeming the benefits provided by the coverages and endorsements not to be statutory accident benefits for the purposes of part VI, and prescribing the circumstances in which the coverages and endorsements shall be offered."
Mr Owens: This is an amendment that was requested by the opposition in respect to the view that insurance companies should be able to provide extra income endorsements etc. This will make it clear that there is not a statutory prohibition to the provision of those coverages, but they will not form part of the accident benefits regulation.
Mr Owens: This has come out of the discussion that we've had back and forth. Especially Mr Harnick has raised the concern with respect to extra income protections. It was his concern that insurance companies are in fact prohibited by that. We don't subscribe to that view, and in terms of adding clarity to the legislation, this is the purpose of the clause, as well as to allow the government to mandate these coverages outside of the accident benefits regulation.
Mr Harnick: I don't know how this works. It says that this section will prescribe coverages. If you go back to section 121, it says the Lieutenant Governor in Council may make regulations "prescribing coverages and endorsements in respect of contracts of automobile insurance that insurers or a class of insurers are required to offer, deeming the benefits provided by the coverages and endorsements not to be statutory accident benefits for the purpose of part VI, and prescribing the circumstances in which the coverages and endorsements shall be offered."
As I understand it -- I really am seeking clarification from the parliamentary assistant and his legal staff -- this says that the Lieutenant Governor may prescribe coverages and endorsements in respect of contracts of automobile insurance that insurers are required to offer. That is supposed to answer the shortfall in the legislation in so far as economic loss is concerned, as I understand it. Where are the regulations that tell us what endorsement must be offered? My understanding is that there will be a mandatory endorsement, an endorsement that must be provided by insurers, that will be optional for insureds to purchase. This lays the groundwork for that. Am I correct?
Mr Harnick: You see, here's my problem. My problem is that I know the minister recognizes that there's a great big hole in this legislation and he's acknowledged to me that he wishes to fill the hole by having an economic loss endorsement. I do not see, from the reading of this section, where anybody is saying that economic loss endorsement is forthcoming. Perhaps you can enlighten me. Maybe it's somewhere else in here. When are we going to see it? How can I vote on this if I don't know what the rest of the package is going to say? Do you understand, Mr Owens, my dilemma?
Mr Owens: I understand clearly what your question is. I am not sure I agree with the other premise. I understand that you have had conversations with the minister on this particular issue. However, it's not my understanding at this point that a commitment has been made with respect to this particular endorsement that we're speaking about. I'd be pleased to follow that up in terms of whether or not the minister in fact has committed to you that an endorsement is forthcoming.
Mr Owens: In terms of the wording of the language, however, if in fact this is the reality as you have described it, then there certainly needs to be an enabling clause to allow that particular event to take place. So whether or not you see it is not particularly germane to the language under discussion at this point.
Mr Harnick: Just to carry this on, the minister has given me every indication that there will be an economic loss endorsement. I understand that he's made that quite clear to a number of interest groups that have some concern about this aspect of the bill. I would ask that we hold this down so that the parliamentary assistant might be able to provide us with some idea of what is going to go with this or whether there's a commitment so that we know essentially what this is truly intended for. I know it's enabling legislation, but if it's not going to enable anything, it's pretty hard to talk about it in the abstract.
I can appreciate that once we know something is forthcoming, we know we should vote on it and probably pass it. All I'm asking is that the parliamentary assistant seek some clarification so he can put it on the record, tell us what's coming so that we don't have to deal with this in the abstract. I'd suggest that we put this over for now.
Mr Owens: I can respond to Mr Harnick. We certainly don't have a problem in doing that at this point. In fact, it might help speed this process along, so we will do that. I cannot, of course, commit that I'll be able to speak with the minister before the end of the day's proceeding, but I'll certainly endeavour to do that.
"10.3 governing the procedure for determining who is liable to pay statutory accident benefits under section 268, including requiring insurers to resolve disputes about liability through an arbitration process established by the regulations and requiring the interim payment of benefits pending the determination of liability."
Mr Art Halpert: The basic purpose here is to ensure that injured persons get paid promptly. At times two insurers will be arguing over who should pay, and neither of them wants to pay, so this will allow us to create regulations that will indicate that an insurer shall pay and will dispute it later.
Mr Harnick: I think this is actually quite an important section, because anybody who's been involved in these situations knows -- and I'll give you an example. Sometimes you get a car that might rear-end another car, that knocks it up on to the sidewalk and it knocks over a pedestrian, and that pedestrian doesn't own a vehicle of his own. So the issue then becomes, does the car that strikes the pedestrian pay the accident benefits, or are the accident benefits liable to be paid by the car that caused the accident, which is the one that rear-ended the car that hit the pedestrian? There's just been a whole history of difficulties in this area where you can't get the accident benefits paid by either, so that the insured goes with nothing.
Again, my problem with all of this is that we have not had an opportunity to see the regulations and to comment on the regulations to see that they meet the situations that might arise. I tell you that people who have practised in this area can have a very positive effect on doing this right. If you'd only show us the regulations so that we could get their input, we wouldn't end up with these neat little legal problems that lawyers and insurance companies can wrestle over for a year, a year and a half while they go through arbitration procedures or whatever. It would be a very positive thing if we can tie as many of these situations down as possible so that the insured who is hurt is not going to be left waiting until every eventuality is ultimately worked out.
But part of the difficulty that I have in dealing with section 12 of the bill, which is section 121 of the Insurance Act, is that we are not getting to look at the regulations that are going to come through in conjunction with this section. I don't know how close the government is to preparing those regulations, but there's obviously an enormous amount that's still to be done here.
It concerns me because I don't know what timing the government has for the passing of this bill and it would be helpful if the parliamentary assistant could give us some idea of whether we're going to be going through this clause-by-clause for the balance of the summer, whether we're going to be waiting for the Court of Appeal to talk about the threshold case now before it or whether we're going to be getting a time allocation motion that's going to send this upstairs to the big room on the second floor.
The difficulty I have is that, as I read through this bill and I see section after section referring to regulations that are still to be drafted and we have no idea what stage those drafting procedures are in, it tells me that there is an enormous amount of work still to be done in this area. I think, to be perfectly fair, there are insurers who are going to have to implement systems to deal with the new accident benefits scheme, and it's going to be very, very difficult for them unless the government is able to give us some idea of the time frame, where they're at and what these regulations in fact look like.
When I read these sections, I can't help but think we're just rushing to a conclusion with most of the work still to be done and I wonder if we could get some clarification about some of this. I wonder if we can see some of these regulations. I appreciate that we're not allowed to debate the regulations, but I'll say what I said a long time ago: You're amending a few sections of the Insurance Act, but the heart and guts of this in terms of how it's going to affect the public are found in the regulations.
I would like to see, at least as a courtesy to the members of this committee, and particularly the government members because they're going to take the heat when this doesn't work -- surely they should have the opportunity, as we should, to take a look at the regulations as drafted to date and see what they currently look like.
I remember getting a pile of regulations early on, none of which lawyer Endicott or any of his minions could really explain to us because they couldn't understand them either. Now I look at this bill and I see there's even more regulations coming and, you know, I don't know where we're going here and I don't think, with respect, the government members on this committee know where we're going.
We haven't seen lawyer Endicott here to try and explain this to us, because I'm sure he's been studying it ever since he left here with his tail between his legs when he couldn't answer the questions we asked several months ago. I know he's gone back to the drawing board and starting studying so he can give us the explanations, and now I see there's even more regulations coming. Please tell us what's going on here.
Mr Harnick: Mr Chairman, on a point of privilege: I would ask the parliamentary assistant to withdraw that remark, because there is absolutely no truth to it at all. I think the hard part of this whole exercise, and the oblique reference to the social contract, is that the poor civil servants in this province have to put up with a government that's totally incompetent in everything it does.
Mr Owens: Thank you, Chair. In terms of the questions that Mr Harnick posed, I find it a little bit more than surprising that in light of the fact that he has been meeting with the minister on a regular basis and conducting conversations around the regulations and this legislation, he would still be raising questions with respect to the intent of the regulations. As I indicated when I moved the amendment, this is an amendment that comes directly out of those conversations.
In terms of the time lines, I've received no instructions. We will continue until the day becomes long, if that's the wish of the committee, and hopefully we can move through this section and move on further.
The regulations, as the member is aware, have been out, drafts 1 and 2, within the community. He talks about the practitioners from the law society. They have clearly been involved through their various representations, through the advocate societies. They've had a large amount of time and a large amount of input into the regulations. We are continuing to consult on the regulations and we'll certainly continue to consult with Mr Harnick, both in his role as a member of this Legislature and also in his role as a member of the personal injury bar.
Mr Monte Kwinter (Wilson Heights): I wonder if I could get some clarification either from the parliamentary assistant or the representative of the insurance commission. Under this proposed amendment, and from what I gather reading it, I assume that the intent of it is to deal with the procedure for determining who is liable to pay the statutory accident benefits under section 268.
Using Mr Harnick's example, if automobile A, which is insured by insurance company A, and automobile B, which is insured by insurance company B, are involved in an accident and there certainly is no preconceived determination as to who is really liable, how does this work? How does this particular provision work where it says, "through an arbitration process established by the regulations and requiring the interim payment of benefits pending the termination of liability"?
I can understand where there's one automobile and one insurance company and one victim, and you have to determine whether one is liable or not and to what extent, but there is a case where the question in point may be who is liable and there are two insurance companies, two vehicles, and someone has to make an interim payment pending the outcome of that arbitration. Who decides who is making that interim payment?
Mr Halpert: I think the regulation itself will specify who has to pay immediately so that the injured party gets payment immediately. If the parties can't agree as to which party is liable, then it will have to go on to an arbitration process.
Mr Kwinter: Well, under the provision of this amendment, it says that there will be regulations requiring the interim payment of benefits pending the determination of liability. If you're going to have one arbitration which is going to determine the liability, then there won't be an interim payment. If you can't determine who it is who's going to make the interim payment and you say you're going to have to have arbitration to decide who's going to make the interim payment, then you're going to have to have an arbitration for the interim payment so that you can then proceed with the arbitration for the final.
Mr Halpert: The likelihood -- and the regulation hasn't been written yet -- will specify who has to pay and when. That would be immediately. If the insurers can't agree on who is liable and to what extent they're liable, then they can apply for arbitration to settle that matter. In the meantime, the insured person is getting paid.
Mr Kwinter: If I can just backtrack, Mr Harnick's example is a good example. An automobile is parked on the side of the road without a driver in it. It's just parked there, minding its own business. Another driver comes along in another automobile and hits the parked automobile and that parked automobile jumps the curb and hits a pedestrian. Now, somewhere along the line someone is going to have to determine who is liable. I can't imagine the insurance company of the parked vehicle acknowledging that it's liable, saying: "How can I be liable? My customer's car was parked. He wasn't even in it. It was parked legally and a car hit it and, just by happenstance, it happened to hit a pedestrian."
I'm saying that somewhere along the line there's going to have to be an interim payment pending the liability, but in that particular case -- and I admit it's a unique and relatively rare case -- somewhere along the line someone is going to have to make the determination of who is going to pay. If you try to get the insurance company which is insuring the car that was parked, it would say, "Why would I possibly have to pay?" I'm saying, "How is that done?" When you say there are going to be regulations, that of course goes to the base of the problem that we have. When we don't have regulations, we're asked to formulate laws and statutes based on regulations that we don't know about.
All I'm asking, in a practical sense -- this isn't a trick question. I'm not being critical. I'm just saying, when I heard this potential scenario and when I read this amendment and it says that there's going to be an interim payment pending the determination of liability, what happens if there can't even be a determination as to who's making that interim payment? Then what happens? That's all I'm asking. As I say, I don't have an answer and I'm not looking for -- I just want to know how the thing works.
Mr Halpert: I think the regulation will determine who pays. That's one issue. Then, if that insurer pays and later on it's determined that it shouldn't have paid, that the other party was liable, there would be a refund. One would be instructed to pay back the first insurance company.
Mr Halpert: Okay. No, I'm saying there are all kinds of situations where it's not that black and white; there are all kinds of shades of grey. You'll have insurance companies fighting from here until doomsday, maybe through the courts, to determine who pays, and meanwhile the innocent accident victim is sitting there not getting paid. The purpose of this is to say, "Okay, company A, you pay now; we'll settle this matter later," and if it turns out that it's company B which should have paid, then company A will get a refund from company B.
Mr Tilson: I must confess I'm not satisfied with the issues raised by Mr Kwinter and Mr Harnick, because they're quite right: This is a most important section. I understand the intent that the parliamentary assistant has said. The intent is -- not to put words in your mouth -- to give the innocent victim funds and, to take the example of the pedestrian, to give him funds before all these other people fight it out. I understand that, but we now have a statement that's been made by Mr --
This issue, I submit, is most important. I, as one member of this committee -- and I can't believe other members of the committee -- would like to receive some input from the insurance companies on the process of arbitration. I mean, with all due respect, I don't think Mr Kwinter's question has been answered yet: Are we going to have arbitration to determine an arbitration? I think that's a very good question, the way this section is worded to govern the procedure through an arbitration process. Well, he's right. Does that mean that you're going to have an arbitration to determine an arbitration process? It may well be that the wording of this subsection isn't quite accurate, but it does leave me, on first glance at it, to ask the same question that Mr Kwinter did. It's a legitimate question.
But more importantly, I get back to an issue that I've been harping away at in this committee for some time, and that is the issue of regulations. It seems to be a philosophy not only in the province of Ontario but the federal government and all the other provincial governments that we put legislation through first and then we prepare the regulations. In many of the jurisdictions in the United States, this is done at the same time so that the interest groups, such as the insurance companies, the legal people, all other interested partners, to use the new word of this government, interest groups or partners or stakeholders, whatever you want to call them, can have some sort of input.
There is no question, to take the example that Messrs Harnick and Kwinter have raised, that those two insurance companies are going to have a battle, particularly if you're talking about someone who's seriously injured and the liability issue could go on for some time. I, for one, and this is just one of many issues, would like to hear what the input of the interested parties is -- when I say interested parties, the insurance companies mainly, because they're going to be fighting this out. You're talking large amounts of money, and I honestly think that this section, of all sections, is most premature until we see the regulations.
Mr Tilson: Halpert -- I'll get it right yet; I'm sorry -- that they haven't even been written yet. So not only are we not in a position to vote on this section, because the wording of this subsection depends on the regulations, but we're not even in the position to consult with the insurance companies, the legal people and anyone else who's interested in these sections.
So I am suggesting to the parliamentary assistant that in order that we can answer some of the questions that have been raised by Messrs Harnick and Kwinter, who decides who pays -- that's another excellent question -- we aren't able to answer those questions.
The answer that's been given is that the regulations will answer those questions. That's the answer that has been given, and I find that -- and I don't mean this as a criticism of you; I find this is a criticism of the government, quite frankly -- totally unacceptable. We can't intelligently vote on this section until we see the relevant draft regulations that define what all of this business means, and I'm suggesting that this section be stood down until we find out, for example -- I would like to hear, unless they can make a suggestion now as to what the suggested procedure is, what the suggested arbitration process is -- to draft this subsection, whoever drafted it must have some vague idea as to what the procedure is and what the arbitration process is going to be.
In other words, how are we going to wade through the typical example that Mr Harnick has raised? How are we going to do that? They must have some vague idea. Otherwise, this subsection would never have been written.
I'm suggesting, Mr Chairman, through you to the parliamentary assistant, that until this information is made available, I believe we as a committee would be irresponsible in voting on this section until we at least have some framework as to what this subsection is suggesting.
Mr Owens: The issues that Messrs Harnick, Kwinter and Tilson raised are certainly interesting and could potentially happen. The clause is intended to ensure that the victim is paid. That's the intent of this clause. It sets up the vehicle for that process to take place through the regulations. In terms of how the chargeback will take place to the liable insurance company, that is an issue that is under discussion now with the industry through the regulations process. So I have to disagree that passing this clause is premature, and we certainly will need to have this clause to set up the process to facilitate whatever chargeback is and however it is worked through in the regulations. But as I say, this is simply the enabling language to ensure that the innocent accident victim is in fact paid, notwithstanding the discussions or the arguments that will take place between the two or three or however many insurance companies happen to be involved in a particular incident that takes place.
Mr Tilson: It sets up the principle that you're trying to solve. There's no question you could be critical that some of the existing systems we have under the OMPP or under the court system -- things are slow, although there are section E benefits --
We all understand the principle, what you're trying to do. We understand that. I think everyone understands that, but you say it sets up the vehicle. It doesn't set up the vehicle. There's no doubt in my mind that two insurance companies, or in some cases three or four insurance companies, depending on the factual situation that you could have, it could just be awful, the arbitration process, the procedure that you suggested.
You say this is under discussion with the insurance companies. I, for one, as a member of this committee, and I'm sure other members of this committee, am continually discussing this subject, the subject of Bill 164, with interest groups. We're now into clause-by-clause discussion and I can tell you that I doubt very much the rest of us have stopped talking with the various interest groups on this topic. Certainly, I as the critic, and I'm sure Mr Elston as the Liberal critic, can't believe that the members of the government have stopped talking.
I can tell you I haven't had an opportunity to review the discussions that the insurance companies apparently are having with the government on this whole topic. I would like, as a member of this committee, to hear what some of the thoughts are. Perhaps you can relay to the committee what some of the thoughts are that have come forward from the insurance companies as to recommended procedure.
Mr Owens: I find it passing strange, to say the least, to hear that this appears to be new information to the member. This is not brand-new, introduced by the government today. This motion has been out for at least --
Mr Owens: The issue that is under discussion here is the motion and Bill 164, and this section that we're debating has been out in public and available for consultation. I stand to be corrected, but it's our understanding that we have not received input from yourself on this particular issue.
Mr Tilson: Just so the parliamentary assistant isn't under a misapprehension, what I'm speaking of is that in the response to the questions raised by Messrs Harnick and Kwinter, it has now become apparent that the regulations have not been written, let alone discussed. You have now told this committee that you, or representatives from the ministry at least, are entering into discussions with the insurance industry, or representatives of the insurance industry, as to procedures, arbitration process, dealing with this specific section.
I'm quite aware of this topic. This topic was brought forward by members of the government, in particular by you, as to the need for innocent accident victims to get these immediate payments. I understand what your philosophy is.
What I don't understand is -- and I would hope that you would enlighten us -- what were some of the discussions that you have with the insurance representatives, the insurance industry, as to their comments as to the recommended procedure and recommended arbitration process that you're suggesting. Otherwise, the questions raised by Messrs Kwinter and Harnick remain unanswered.
Mr Kwinter: With all due respect, I just want to take exception to the definition of the purpose of this clause given by the parliamentary assistant. He said that the purpose of this clause, and it's quite simple, is to ensure that the victim is paid. I don't agree. Bill 164, in its broadest sense, is to make sure the victim is being paid, but this particular clause deals with a very specific point, and that point is, who is liable? It really is not "Pay the victim"; it is, "Who is liable?"
It says it governs the procedure for determining who is liable, and then it says that if there is a dispute about that liability and it has to go to arbitration, then this provision allows for that to happen, which then gets back to my original comment, which was that somewhere along the line there isn't clarity as to how you determine the interim payment pending the determination of liability. That is really the issue.
Mr Owens: Just before I turn the question over to Mr Halpert, I will respond to the member by saying that in fact the last part of 10.3, starting with "requiring," indicates that there's a requirement for an interim payment of benefits pending the determination of liability, and that's clearly directed at getting the accident victim paid. So your assertion that my interpretation of the clause is incorrect, I disagree with.
You're correct in terms of it involving an arbitration or dispute resolution process, but clearly the intent is to have the victim receive funds while this process is ongoing so that he or she is not left out in the cold for the period of time that the insurance companies argue with each other.
Mr Halpert: In the past, we've had examples where two companies have been fighting over this particular issue and neither one has paid, and that is the problem. This says: "We'll pay the person. We'll get that out of the way. Then we'll determine who should have paid, and then we'll figure out the accounting later."
Mr Kwinter: That's the point that we're trying to raise. Again, without trying to really belabour the point, there's no question that there should be an interim payment and that this provision, and I'm sure elsewhere in the act, provides for that. But the question really is liability. This issue deals with liability in saying that notwithstanding that there may be a dispute about the liability, the victim should be paid. I have no quarrel with that, but that is not what this is about. That's almost incidental, saying -- the basis for 10.3 is, what is the procedure for determining who is liable? That's what it's all about. They're saying, "What is the procedure for paying the victim?" They're saying: "What is the procedure for determining who is liable? And, incidentally, pay the victim while you're determining that, and then we'll sort it out afterwards."
My concern is that the representative of the Ontario Insurance Commission says, "The regulations are going to say `pay them,' and then we're going to work it out." I am saying, who is going to pay them? If there's only one insurance company involved, then it's quite obvious, you go to that one insurance company and say, "You may be disputing the quantum of your liability but pay it and we'll sort that out." Where I have a concern is where there may be two, three or half a dozen insurance companies and there may be some very, very strong feelings as to whether they have any liability at all and someone has to pay it. All I want to know is, how is that determined?
Mr Owens: It'll be determined through the regulation-making process. There's no misunderstanding about what your question is, and that's who's the first payor, who lays out the dough and then goes through the dispute resolution mechanism. You've very clear on that and we understand that question. What we're saying is that, in terms of this clause, it sets out that the victim needs to be paid and that in terms of how the regulations are being drafted, the first payor will be worked out, whether it's one, two, three or four insurance companies.
Mr Harnick: I think quite frankly you're all missing the point. If I can be so bold as to say what in all likelihood you're going to do, you're going to set up a fault chart, the same way you deal with property damage, and that fault chart will immediately determine who the payor should be. But, you see, the problem you run into, if you've ever done any of this work or if you've ever taken the time to speak to anyone who does any of this work on behalf of a victim who is waiting for payment, is quite simply that if you leave this process open-ended so that there's an arbitration process to ultimately determine which company becomes the ultimate payor, you're going to be in real trouble.
The trouble you're going to be in is quite simply that the arbitration process at the insurance commission is breaking down now. Everybody knows that under the OMPP, which is a far less complicated system than this system and brings far fewer cases to the arbitrator than this system will, it's taking upwards of nine months to get a date for an arbitration at the insurance commission now. The system, this brilliant Liberal system, is failing. It's failing, it's expensive and your system is going to be more expensive, it's going to put more pressure on the arbitration process and if we're waiting nine months now, we're going to be waiting 19 months by the time your system gets going, and once your system kicks in, we're going to be waiting 38 months to get an arbitration hearing.
Mr Harnick: It's going to be worse than the tort system. The other kicker is that I understand that Mr Laughren, the Treasurer, who has already bungled the books of the province, is now putting his finger into the insurance area because he in reality is the Minister of Financial Institutions. He's put his opinion on the line, and his opinion is that the insurance companies can come with insurance lawyers to the arbitration proceedings, but for the victims, the injured people, we're going to come up with some kind of comparable scheme to the worker adviser. We know how well the worker adviser works at the Worker's Compensation Board, when there's nobody on the other side in 99% of the cases. Let me tell you that when we get to the Ontario Insurance Commission, there will be an insurance lawyer on the other side.
If you think the workers' representative or the comparable individual who can't win before the Workers' Compensation Board now, when there's nobody on the other side, is going to go head to head with an experienced insurance lawyer and be successful, you're grossly mistaken. As the Treasurer has been wrong in his budget forecasts time after time after time, he's wrong now that he's sticking his nose into the Ontario Insurance Commission on behalf of innocent or, for that matter, liable victims who are injured in accidents.
But let me get to my point. Let's pretend that we do something as silly as setting up an arbitration procedure so that companies can resolve, over a period of time, who ultimately will be liable to pay. If we have that arbitration procedure, how does that impact on the victim of the accident? You'll say: "No problem. We've set up a scheme and he's going to get paid right off the bat, so he won't have a problem." Well, it's not that simple.
I know that none of you people has spoken to anybody who works in this field, so let me tell you what happens. As soon as the accident victim starts collecting his money, he's now going to have two or three or maybe four or maybe five insurance companies that might ultimately be liable to pick up the tab. These two, three, four or five insurance companies are going to get together and they're going to say: "How badly injured is this guy? Well, why don't we combine our resources?" This man or woman, this victim, might be off work for 52 weeks, maybe 104 weeks, and under the NDP scheme, he's going to be making $1,000, maybe $1,500 a week from the NDP government's accident benefit scheme.
They're going to say: "Boy, that can cost us $52,000 a year over two years. That's $104,000. So what we had better do" -- the two, three, four or five insurance companies that might ultimately be liable to pay while this guy is getting his money -- "we had better sit down and have a little meeting and say, `You know, we have a risk here. We have to reserve for $104,000. Maybe we have to reserve for $156,000, if he's going to be injured and off work for three years."'
They're going to have to set reserves and those companies are going to have to sit down and talk about it. Then they're going to say: "You know, one of us at the end is going to have to pay this. Why don't we all get together and get some surveillance on this guy."
Mr Harnick: "It's not going to cost us very much money. We'll each kick in $500, and for $2,000, we're going to do some pretty damn good surveillance on this guy and we're going to be able to prove that he's really dogging it and he should be back at work." That's the first thing that's going to happen.
The second thing that's going to happen is they're going to say, "We think we should have a defence medical." Insurance companies are very cute about defence medicals. They never call it a defence medical; they call it an independent medical examination.
So they call up the insured who's collecting his $1,500 a week and they say: "Look, we want to get you better so we're going to send you for an independent medical examination. On that examination, we're going to have a top doctor who's an associate professor of medicine at the University of Toronto or the University of Western Ontario and we're going to have him or her examine you and we're going to find out what's really wrong with you."
How many examinations are there going to be? If there are five companies that are potentially liable to pay, maybe they'll say, "We should each get an examination." So one company will send the injured victim off to Dr Freddie Langer. Another one will send the injured victim off to Dr Norton Lithwick. Another insurance company may send the victim off to the Canadian Trauma Consultants. Another one might say, "Seeing as you guys are doing all these orthopaedic and neurological examinations, maybe we better have a top physiatrist do it, so we're going to call Dr Arthur Ameis and we'll send this person to Dr Arthur Ameis."
Now he's going to go to five medical examinations, because you can't limit the opportunity of someone who might pay in the end to have a proper examination and investigation. You know what's going to happen? This innocent victim, who might have been rear-ended, is absolutely going to get destroyed, because while you're doing your arbitration process, deciding who's going to pay, four or five insurance companies might gang up on this person who's injured.
I see Ms Mathyssen looking at me, just shaking her head. I know she's going to be able to come up with a very realistic response to this to tell me I'm wrong, because she's spoken to all the people who are involved in this process and knows all about it.
But the fact is that while I am probably going to vote in favour of this section, because I believe that the person should get paid right away, if you set up an arbitration process that can permit five insurance companies to deal with this one victim --
Mr Harnick: Everybody thinks this is pretty funny when some man or woman who's injured and can't go to work is now going to have his benefits cut off. You people think this is funny. When I argued about this in terms of the third-party system that we've always operated under, you laughed at me. Now I'm talking about it in the context of your own no-fault scheme and you still laugh at me. I don't think you people have one --
Mr Harnick: Yes, I am taking it personally, because I happen to believe that accident victims need the proper advocate to protect them. You obviously don't believe that. When I saw the way you reacted to the way innocent accident victims should be treated, and now I see the way you're reacting towards the way accident victims under your no-fault scheme should be treated, I am firmly convinced that you as a government have absolutely no compassion for victims of circumstances that are not their fault. You have no compassion for the ability of someone to get back to work.
You think this is a big joke, and you think I'm sitting here doing nothing but trying to delay this bill. Quite the contrary, because I've gone to the insurance board with these people and I've seen what's happened. I've tried cases on behalf of accident victims and I see what happens to them. I see how badly they need an advocate and I see how badly they need legislation that can help them.
You've screwed them in the last piece of legislation -- that's the Liberal Bill 68 -- and I tell you that the NDP government is screwing them again under Bill 164. You think it's a big joke, do you? It's not a big joke if you're the accident victim and you're going to get shafted by insurance companies who are going to be using these regulations, as they should be, to try to avoid paying, because that's the name of the game. If you think that your brilliant scheme is changing the way history has been laid out for decades in this province, because you're going to call it "no-fault," I tell you, you're dead wrong.
I tell you something else: This bill, with all its open-endedness, is ill conceived. You don't know where you're going. How can you be asking us to vote on things before you even have the regulations drafted? You've never even discussed this with the people who act for the victims. How can you promote this stuff? It doesn't mean anything. Only half the equation is here. How can you vote on this? How are you going to be able to protect people if we as a committee can't see the other half of the equation?
You're going to say to the five companies that might be liable to pay, "We're going to set up an arbitration process." One of them, at the end, is going to get stuck for the bill of $156,000. You don't think they're going to do their damnedest -- there are five companies that might be stuck -- to try to avoid paying this person? You're creating this scheme that's permitting them to do that, because we haven't had an opportunity to look at the regulations.
I can't believe you're proceeding with this. It's hard to believe. And the reason is that, just the way you feel about innocent accident victims under the old scheme, you have disdain for accident victims under this scheme. I tell you, in the most obnoxious language I can muster, that this bill sucks just as much as Bill 68 sucks. I appreciate that's not parliamentary, but maybe it'll get your attention.
Mr Harnick: You can look it up in a dictionary, but it isn't complimentary, okay? If you need that much direction, I tell you it's not complimentary, because this bill is every bit as bad as Bill 68. What you're doing to people who are injured in accidents is unconscionable. How you can sit there and jabber away at me when you don't even make an attempt -- you people are so silent that your silence is deafening in terms of what you're doing to accident victims.
Mr Harnick: Well, the only people who are self-righteous around this place is the NDP government, which goes from one screw-up to another, and this is just another in a litany of those screw-ups. I don't know how you can proceed with this without even having the regulations drafted, how you can be making laws and creating these kinds of sections without even knowing where you're going. I think it's deplorable.
Mr Tilson: I had a question for the parliamentary assistant. Mr Harnick has now raised another issue that I think the committee should spend some time on. We have now described a situation where we're talking about the procedure for determining who is liable.
Mr Harnick has raised the situation of the innocent accident victim, the possibility that an innocent accident victim could and will, in not some but probably most situations, get involved in this whole process, the arbitration process, specifically on quantum. There could well be some specific debates as to quantum, exactly how much is to be paid. I say that because we don't know because the regulations aren't available, so I can only assume that possibility exists. Because that possibility does exist, the question Mr Harnick raised is, who is going to represent the innocent accident victim?
We know that Professor Arthurs is making a submission or making a paper that's going to make some recommendations to the government, and that information will be made available some time later in the summer, I believe. I add this to my question to the parliamentary assistant. I believe we're remiss on voting on this section at this time, the committee putting the question to vote on this particular subsection at this time because (1) the regulations haven't even been written and we really don't know what we're voting on, and (2), and more importantly, because the very people we're trying to protect, notwithstanding what Mr Kwinter had said -- and he's right; we're talking about who's liable -- the real person we're trying to protect is the innocent accident victim. Yet the innocent accident victim is going to be put into a dilemma because he or she will be perhaps not represented by anyone unless Mr Arthurs comes up with a situation.
When you take something out of the tort system -- normally in a tort system the innocent accident victims have in the past been able to retain the services through legal aid or on their own, depending on their financial capabilities, been able to retain a lawyer. We're not sure whether the innocent accident victims -- first of all, we don't know whether legal aid process is going to apply to this arbitration process. I don't know what discussions, if any, the government has had with the legal aid plan. We don't know any of those things. So this question is still up in the air.
In fact I'd like to share with the committee, Mr Chair, an answer to an order paper question that I made on the topic of who is going to represent the innocent accident victims, which I believe is another issue that has been raised by Mr Harnick in dealing with how are these people going to be dealt with with this particular procedure that we don't even know about.
"There is no advocate for the insured at the Ontario Insurance Commission similar to the position of the worker adviser at the Workers' Compensation Board. Based on the experience of the dispute resolutions group, which provides mediation and arbitration service to insureds who are unable to reach a settlement with their insurer, friends, family members" -- you can imagine, these people will be dealing against the high-priced legal talent of the insurance company who will be trying to downplay the quantum of the innocent accident victim -- "paralegals and lawyers typically act as advocates for accident victims. In addition, the training" --
So the Treasurer, who is in fact the real minister responsible for this, it eventually comes to light, acknowledges the issue that has been raised by Mr Harnick, that the innocent accident victim -- it's not going to be fair -- the innocent accident victim is not going to have proper representation.
"Consequently, case workers (ie, the intake staff who handles the initial contact made by the insured with the Ontario Insurance Commission) are familiar with the availability of local community services such as legal aid and social services that can assist the insured to negotiate on an informed basis."
Well, maybe, maybe not. I don't think that's been made clear yet. Mr Harnick, who may have more experience on this than I -- but I don't know whether legal aid covers this sort of thing, particularly --
Mr Tilson: "Similarly, mediators and arbitrators are trained and duty-bound to ensure that both insurer and insured clearly understand the dispute resolution process" -- well, maybe. We don't even know what the process is. It gets back to Mr Kwinter's question, "What in the heck's the process?" We don't know what the process is because the regulations haven't even been written.
"Similarly, mediators and arbitrators are trained and duty-bound to ensure that both insurer and insured clearly understand the dispute resolution process and the relevant provisions of law applicable to the specific situation under consideration."
Mr Tilson: -- the Ontario Insurance Commission, and with respect to this section, with respect to this unwritten arbitration process, unwritten procedure, unthought-of procedure, procedure that doesn't even exist, arbitration process that doesn't even exist or hasn't even been thought of, these people aren't properly represented.
The next statement is rather an astounding statement and I'm sure the legal profession may or may not make some comments. "While representation by lawyers does increase as the negotiation prolongs, it has little bearing on the outcome of the case." Rather an astounding statement for the Treasurer of Ontario to make.
"Professor Harry Arthurs of York University has recently been retained by the automobile insurance review (AIR) group to review the question of advocacy for the insured in the automobile insurance sector. His deliberations are expected by the end of the summer."
Mr Tilson: Mr Chair, I get back to my initial question, which was to the parliamentary assistant, that in light of all of the questions that are being raised, the question by Mr Harnick, Mr Kwinter, and the latest question is the issue that there's no doubt at this particular point in time and maybe not even at the end of the summer, depending on what Mr Arthurs says -- Professor Arthurs is only going to be making recommendations. We don't even know what they are.
We may submit, for example, that Mr Arthurs's recommendations are not appropriate. I know he's certainly a well-known and well-respected professor of law in this province, but the fact of the matter is we may not agree with him and the government may not agree with him. The issue remains that if this section, this procedure, which has yet to be written, is passed, it may be inappropriate in that the innocent accident victim remains unrepresented and will be simply mowed down by insurance companies which will have the financial resources to retain solicitors to take on the innocent accident victim.
So my question again to the parliamentary assistant is, would it not be appropriate to stand this matter down, at the very least see -- to use the words of either Kwinter or Harnick; I don't know which one -- the rest of the equation? We can't properly understand this section and vote on this section until we know exactly what this arbitration process -- or, if Mr Kwinter is right, processes -- are.
Mr Kwinter: I've been listening to the representatives of the third party and I have some sympathy with some of their concerns. One of the problems that we have as lawmakers is that we pass statutes, we pass laws and regulations that have an impact on the administration of justice in this province, and what we have here on the surface seems like an innocuous statement that there should be arbitration and there should be some payment prior to the determination of the liability.
But, really, once this is passed, it stands alone. We will move on as a committee to other issues and other people, but until this gets amended, which may be five or 10 years down the road, this is the document that judicial tribunals, lawyers, all people who have an interest in this issue, will refer to.
That of course is the essence of what our jurisprudence system is all about, and that's how lawyers make their money. They make their money by looking at these words that we approve and they decide what they mean. Two lawyers will always have differing opinions of what they mean, and as a result they then have to go to some adjudication to have someone decide, in their opinion, what they think it should mean, and they make a ruling. It's subject to appeal, but basically that's the way our system works.
I really have some concerns about something that is so basic. As in the words of the parliamentary assistant, this is really to ensure that victims are paid, and I agree that basically it's to make sure that victims are paid. But if a victim is going to be paid and if he's looking for the authority, he's certainly not going to look at subsection 12(4.1) of the bill to say, "Under this bill, it says I'm entitled to be paid." What people are going to look at in this particular section is, who's liable and how do you determine who's liable? Where is that liability? Again, without trying to minimize the importance of it, coincidentally there should be some payment to the victim pending the adjudication of that liability.
Because the regulations are so intrinsically tied to this determination of liability and because -- and I found it quite interesting to listen to Mr Tilson and his correspondence with the Treasurer, or the Minister of Finance -- there is a role for the victim, and whoever the advocate is for that victim to be present at this particular process, it would seem to me that it's almost impossible to just casually pass this particular subsection without having some determination as to what it is we're talking about.
Now, the representative of the insurance commission says: "Well, the regulations will set that out. Don't worry about it. Those regulations will be formed and they will deal with it." I understand that. It would seem to me that if we at least had a draft regulation that said, "Here's how this is going to work. This is how we're going to determine who is to make this interim payment if there's any kind of dispute. This is how we're going to deal with that dispute before we determine the determination of liability," then at least we would know what we're talking about.
What we're really doing now, almost in the interest of expedience, is saying: "You know, you've got to take some faith. You've got to understand that everybody in this thing means well and that somewhere along the line we will come up with regulations that will address this problem." The problem we have is that there is no provision for us to deal with the regulations.
The regulations -- and I'm not telling any tales out of school. I have no idea whether you even have a regulations committee any more in cabinet. I assume you do. But I used to chair the regulations committee. Members would come to that regulations committee and most of them had no idea what was being discussed, understandably, because there is a host of regulations dealing with every single ministry.
The ministry puts forward the regulations and a representative of the ministry will be there, will tell the intent of the regulation. It sounds good, there's nothing that seems to be untoward, and it gets passed. Then, you know, it's gone, and everybody has passed the regulation. If you were to canvass the members of the regulations committee and say, "Can you tell me what regulation you just passed?" they would only be able to tell it to you in a very broad sense. "We dealt with something with insurance. It seemed all right and we passed it."
When you have a subsection of a particular act that is so dependent on what that regulation is going to be, that regulation isn't just incidental, as to say, "Well, this is the date, this is the statute of limitations, this is how this thing is going to work." Then you say: "Oh, well, that's fine. Leave that to the regulations committee to sort of put the mechanism in place."
But when you're saying, "Yes, we understand that there are some areas of concern, we understand that there are some grey areas, we understand that there's going to have to be a determination of liability on an interim basis before we go to the arbitration, which means we may have to have an arbitration prior to the arbitration, we understand all that, but don't worry about it; the regulations will address it," what is really happening is, that regulation is not just enabling wordage that is going to give effect to this particular subsection; that regulation is really going to be the guts of what this subsection is because it's going to stipulate how this thing is going to work. The subsection doesn't say that; it just says it shall happen. But how it happens is going to be determined by the regulation and that regulation is going to have a very, very serious impact on how this thing is determined.
For example, in the case that was mentioned by Mr Harnick where you could have five insurance companies involved in a possible dispute, if for some reason one or more of those insurance companies feel that they don't even want to participate in this interim basis because in their opinion they have no liability and they have already determined that, that may be totally inappropriate because the feeling is that if somewhere along the line you have signed on and you have some potential liability, then you are a party to this action. I don't think there's any doubt that being a party to the action can be shown, but whether or not they are in a position or are willing to provide interim funding is going to have to be pre-determined. There's going to have to be some way of saying, "Notwithstanding your particular feelings on this subject, if you are a potential party to this action, then you are also a mandatory participant in any interim payments, subject to rebate or adjustment pending the final arbitration."
But I think there should be some indication of how that's going to work, because otherwise we may be passing a subsection that is either unworkable or unacceptable. I can tell you that just because we pass a particular piece of legislation, if it's unacceptable and if it is challenged, we may have as many problems as we think we've resolved. I am not suggesting that every bill have every single detail in it and that every particular eventuality be covered in the bill, and I think it's appropriate that this be fleshed out in the regulations, but it would seem to me that there should be some indication as to what the broad strokes -- how this thing is going to work are laid out.
This governs the procedure for determining who is liable, it governs the regulations requiring the interim payment, so there should be some basis so that at least there is a reference point, so that when you look at the bill, you say this is what it states, "That all parties that are liable for this particular obligation shall be or must or will be responsible, on whatever basis, for participating in this interim payment." Then at least you know that if you have any potential for being liable in this particular action, you are also liable for the interim payment which will be adjudicated in the arbitration and then adjusted according to the findings of that arbitration.
I think that is really important because again, without trying to give the impression that this is just nitpicking a particular part of this bill, I think it's critical because this really goes to the essence of an important portion of what this bill is all about.
As I said earlier, the basis of this Bill 164 is to provide compensation to victims via the Insurance Act for accidents or injury or harm caused as a result of automobile mishaps. There's no question that that is the basis of it. But in any kind of process of this kind, on the one hand, you have to have payment; on the other hand, who is going to pay it? That's really what we're talking about. Those are the two basic elements; all the rest is commentary.
The thing is, how do we establish who is entitled? How do we establish who is going to pay it? Mr Harnick talked about the equation. This goes to the heart of the equation. On the one side, who is the victim? Who should be compensated? And then, who should be liable?
This is the procedure for determining who is liable. If you can't determine it obviously, then there's a process for arbitration, and then there's also the provision that, pending the outcome of the arbitration, there is an interim payment.
I go back to my very first comment. Somewhere along the line, someone is going to have to determine who makes that interim payment. A representative of the Insurance Commission is saying: "That will be in the regulation. Don't worry about it. We'll work it out." But again I say, that is a very, very basic concept, because the regulation is obligating people where I think the act should be obligating people. Once you set out and catch all of the potential obligatees, then you can have the regulations spell out how this is to be determined. But right now, all you're doing is saying, "where it requires the interim payment of benefits pending the determination of liability," without capturing all of the potential parties to this liability.
It would seem to me a fairly easy drafting procedure to spell out that all parties or all potential parties to this obligation, as defined in the Insurance Act -- you can't be liable if you're not in the insurance business. You can't suddenly say to some person who has nothing to do with this, "Everybody is potentially liable." Obviously, the only people who are going to be liable are people who are an insurer of this vehicle that is involved or the victim who is injured. But there has to be, in my opinion, some determination up front that these are the people who are potentially liable, and if you are potentially liable, then you're also obligated to participate in this interim payment subject to arbitration and subject to a final determination of the liability, and adjustments will be made at that time.
I really think that it goes to the heart of what we're talking about. And again, I know it sounds like it's nitpicking, but the legal profession is all about nitpicking. I mean, that's what they do. That's their business. They're nitpickers. And as a result, when you look at a clause and you read it, you can't say, "Well, this is what it was supposed to be," or, "This is what it was meant to be," because a judge or an adjudication panel can only interpret the words that are there. And if a very, very bright and astute lawyer can appear before that panel and can make a case as to what any reasonable person could assume that those words would mean, then you have a problem.
The thrust of what we should be doing -- without, as I say, getting into such minutiae that every possible, conceivable eventuality is outlined in the bill, is included, which is not practical -- is that there should at least be a basic outline of what it is that we're trying to do.
I feel strongly that this particular subsection, (4.1), 121(1) of 10.3, deals basically with liability: Who is liable and how do we determine that? But it also provides a provision that there be interim payment. So you have two things to determine: You've got to determine who's liable -- there's a provision for doing that; you have an arbitration process, and that happens -- but it also says that in the interim there shall be payment. But you don't say how that happens. All you're saying is that there should be payment.
It would be great if the government said, "What we're going to do is we're going to set up a fund, and with that fund we will make any interim payments pending the determination of the final liability." Then you have no problem. You'll have a problem with the Treasurer and you'll have a problem with a lot of other people, but you will have no problem with this particular section.
But you're not doing that. You're saying, "...the regulations and requiring the interim payment of benefits pending the determination of..." So somewhere along the line, someone is going to have to arbitrarily say: "We haven't determined who is liable, but it doesn't matter; you're going to have to pay. We'll sort it out later, but right now you're going to have to pay."
That is where we have the problem, because that person or company or whatever is being designated as, "You're going to have to pay pending the liability." If their interpretation of their liability is that they have none, they're going to say: "Take a hike. We're not paying anything. If you want to pay, you pay, but we're not paying because we don't see any liability."
That gets me back to the suggestion that I made. I think it could be resolved and we could circumvent any potential problem by suggesting that any insurance company of record that has a potential liability shall be obligated to participate in the interim payment pending the outcome of final arbitration. At that point, adjustments will be made either by paying the whole amount or by getting a reimbursement for the amounts that were put forward.
I know I've gone on at length, but I feel strongly about it, because I think this is really at the essence of this bill. It is one of the key elements of this equation, one being paying the victim, and two, assessing liability. Unless we more clearly define the parties to the liability, and I think it can be done, I think we're going to have a problem. I think we're setting up an unnecessary problem that can be rectified. It can be rectified with some relative ease and I think that we would be doing the victims a service.
Let there be no mistake: I am not trying to particularly be vindictive against insurance companies. I'm not trying to make this tough on the insurance companies. I'm trying to ease the problem for the victim so that anybody who has a potential liability will be required to participate in the interim payment, with the understanding that once the arbitration is completed, the final adjustment will be made. I'd be interested in hearing the comments of the parliamentary assistant.
Mr Owens: I think, if I'm understanding you clearly, that we're not in dispute with respect to potential difficulties that may evolve out of one, two, three or four insurance companies being involved in an incident. I think our dispute, our disagreement, more particularly, is a placement of where the mechanism to work out that dispute should be placed. It's your view that it should be in as part of the bill.
It's our contention that the clause under (4.1) is that it sets out as a mechanism a method to order payment to an accident victim. Through the regulation-making process -- during your comments I heard some good suggestions around what might form part of the regulations with respect to who pays and setting out who participates.
As I say, I think we agree that there is a potential for problems. Our disagreement is where we solve that. It's our contention that we can solve it through the regulations and that this clause sets out -- and we both agree that the victim should be paid notwithstanding the kind of disagreements that may take place between the insurance companies.
You referenced comments from the members of the third party. I'm not sure whether you agreed wholeheartedly with all the comments that were made, but the member for Willowdale set out situations where there may be one or more insurance companies and the kinds of hoops that these companies may force the victims to jump through.
It's our contention that this is in fact happening at this point and that insurance companies, as their first order of business, will want to limit their liabilities in terms of payments and that they will do what they have to do to achieve that. In terms of this clause all of a sudden bringing a whole new level of espionage, as the member was characterizing it, and multiple medical opinions, we don't see that as being close to reality.
Again, with respect to your comments, Mr Kwinter, we will certainly take under advisement your suggestions, which I think are reasonable suggestions, that they should form part of the regulations. We will certainly work those through.
Mr Kwinter: The point I want to make is that I am not associating myself in any way with the comments made by the members of the third party as to the espionage and things of that kind. What I am concerned about is that the provisos of this particular section are to provide for an interim payment pending the determination of liability. I just want to make sure there is some way that this interim payment can be made. If we have a dispute about who is even going to pay the interim payment, you may be doing the victim a disservice, because even though there is the provision that there be an interim payment, because you're depending on third parties to make that interim payment, there should be some basic ground rule as to who has to pay this up front. That is the basis of my concern. I understand the vote is being called and we can come back to this.
The Chair: I call the committee to order. Just prior to our recess we were dealing with subsection 12(4.1) of the bill. I believe that we had exhausted the debate at that point in time. Unless there is further debate, I would call the question.
I think, again, we were not disagreeing on the issues in terms of potential complications with respect to insurance companies having disagreement over who should be the first payer in incidents, especially where there are multiple companies involved. But it's our view that the regulation is better equipped to deal with that argument and it's the view of the clause and of the government that, while this discussion is going on, in fact the victim should be paid and that actions that go on between the insurance companies with respect to who would be back-charged at the end of the day, when liability is determined, should not affect the payment to the victim.
Mr Kwinter: If I could just refresh the parliamentary assistant's memory on the point I was making, my concern is not who should be the first payer and my concern is not with the fact that the victim should get an interim payment while the arbitration is taking place on the apportionment of liability. My concern is -- and it really is for the victim -- that as a result of this provision and as a result of this section, it requires an interim payment of benefits pending the determination of liability. I feel that this particular subsection does not adequately set out who should be making that interim payment.
I was asking if a statement could be incorporated which would say that all insurance companies that have any possible exposure to the liability shall participate in the interim payment to the victim and that after a suitable arbitration adjudication the payments would be adjusted, depending on the determination of liability. That was may concern.
The response that I got was that this would be looked after in the regulations. My concern is, because this is such an integral part and goes to the heart of what Bill 164 is about, that rather than leave it in the language of the regulations, a simple statement incorporated into the act that all insurance companies that have any possible liability shall participate in the interim payment subject to an adjudication under arbitration, with the suitable adjustments taking place after that arbitration. That was really what I was looking for as far as a response from the parliamentary assistant as to what he felt about that particular proposal.
Mr Owens: I think that at the end of the day we're still down to the question about who will be the first payor and that even requiring that all insurance companies participate in the payment -- and I understand this is your suggestion -- and in terms of working out the formula, if we were to accept that, that would be something that we would have to look at.
But the first thought that comes to mind in that scenario is: How would you apportion the payment out if there were two or three or more companies, and again, who would ultimately cut the cheque? It's not that I don't recognize your point. My concern is, however, that by placing this type of statement -- notwithstanding some of the more pragmatic issues with respect to process that would ensue with language like that in the legislation, addressing the process where one or more insurance companies would participate is clearly a better place to do that.
Mr Kwinter: Mr Chairman, if I could respond. The parliamentary assistant has just reiterated the crux of the problem. He said: "How would you determine who's going to pay? How would that be determined?" That is exactly my concern. He said, "How do you determine that?" What I had said earlier and what I had said this morning is that you might have to have an arbitration to decide how to pay the interim payment before you do the arbitration to determine how you do the final payment.
The other concern that I have is that you refer to the first payor. How do you determine who the first payor is if there is some dispute? As I had said earlier this morning, if it is cut and dried and if there is one insurance company and they are absolutely the only possible insurance company that has a liability and the only question is what the quantum is which will be determined by arbitration, no problem.
The concern that I have is that if there are a number of insurance companies that are potentially liable -- not necessarily liable but potentially liable -- and they're all named by some aggressive lawyer who takes a look at all of the possibilities -- and those of you who have had any experience in the law will know that when a lawsuit is launched a lawyer who is diligent will sue everybody who could possibly be a party to the action, hoping that somewhere along the line he's going to get somebody who's going to have to pay. The point that I'm making is that without some direction in the act -- and when you have a decision that an interim payment has to be made and there are several potential parties at risk but many of them who may feel that this is an absolutely frivolous action, that they have been caught in the net just to make sure that somebody eventually gets caught, and they decide that this action is so frivolous that they're not going to participate, they're going to challenge you and they're going to do all sorts of things because they feel that they've only been included because the lawyer involved has decided he's going to cast as broad a net as possible. That is where the concern is.
When you say, "the first payor," how do you establish who the first payor is? I mean, do you put their names in a hat and say, "Sorry, you're the guy who's going to pay and then we'll sort it out later"? That is exactly my concern, that if a statement were included that provided that all possible insurance companies to this liability shall participate in the interim payment, subject to an adjustment after the final arbitration, and to just say, "Well, the regulations will say there's going to be a first payor and after the arbitration we'll resolve it," that is where I have my concern. How do you establish who that first payor is, how do you establish who the other responsible parties are and how do you apportion this liability?
Mr Owens: As I indicated, I'm validating your concerns and indicating to you that the regulation-making process is ongoing and will seek to answer those questions. We're not suggesting that those are not questions in our minds as well and, in terms of the process, yet to be established.
I think the issue that an insurance company would be more particularly concerned about would not be the payment of the claim or the dollar amount; it would be who is liable, who is at fault, who shares responsibility for the accident, for the incident that's taken place.
Again, we seem to be going around and around. I'm agreeing with you in terms of your concerns, and they're quite valid. Again, we disagree on how and where they should be addressed. I'm suggesting to you that in terms of the process they will be addressed through the regulation-making process and the consultation that's ongoing. The clause simply directs that, notwithstanding a dispute that may be between two insurers, in fact the victim will be paid, and then the process will flow as to how the recovery of that payment is made.
Mr Kwinter: I really apologize to the members of the committee for prolonging this, but I really feel very strongly about this. What we have is the parliamentary assistant saying one thing but then saying something else.
To give you an example, he says, "The insurance companies really don't care about the money and what the actual dollar amount is; what they're really concerned about is the responsibility." Well, caring about the responsibility has only one reason, and that's, "How much money is it going to cost me?" It's not going to make any difference if I say to the insurance company, "You're responsible but you don't have to pay any money." If you are responsible, then you're going to have to pay some sort of settlement.
Mr Owens: That's right, but at the end of the day, it's where the liability lies. I'm not saying that they're unconcerned about dollars. In terms of how we, again, see this process, it's our view that no matter what background action is taking place between insurance companies, the victim needs to be paid. I disagree that I'm saying two different things. My points have been consistent throughout the discussion of this clause.
Mr Kwinter: I don't want to go back to things I talked about this morning. If the government had a fund comparable to what used to be, in effect, the unsatisfied judgement fund, where those people who did not have insurance -- there would be a fund that would pay the victims. Then you'd have to pay a substantially higher licence fee because you didn't have insurance. There was a fund administered by the government so that, in effect, in the adjudication of who was to share the responsibility -- talking about the insurance companies -- this fund would be activated and that money would be paid to them.
Mr Kwinter: What I'm saying is that under the provisions of Bill 164, there is not going to be such a fund. What is going to happen is that someone is going to have to make this interim payment and that interim payment is only going to be made by an insurance company. It's not going to be made by anyone else other than an insurance company. Insurers are going to sit down with the director of the insurance bureau and say, "Okay, you're going to have to pay this interim payment subject to a final arbitration."
Mr Kwinter: If I could just continue before Mr Halpert speaks, the point is that when you say the main concern is to get some money to this victim -- and I agree; I'm not arguing that; I'm not defending any particular point of view other than the fact that somebody's going to have to make that payment. Someone is going to have to say: "Yes, here's a cheque to that victim. Let's have some arbitration and decide whether or not we are really liable."
You're saying that the first company -- or whatever you want to call it -- is going to make that payment. I say there's no problem if there's only one company involved. But if there are five companies, and they each deny liability but are only in there because they have been named, how do you determine which of those five are going to make that payment?
As I say, you could either throw darts or have a draw or someone is going to arbitrarily say, "In our opinion, you are the guy who has the greatest chance of being liable." The minute you say that, you leave yourself wide open to someone saying: "We don't agree. You are predetermining this case. You're saying we are liable when we don't feel we are liable." You then have a problem.
All I am saying is that if you leave it to the regulations, you're just going to compound some problems because regulations can be changed literally at a whim, whereas if you put it into the act, the only way you can change the act is by amending it. All I am proposing is that there be a provision that all parties -- and by "parties" I'm talking about the insurance companies, not the victim -- that have a potential liability shall share in the interim payment, subject to a final adjudication and an arbitration. That is really the point I'm making.
When I say you're talking in contradictory terms, you're saying the insurance companies don't really care about the money, that all they care about is the liability. I'm saying to you that the only reason they care about the liability is because the liability reflects in dollars. If there's no liability, there's no money. If there is liability, it's going to cost them money. They are not there just for the exercise to say, "Maybe we're liable, maybe we're not." They're there because if they are liable, it's going to cost them money.
They're absolutely concerned with both the liability and the money, because those are indivisible. The liability represents money. If there's no liability, there's no money. The point is that somewhere along the line you've got a provision for an interim payment, but you have no apparatus of where that money's coming from. You're just saying, "Okay, we're going to pay an interim payment," but who's going to pay it? You're saying the first insurance company's going to pay it, and I'm saying, how do you determine who's the first insurance company? You're saying the regulation will do that.
I'm saying the regulation is going to have a tough time determining that unless you make a provision that it really isn't necessary to determine that at that stage because it's an interim payment and these people are in business and it's the cost of doing business in the insurance business. As long as there are multiple potential liabilities, then those parties should know in the act that they have an obligation to share in the interim payment, knowing that after the final adjudication through arbitration, there will be a proper allocation of liability. That is really the point that I'm making.
Mr Owens: I'm pleased that you're able to give both sides of the argument because it certainly saves time. I'm in the position again of saying that in terms of your questions, you're dead on, but again, we're at variance on where this resolution should come.
Our view, again, is that the answer will be found in the regulations, that regulations are not made up or authored in a vacuum, without consultation, and that in terms of how insurance agents, insurance companies, will want to be able to deal with these disputes, they'll want to have an orderly and relatively simple process as to who is the payor.
In a sense you're saying that there is an absence at this point of a process to determine who the first payor is. I agree with you, and again we differ on where that resolution should come. It's our view that this resolution should be found in the regulations.
Mr Tilson: Several weeks ago, a number of weeks ago I had asked a question in the House to the minister as to when we could expect the draft regulations to be introduced or made available for consideration, not only with this committee but with the various interest groups. His answer was -- I think the words were "several weeks." Several weeks have now gone by.
The Chair: I just want to bring to your attention that the purpose we're here for is to go through clause-by-clause of Bill 164 and not deal with regulations. I know I've said that before. I just wanted to remind you.
Mr Tilson: Mr Chairman, your predecessor said the same thing. The difficulty is that when we're dealing with issues such as this, almost to a letter, the answer's coming back, "Oh, that will be dealt with in the regulations."
The whole premise of no-fault auto insurance benefit packaging is dealt on the principle of regulations. To properly understand the whole process of where we're going and all of the questions that are being asked -- what procedure? What's the arbitration procedure? How are you going to determine liability? -- all of these things are all spelled out in the regulations. Because of that, because of those answers that have been given and because I think it would be totally irresponsible for this committee to vote on this section -- I might even be prepared to support this section if I knew what it meant. I defy anyone to tell us what it means when we know perfectly well that we can't tell what it means until we've seen the regulations.
Mr Tilson: No. I'm trying to be as reasonable as I usually am, Mr Owens, and I'm simply saying that the staff have now said that a lot of the answers to the questions that we have been giving will be put forward in the regulations, and yet the regulations haven't been written. So my question again is, to the parliamentary assistant, can you enlighten the committee as to when these regulations will be made available?
Mr Owens: -- too lengthy in nature. So we are now taking a look at the regulations again to provide some clarity, in consultation with the industry, in consultation with legal practitioners and in consultation with consumer groups.
In terms of some of the issues that Mr Tilson and his colleague have raised and in terms of meetings that have taken place between Mr Harnick and the minister -- and I presume that you've been at least one of these meetings --
Mr Tilson: The reason why it wasn't fruitful? Because the minister had indicated to me that he was prepared to consider the whole philosophy of the test, that the deductible test may not be appropriate. You will recall, I think, at one of our last meetings I indicated that the minister was musing -- and I agree the word was "musing" -- over the possibility of changing the deductible test to a form of verbal threshold test. It was that reason Mr Harnick asked the question this morning.
I quite frankly don't know why we're continuing on at this stage. Number one, we don't have the regulations. The minister is contemplating, or has been contemplating, the possibility of changing the deductible test to a verbal threshold test. Number three, we have Professor Arthurs coming forward with some sort of advocacy for the innocent accident victims at the end of this summer, and finally at the end of this summer, we're going to have the Court of Appeal ruling on three decisions dealing with the Ontario motorist protection plan, which you might even find palatable. The decision of the Court of Appeal determining what the test is, even you might find that palatable.
I guess that for every one of the questions that we're asking, you can't give the answer. You can't give the answer to any of the questions that have been asked today because the draft regulations aren't even written.
Mr Owens: Quite the contrary, I think I've answered very effectively every question that's been posed here today. In terms of the questions that were asked this morning with respect to a new amendment, we clearly indicated that this was an amendment that came out of meetings between Mr Harnick and the minister. I think that's been a demonstration that in fact we are listening to members of the opposition and members of consumer groups and the insurance industry and that we're quite prepared, when demonstrated a better way, to take that better way.
But in terms of why we are here, there are a number of sections that are quite important. Yes, the regulation-making process is still ongoing. We're still prepared to take input from yourself and your colleague from Willowdale, who, I'm to understand, is still continuing to want to meet with the minister to address some of his concerns and the concerns of his colleagues in the personal injury bar, and the minister is quite prepared to address those concerns.
Mr Tilson: The question that still remains is that we don't know what "procedure" means, we don't know what the "determination of liability" means, we don't know what the "arbitration process" means, we don't know how we arrive at the arbitration process. According to ministry staff, all the answers to those questions will be given in the regulations. I will say to you that I really think it's premature to proceed with this section at this time when that information is not available.
Yes, there was a considerable amount of criticism throughout the public hearings. Delegation after delegation came forward and spoke on the subject of the draft regulations. No one, literally no one, was able to explain to the committee what the regulations meant, what the draft regulations meant. People who were most competent in the area of insurance law, whether it be lawyers or insurance experts, came to this committee and said that they had studied the regulations and couldn't understand them.
To give you credit, you've indicated that you're not proceeding with those draft regulations, although, oddly enough, most of your bill seems to be based on those regulations which you've now discarded. You know the bill can't work. You can't properly explain the bill without regulations. There's no way you can explain to members in the insurance industry, the legal profession, the medical profession, members of the public, what in the world you're talking about unless you have some structure of the regulatory process available.
You don't have that available, so it makes it almost impossible for you and members of the ministry staff to come to this committee and explain to members of this committee and others what in the world you mean. You say you've answered the questions. Mr Owens, with due respect, I don't know what the procedure is that's referred to in the first line. I don't know how we determine the very last question Mr Kwinter asked. I don't know how the determination of liability is going to be done. I don't know what the arbitration process is. The vagueness of this section -- yes, you've gone over what it's trying to do, but until we have those regulations we simply cannot proceed. I ask you again to consider standing this section down until the regulations are made available.
Mr Owens: I think the direction of the clauses is quite specific. You, like Mr Kwinter, have raised some valid questions with respect to liability and who will be the payor etc, but again we disagree as to where that information on that process should be held. It's our view that the regulation should hold that information on that process.
Mr Tilson: Mr Owens, for us to properly vote on this section, I want to make sure I thoroughly understand it. With due respect, I think you're going to have a great deal of trouble explaining this section to the committee and members of the public until those regulations are made available. For example, I ask you or members of the staff what you anticipate by the statutory accident benefits under section 268?
Mr Owens: Absolutely. First of all, they'll be indexed. We're looking at 90% of net as opposed to 60% of gross. We are looking at increasing the funeral benefits. We are looking at the provision of care giver benefits.
Mr Tilson: I want to see what in the world is anticipated under the statutory accident benefits under section 268, how the proposed law is going to change the existing law. I'd like to know what that means.
Mr Tilson: The purpose of this whole process is to provide a system to replace the subject of economic loss, and I, as are other members of this committee, am entitled to know what the government is anticipating to do, what benefits it's going to replace economic loss with. I would like some details of the statutory accident benefits, what you're anticipating to provide.
The Chair: Mr Tilson and indeed all members of the committee, the business of this committee is to deal with Bill 164 clause-by-clause. I suspect that from time to time, as already indicated, members will have concerns with particular sections of the bill, as has been mentioned by members of the Liberal Party and the PC Party, because there are no regulations that give more information to deal with their concerns, that indeed the parliamentary assistant has not brought forward some of those amendments that otherwise he would have. I think it's clear that as we go through the bill, section by section, you indeed will have an opportunity to raise those concerns.
I suspect there are some sections of the bill that won't offer the kinds of concerns that are being suggested in this particular section right now, so if we would deal with this subsection 12(4.1) and make some determination. You've offered some concerns, absolutely, and the parliamentary assistant has responded. We can either vote on this or we can step this one down or we can debate it further. That's where we're at.
Mr Tilson: And I respect you for that, but I am submitting that in the form of debate which I appear to be in with the parliamentary assistant, it is literally impossible to understand, to comprehend this section without the regulations. The answer to almost every question that has been given today, this morning and this afternoon, is, "Those answers will be given when the regulations are prepared."
We're asked to vote on a section which depends on those regulations. This section cannot be fully understood without the regulations -- that's a fact -- mainly because the staff of the ministry responsible for auto insurance -- whatever the ministry is called -- tells us that those answers will be given when the regulations are prepared.
The Chair: -- and if at that point, in a particular clause, you feel that the regulations are necessary in order for you to understand better that section or whatever, then make that point. That's certainly your right.
The Chair: But that doesn't mean that absolutely -- I wouldn't want to suggest at this point; we haven't gone through the whole bill clause by clause -- absolutely every part of the bill needs to be substantiated with the regulations. So we're dealing with subsection 12(4.1) at this point.
Mr Tilson: I quite agree with what you're saying, that there are some sections that may not be dependent upon the regulations. But this section certainly does, mainly because of the answers that have been given by the staff to the various questions we've put forward.
For example, the next line says, "Including requiring insurers to resolve disputes about liability." That is one of the issues that will come forward in the regulations. Can you tell us what other issues will come forward in the regulations aside from that?
Mr Owens: I think one of the problems -- and I believe you are a lawyer -- in terms of reading things in isolation is that they certainly lose the intent and the context they were intended to capture.
With the patience of the Chair, of course, I'd like to respond to Mr Tilson's queries with respect to the line around statutory accident benefits. I ask the member to turn to section 25 of the bill. I certainly would have hoped that after three weeks of public hearings and close to three weeks of clause-by-clause he would have at least got his reading up to section 25, where the benefits are laid out.
Mr Tilson: Mr Chairman, on a point of privilege: I have been at every meeting of this committee that the parliamentary assistant has been, and I have understood as much, if not more, than he has. I resent his innuendos.
Mr Owens: Yes, I absolutely agree. The member from Dufferin-Peel has been at each and every meeting, and I certainly wouldn't want to imply that he hasn't. My concern is that the member was asking which statutory accident benefits were going to be discussed in the regulation, and I simply pointed out to the member that in section 25, on page 20 of the legislation, these benefits are delineated.
In terms of his question, reading a couple of words in isolation of the clause removes it from its context and intent. The intent of the clause, as we've discussed earlier -- and I am concerned, because we agree that there are issues around who will pay and what one does when there is more than one insurance company involved. We agree that those are issues that need to be decided.
We are back at what seems to be the age-old question on this clause: Where does that process and mechanism take place? It's the view of the opposition that in fact it should be referenced in the legislation. It's the view of the government that it should be referenced in regulation, that that process is best laid out through the process of regulation.
Mr Tilson: The concern that I and other members of the committee have is that obviously it's anticipated that there will be a great deal of litigation in this new field, and ironically, the whole purpose of a no-fault bill is to avoid the litigation that's gone on in the tort system. That's been made clear. The minister has stood up many times -- when I say the minister, I mean Mr Charlton -- and has said the tort system is too bogged down with litigation and that this whole process will provide instant relief to the innocent accident victim.
Yet we now see a whole new form of litigation being created, and I, members of this committee, the insurance profession, the legal profession, the medical profession, the innocent accident victims in all of those various groups that have made presentations to our committee, are entitled to know the new form of litigation that's being anticipated. We're entitled to know what procedure is being anticipated by the government.
The government has boasted that it's going to cut short a lot of the legal processes that have taken place in the tort system. They've boasted about that, and yet today, when we're trying to find out what various procedures are, to use the words of the last question I asked, "including requiring insurers to resolve disputes about liability through an arbitration process," the government parliamentary assistant is unable to tell us that, other than to say it's coming forward in regulation.
I think it's perfectly in order to say that if you're not able to tell us what these processes are -- you've boasted that the whole process is going to be cut short, that they're going to get instant relief. How are they going to get instant relief? If you can't tell me how they're going to get instant relief, then I think the members of this committee would be totally irresponsible to vote for this section, because you have no idea how that process is going to resolve what you say is a very complicated existing procedure.
Mr Owens: We're again in the odd position, Chair -- without wanting to be repetitious, because it's my understanding that it's a violation of the standing orders to be repetitious, I will tell the member one more time that I agree with his concerns in terms of the innocent accident victims. If the member needs to be reminded one more time, we are in the process of developing the regulation in consultation, not in a vacuum, with the members of the personal injury bar and other stakeholders in this process, the insurance companies, and that in terms of them needing to see the process, I can't agree with you more. They are certainly involved and these communities have been involved from the time of the release of the first draft, and we have taken their concerns into consideration. We've released draft 2.
After the three weeks of public hearings and further consultations with ministry staff, with the minister personally, we are now working on a further clarification. So, again, at the risk of being repetitious, I agree that the member raises good questions, but again, we're back to where these concerns should be addressed. The opposition members feel that it should be addressed in the legislation. However, it's the view of the government that this process will be well taken care of through the process of regulation.
Mr Sutherland: Mr Chair, I haven't been in all the committee hearings, but I believe we spent a good portion of an hour this morning on this amendment and we've spent approximately 45 minutes now. I've certainly heard a lot of the same questions asked and Mr Owens has provided the same answer on a regular basis, acknowledging the concern. But there seems to be just a point of disagreement on how this should be resolved, whether it should be done through the actual legislation or regulation.
It would seem to me that there are a lot of other amendments in this piece of legislation that are going to require a great deal of analysis -- and time as well. So I would certainly hope that at some point we could discuss some of these other amendments here because I'm sure people are interested in them and would like to have some discussion about them, as well.
Mr Tilson: Mr Chairman, just to respond to Mr Sutherland's comments, the question that we're asking is not -- you've raised the issue, should it be in the legislation or should it be in the regulations. We're asking a series of questions on this proposed amendment and the answers that have been given to every last one of those questions is, "It's going to be in the regulations."
If you know what those regulations are today, you may not vote for this amendment. In other words, if you don't know what the procedure is, or let's put it the other way, if you knew what the procedure is, you may find that this procedure is just as cumbersome, just as legally complicated as the tort system, and you might say: "Sorry, I don't like that. I don't like what you're proposing. Go back to the drawing board and start all over again." Mr Kwinter may be right -- we may be talking two different types of procedures -- but we don't know whether it's one or two procedures, but if you knew what those were, then you might not be prepared to support this amendment.
Mr Jim Wiseman (Durham West): On a point of order, Mr Chairman: I find it rather interesting that it's June 3 and, yet, as Yogi Berra would say, "It's déjà vu all over again." We've gone around this discussion about four or five other times and I believe the Chair has ruled in the past that continuous repetition, according to our standing orders, is out of order and that we should be moving on. I would like to invoke our standing orders and say that maybe we should be moving on. We've been around this issue many, many, many times and repetition is certainly not allowed or acceptable within our standing orders.
The Chair: Thank you, Mr Wiseman. Indeed, that's a point of order. Being a fair and unarbitrary and objective Chair, I want to make sure that we have just the right amount of debate on these sections.
Mr Klopp: I hear from colleagues across the floor that we all agree that we want to get people paid right away who are accident victims, and that's what this allows to be done. Part of the section allows it to be done. It also recognizes that they have to get on with getting the insurance companies to a table to finally admit who the person was who was at fault, through their driver or whatever happened.
With regard to the regulations, if we had the regulation in front of me today, I'm sure I know what I would do if I had my concerns. I could probably say, "Well, this is only a draft regulation, and the minister could change it by the time it's next week, so how can I really compare what this regulation is anyway?" That's another side of an argument.
But we agree that in an act you need to have the door open, so this amendment to this act, from what I understand, allows the process to be put in place, albeit through regulation. There's a general argument that can be made, "Well, it should be in the act." Mr Kwinter made that point. He feels that it should be right in the act. Some day we might not have as good a leadership as we have now and, I don't know, somebody might lobby the right minister and he might sneak it through and change the regulation, which would not be good for the industry as a whole, ie, the insurance agents or even the drivers.
The fact of the matter is that this allows the accident victim to get paid right away, so that we don't have them sitting out there, sitting out in court waiting. In fact, I have heard of stories where insurance companies have not paid, and their own insurance company has gone ahead and said, "Well, we weren't at fault, but we are a good corporate citizen," and paid it. Insurance companies over the years, some of them, have got away, and they probably all have done it, that they didn't end up getting to pay their fair share.
So I think that I can agreed with this amendment to this bill, and the regulation can come forward. The argument, "Well, we want to see it now," again, if we had it here right now, one could say, "Well, I don't believe that. Next week he's going to change it anyway," or, "She's going to change it," so I think we should just leave it and get on with this bill.
Mr Tilson: Mr Chairman, I have a question, really just so I understand what Mr Klopp's position is. You're quite right. The bureaucracy can literally change this stuff overnight, which is kind of scary, quite frankly, that procedures can be changed so suddenly. I would hope that you would have more concern about that, that hopefully we're not going to be getting to a complete government by regulation, that you would be fearful of that.
I guess the question that I have, just so I understand what your position is, is that when these regulations are developed, one of the concerns that will be at issue, dealing with the innocent accident victim, is that there may be an issue as to how much should be paid; you know, that that may be one of the issues.
There may be several issues. There may be the issue as to the determination of liability. There may be the issue as to which company. There may be the issue as to how much the innocent accident victim's going to get at that very early stage.
I think we all agree, believe it or not, that we are concerned that the innocent accident victim receive compensation as soon as possible. You can bet your bottom dollar, if we're talking about a large amount of money -- and we could be in some of these serious cases -- that there will be an issue as to the quantum. Because of that, to protect the innocent accident victim, we, as members of this committee, are entitled to know -- in fact, we should demand from the government -- what in the world the procedure is to determine that issue. Otherwise, I, for one, don't intend to delegate every piece of legislation to this government. I don't intend to delegate this -- that's one of the fears that I have of this piece of legislation, the amount of delegation that's going on. The large bulk of this bill is by regulation, which, by your own admission, can be made overnight.
Mr Klopp: No, no. Excuse me. My admission is that someone could use the argument, "Well, you could change it tomorrow," so we would never, ever get out of this argument. It would be a complete circle. If it's standing in front of me, you could say, "No, no; they could change it tomorrow." If it's not here, you're saying, "I've got to see it." I'm just talking about the way we debate things around here.
Mr Tilson: I know you're concerned about the innocent accident victim. Your party has said that with this legislation, with Bill 68, you are concerned about the innocent accident victim. The trouble is, there's a great big question here with this specific section, that the innocent accident victim could be treated rather unfairly. The innocent accident victim may say that he or she wishes such-and-such compensation at that early stage, and yet the insurance company, or companies, will hire all kinds of very expensive legal talent, whereas gosh knows what the innocent accident victim's going to have. With Professor Arthurs, who knows what sort of advocate he's going to be recommending?
But my fear is that we do not know the procedure. We can't even comprehend it because we don't know the procedure to provide the protection to the innocent accident victim at that early stage, and that is why I would seek your support in urging whoever makes the decisions in this place, whether it's the parliamentary assistant -- maybe I'm overcomplimenting him, but whoever makes this decision -- to stand this matter down until this committee can better understand what this procedure might be.
Mr Halpert: The purpose of this reg is to move the statutory conditions, which are currently in the act, into the regulation. I can point to section 234 of the act, which contains the statutory conditions, if you wish to have some more information about what they actually contain. These conditions have to be contained in every policy.
Mr Tilson: I'd just like some rationale as to -- it gets back of course to one of our fears. I believe all members of all three parties in this place have expressed a concern of delegating too much outside the legislation. This is an example. No reason has been given why we're doing this. We're moving the statutory conditions from the legislation to the regulations. Of course currently, if there were to be a change in section 234, it would be necessary for a bill to be introduced, and public debate would take place on that subject. That could be debated in the House. Now it will done literally behind closed doors.
I'd like some rationale. It's a serious move, when we have something that is normally in a piece of statutory legislation and which we as representatives of the public can debate, whether it's good or bad, to change specific sections, to suddenly, in one stroke of the pen, move them from an act to regulations. I would like some rationale as to why we're doing that.
Mr Owens: I'll start off the explanation and ask Mr Halpert to complete. The section is being moved to regulation to in fact make the changes possible, to make them in an easier fashion. I think that earlier on in a discussion there were comments made with respect to how a government could potentially lower benefits or do something that might be detrimental to the accident victim if things were not legislated, were only regulated and could be changed by the Lieutenant Governor in Council, that is, cabinet.
However, the reality is that, in addressing issues that will occur from time to time in terms of either benefits structure or the indexation formula, there is a requirement that it be done with some level of immediacy. The legislative process does not allow that immediate response to changing conditions and what we may find ourselves doing is in fact disadvantaging innocent accident victims.
Mr Halpert: That's essentially correct. The purpose of the statutory conditions is to make sure that every policy issued by every insurer is exactly the same except for some minor changes like the name of the company. These have been around for some time now.
Mr Tilson: Just to clarify what my question is, what I'm trying to determine is the rationale of why we're moving from the legislation to the regulation, all of which you've said is in the legislation now.
Mr Halpert: If a circumstance occurs where a statutory condition should be changed, where for example let's say the industry wants a change, those changes are in the interests of the consumer, the consumer wants a change, then those changes can be made relatively quickly relative to the legislative process.
It also allows to a certain extent -- and I'm not sure we're going this far, but we may one day want to go to plain language. It is easier to put plain language into a regulation than it is to put plain language into a bill or an act.
Mr Tilson: And it is a slow process. There's no question, as we all know it, that democracy is one of the slowest processes there is. However, I believe it's a good process. It precludes individuals who are not accountable from changing laws and rules overnight, laws that affect us. That's why we have -- otherwise, why have any laws? Why not just have a series of regulations, which is a philosophical concern when I see this government introduce more and more legislation and the whole philosophy of its legislation is based on regulation.
I'm not being critical of you personally; I'm just simply saying that the philosophy of this particular government does concern me. Yes, democracy is a slow process. Yes, this is a slow process, to Mr Wiseman, that we're going through right now because, quite frankly, I don't mind telling you that a lot of what is being said at this committee I don't understand, and the reason I don't understand it is because the answers to a lot of these questions are being put in the regulations.
Now we have a whole section that's going to be moved to regulations that haven't even been written yet. They haven't even been written and yet section 234 in its entirety is being moved to regulations that haven't even been written.
So it would seem to me that the government could go away and create a whole new section 234 which normally we, as legislators, have had an opportunity to debate in this House, the pros and cons, and determine whether it's a proper section. Now it can just be changed with the stroke of a pen. It can be drafted overnight. It can be created.
You say there is consultation with interest groups. Well, I'll tell you there's not going to be a great deal of consultation with the innocent accident victim. We have been hounding on that issue continually since this bill has been introduced.
I'm a little concerned about what you say about your anticipating that the government may plan to use plain language. The difficulty with using plain language: What the New Democratic Party may think is plain language, other people in this province may not find is plain language. The language that has been developed through the statutes and which people like the legal staff this place retains is what the people understand, what the court system understands.
Now, if you do that, if you use plain language -- that's the risk of using what you think is plain language -- it may be incomprehensible language. I as a legislator believe I have the right to debate what you think -- and I don't mean to be pointing at you; I'll point to Mr Owens instead -- what Mr Owens thinks is plain language. He and I have that battle daily. He doesn't understand what I'm saying and I don't understand what he's saying, but we're having an opportunity to debate. Now we're going to go away and we're going to have someone rewrite this thing.
I have a great deal of concern when I ask the simple question as to what the rationale is of moving this entire section specifically when we've been spending most of this day expressing a great deal of concern about the fact that there are no regulations, and now we're going to move it into regulations that aren't even written. It's almost preposterous.
The comment was made by Mr Owens, for example, that one of the fears is that a government, without going to the House, could lower the benefits. They could unilaterally lower the benefits, and when you start doing this through regulation, that's exactly the fear that we as legislators should be concerned with.
Mr Tilson: Your philosophy isn't very good, Mr Klopp, but I have respect for your integrity. But I will say that's the fear, that changes can happen overnight. I must say I ask for a better rationale than what has been given as to why we're moving an entire section to a set of regulations that hasn't even been written.
Mr Klopp: I premise this as carefully as I can, because I think when the learned gentleman mentioned that this is relative to the legislative process, he by no means felt we're trying to overthrow government, whoever is the minister or whatever. I don't think that's the intent at all, and it still takes a long time to change a regulation.
Mr Klopp: The two years that I've been here, I haven't seen ministers overnight make a decision and then the opposition or even members -- the lobby groups that are out there, and God bless them all, I guess -- don't allow anything to just slip through in the night. Heaven forbid any government that tries that, and I think every government has to a certain extent -- maybe. I don't know.
By no means in the middle of the night is a bureaucrat, if we want to use that harsh term, going to sneak something through a minister. At the very least, it will be discussed in the House. I've seen so many things discussed in the House that for any member of Parliament to say, "It'll get in and I won't have time to debate it in the House" -- we have lots of points of privilege on many, many issues, and indeed the industry would very much pounce on anybody who would do something frivolous or whatever.
This particular portion of this bill to be allowed to move into regulations, the fact that you've even raised those concerns, it's now in Hansard, so it cannot ever be muzzled. I'm sure maybe somewhere down the road, I may pull it out 20 years from now if I'm in opposition, and if some minister from maybe even your party comes in and tries to sneak something through, I'll bring out the learned Mr David Tilson's remarks. I'm sure I will win the day and they will back down.
Mr Owens: Very quickly, Mr Tilson suggested that he hasn't understood a lot of what's gone on. I certainly wouldn't want to characterize that as anything other than as he described it, not having the regulation in front of him, but it's quite simple, the reason behind this section.
As I indicated, and Mr Halpert concurred, in terms of responding to issues within the province and the necessity to change benefits, to offer improvements, for instance, to reflect new realities within the insurance industry, it's necessary to be able to move, and I offer the phrase "relatively more quickly," than it would take to move amendments through the House. So I think we've presented a very cogent and complete answer on this subject.
Mr Tilson: I don't mean to be taking shots at Mr Halpert. In fact I hope to retain him to undo what you people have been doing. However, I look at the issues specifically in section 234. You could almost pick a section at random, because it's a very lengthy section. Subsection 8, is it -- I may be referring to the wrong number -- where we're talking about time limits? We've spent a considerable period of time on other sections in this bill, changing the subject of time limits.
What this amendment is doing is that the topic of time limits could be literally changed without any debate among legislators. The governing party could in its wisdom decide that the time limit in this specific section is too long and therefore could shorten it substantially, which would be at great prejudice to all involved.
I question what the parliamentary assistant is saying, when we've spent a considerable period of time on the subject -- Mr Elston raised a question and you agreed to change that, and it is quite contradictory when you now say -- well, take this subsection I'm referring to:
"8. The notice required by statutory conditions 6 and 7 shall be given to the insurer within seven days of the incident but if the insured is unable because of incapacity to give the notice within seven days of the incident, the insured shall comply as soon as possible thereafter."
The governing party of the day may say: "That's too long. That's too loose. We'll change that." That's why you have it in the legislation, so that all concerned will know specifically what the law is, and with moving sections such as this, we have no idea as to what the law is.
Mr Harnick: I have a point of order. I have learned from my House leader's office, and I have moments ago confirmed this with the minister in charge of this bill, who also happens to be the government House leader, that by 5 o'clock this afternoon, a motion is being filed or has been filed with the Clerk --
Mr Harnick: Thank you. I have been advised by the government House leader that a motion regarding time allocation of this bill was to be filed by 5 o'clock today. Accordingly, I would move adjournment of the committee for the balance of the day.
Mr Harnick: Let's put it this way: Without all of these points of order and rules and all of that stuff, we're wasting our time here because this bill is getting yanked out of this committee. There's a motion for time allocation. The House leader, your own House leader, said that it's going to be heard next week. Why are we wasting our time here? The next time we meet is next Thursday. Well, between now and next Thursday, that motion is going to be heard, because that's what Mr Charlton just told me.
Mr Kwinter: Mr Chairman, on the same point of order: As we started this afternoon's session, I had privately said to you that I had been informed of the same thing. I was actually waiting and I was looking at the clock at 5 o'clock, and just before Mr Harnick walked in I was about to raise the exact same point of order.
Our caucus administrator was advised this morning that the government was going to introduce time allocation on this particular bill. Mr Harnick came in earlier this afternoon and came up to me and said, "We just heard that there's going to be time allocation on this bill," and I said yes, we'd heard the same thing. So it's obvious that this is in fact going to happen.
If that is the case, then I would agree with Mr Harnick. We are literally spinning our wheels if the government is going to say, "Don't bother debating this any more; we're yanking it." To go through this whole exercise when we know that it's not going to have any effect because this bill in fact is going to be removed from this committee, I would agree that there should be an adjournment.
The Chair: Thank you, Mr Kwinter. Until the point in time that the Chair becomes aware of this information -- I'm not, although you've told me that. And this motion hasn't been successful in the House, I might add, under that information.
Mr Wiseman: On this point of order, Mr Chair: This motion is irrelevant to the work of this committee in that while it has been filed, it has not been invoked. Therefore, the work of this committee should continue. I think we should start and move as quickly as possible to continue the clause-by-clause of Bill 164.
The Chair: In spite of that, Mr Harnick, Mr Wiseman is correct: Even though one can assume that the government will be successful with this motion, the motion has not passed yet, so the Chair is going to continue this committee until 6 o'clock, and that means that we are presently on subsection 12(5) of the bill.
Mr Tilson: Just on the motion to adjourn, Mr Chairman: The fact is that I heard Mr Harnick reading the question to some of the people around him. I think it would be worthwhile for members of the committee to hear exactly what Mr Charlton's motion is. The reason I say that is that the little bits I did hear --
Mr Tilson: Mr Charlton has essentially said that he is the House leader and this government is going to take it out of this committee. I think we should hear what the intention of the government is to take it out of this committee.
The Chair: Order. Mr Tilson has moved adjournment of the committee. I'll put the question to the committee. Shall this motion carry? All those in favour of the motion? All those opposed? The motion does not carry.
Mr Owens: Subsection 12(6) amends the regulation-making powers, specifies circumstances in which insurers cannot decline to insure a person. This is a technical change to an existing provision to ensure that the appropriate authority exists to control underwriting practices.
Mr Owens: It's an amendment to the regulation-making power that specifies circumstances in which an insurer cannot decline to insure an individual. Again, there is an existing provision and we are merely making a technical change to ensure that the appropriate authority exists to control the underwriting practices; in other words, setting out the reasons why a person shall or could be declined coverage.
Mr Tilson: I can read the section, and I have listened very carefully to what the parliamentary assistant has said. I wonder, have there been some factual experiences in the insurance industry that have led the government to put forward this proposed amendment? Also, could he relay those facts?
Mr Owens: Again, this is related to the small-print provision that we discussed earlier and this repeals a redundant provision related to the repealed small-print section. Mr Halpert quite effectively and exhaustively explained the small-print section in a previous section we passed.
Mr Owens: The section beginning with "payments and exempting any insurer, class of insurers or class of policies from statutory condition 4 set out in section 234" is the redundant section, so that's specifically the language that will be removed.
Ms Fisher: The current regulation-making power allows regulations which would exempt any insurer, class of insurers or class of policies from statutory condition 4 set out in section 234 of the act; 234 will no longer be in the act but will be in the regulations. So the regulation itself can describe the circumstances of instalment payments.
I guess I can only repeat again -- and I know this is futile, particularly in the action that's been taken by the House leader -- that it is almost silly proceeding because I feel very strongly the fact that every question we ask, we come back to the regulations that haven't been written. All of these issues are going to be clarified and explained in regulations that haven't been written.
Mr Wiseman: I believe this has been ruled on on more than one occasion. I do not think we need to sit through another repetitive dissertation by the member on regulations. We've heard it many, many, many times before. This committee has been sitting for 30 hours and I would hazard to say that most of it has been listening to this same argument put forward over and over again. I'm pretty familiar with it.
Mr Tilson: A question to anyone: Paragraph 19 now says that obviously some of this matter will be dealt with in regulations. I wonder if you can anticipate what will be in the regulations, as to why yet another section has been taken out of the act and put into the regulations. Perhaps you can help us.
Ms Fisher: The proposed provision under Bill 164 doesn't actually take anything out of the act and put it in the regulations. The current section 234 sets out provisions for instalment payments. So the current regulation-making power under paragraph 19 allows for exemptions from that section of the act or that provision.
Mr Tilson: I guess, with respect, we're talking now about the section as it now reads, for which a number of lines have been taken out, and the reason is that it's going to be referred to the regulations; in other words, the issue of classes of insurers or class of policies from statutory condition 4 as set out in section 234, we have now been told, as I understand it, it's going to be put into the regulations. Is that what's going to happen?
Mr Tilson: I guess I can only repeat what I've already said; that is, that we seem to be delegating more and more and that we, as legislators, now will have less and less control over what is going to go on in the insurance industry in this province, and that, I believe, will be detrimental to all. It will be detrimental to the insurers, it will be detrimental to the insured, it will be detrimental to the innocent accident victims, and I think that we are making a big mistake without more clarification as to the rationale as to why we're taking this major sector out, section 234, which we've already voted on, into the regulations.
Mr Owens: This is a complementary regulation-making provision to section 20. It allows the Lieutenant Governor in Council to designate classes of insurance contracts for which insurers may offer a deductible for the direct compensation vehicle damage coverage.
Mr Halpert: This is to allow for deductibles for such classes of contracts, for example, that taxis would want to have. In many cases the cost of insurance for taxis is extremely high, and in order to keep their rates down they include a significant deductible that would not be appropriate, for example, for most private passenger vehicles.
Mr Tilson: A question to Mr Owens, Mr Chairman: Presumably I understand why you've given that as an example, and presumably there are some other examples which you'll hopefully share with us. Have you consulted with the insurance industry on this particular section and what is its response?
Mr Owens: The motion introduces two new regulation-making powers that will provide for rules in governing the settlement of claims and assignment of benefits. The regulations are designed to ensure that claimants are protected against undue pressure from insurers or service providers from claiming benefits. The regulations governing settlements will protect claimants from giving up the right to claim future benefits in exchange for a quick settlement with insurers. Again, the regulations governing assignment of benefits will protect claimants from assigning an unfair amount of their benefit to service providers as a condition of getting access to those services.
We're looking at a section of this legislation which is consistent with the spirit and the fact that it's our intent to protect consumers to the best and greatest extent possible. Unfortunately, my colleague from London South isn't here. He could talk about some of the experiences he's had with respect to claimants signing their benefits and --
Mr Owens: -- protect claimants over the long term to ensure that they get the maximum benefit possible as well as protecting consumers from having to assign portions of their benefits to access services of service providers.
Mr Winninger: Unfortunately, as Mr Tilson well knows, there's a certain privilege that attaches to solicitor-client retainers. While I'd be quite happy to write to all my former clients before I was elected and seek their written authorization to disclose the details of their cases to you, Mr Tilson, that would take some time. In the meantime perhaps we could proceed to complete a few more clauses before our time expires today.
Mr Tilson: I would like to proceed with this section. Obviously some facts have been drawn to the attention of the government to lead it to make this proposed amendment. Mr Owens has talked about problems of consumers with respect to governing agreements. I think it would be useful for the committee to hear what some of those problems are so that we can better understand this subsection.
Ms Fisher: In speaking with the mediators at the Ontario Insurance Commission, we've heard that there are instances of claimants being offered cash settlements soon after the accident, taking the settlements and realizing that these were not beneficial to them. That covers off the agreements to settle claims.
For the assignments, we understand that there are rehab facilities that are in fact asking insurers to sign the cheques to them, taking a percentage and then cutting the rest of the cheque to the insured person. There should some control over this to protect claimants.
Mr Owens: I think that I was quite clear in terms of the intent of this section, which is the issue under discussion, which is to provide consumer protection. You can be assured that regulations, while not in order to discuss at this point, will certainly keep that intent and spirit in mind.
Mr Tilson: There's no question that I think one thing that we're all concerned with is the avoidance of litigation either through the courts or through the Ontario Insurance Commission. If consumers have the proper protection and understand their rights, and agreements can be worked out between adjustors and the innocent accident victims, I'm certain we would all laud that, because of the great costs that would save.
At the same time, I think we're entitled to know what anticipated regulations are being contemplated so that that negotiation process won't be hampered between the innocent accident victim and the insurer.
Again, for the government to introduce an amendment such as this, they must have some thoughts as to how the consumer will be protected, unless they're simply saying, "No, such agreements will not be allowed." Surely there are some situations where agreements can be allowed.
I'm only trying to speculate. I assume that one of the ways, I can just say, is that perhaps the advocates that Professor Arthurs is going to create would be able to properly advise the innocent accident victim so that they would know their rights before they enter into agreements for the purposes of settling claims. That's one of the big fears, and we've all seen that. We've all watched people who have been confronted -- for whatever reason, they need the money, so they'll settle anything and then they realize what a bad deal they have. I understand that, but surely when a government is going to introduce an amendment such as this without hampering the negotiation process, they must have some system in mind, and not just blindly propose amendments. A question to either Mr Owens or the ministry staff.
Mr Owens: Not wanting to participate in an out-of-order debate but to perhaps assist Mr Tilson in his understanding, one of the issues we perhaps might consider is that a cooling-off period may be put into place. In terms of Mr Tilson's concern about, again, consumer protection issues, I take him at his word that he's serious about this and that --
Mr Owens: I was simply going to invite Mr Tilson to continue to participate as eagerly as his colleague Mr Harnick has in this legislative process and to meet with the minister and to express his concerns to Mr Charlton.
Mr Tilson: Just in response to that, I believe that this committee has been asked to study clause-by-clause the question. I would like to have some proper response to that other than the suggestion of the parliamentary assistant that I go to the minister's office and ask him those questions. I'm asking the parliamentary assistant. That's why he's being paid $10,000 more than the rest of us, to come in here and answer these questions.
Mr Owens: On a point of order, Chair: Notwithstanding the fact that the House has now adjourned and that we are past 6 of the clock, I did respond to Mr Tilson's question. He asked for an idea as to what we might be considering. I suggested that we might be considering a cooling-off period, yet he chooses to ignore that fact.