Can a claimant receiving accident benefits still sue an insurer for extra-contractual damages in court, in light of the April 1, 2016 changes to the Insurance Act? That was the question before Justice Ramsay in a Rule 21 motion recently brought by Economical Mutual Insurance Company.

Section 280 of the Insurance Actwas amended on April 1, 2016, to provide that all disputes in respect of entitlement to statutory accident benefits or the amount thereof were to be brought before the Licence Appeal Tribunal (LAT). Section 280(3) specifically provides that no person may bring a proceeding in court for any dispute that falls within the jurisdiction of the LAT, with the exception of an appeal from a decision of the LAT or an application for judicial review.

In this case, Economical was the defendant in an action brought by the plaintiff, Morgan Stegenga, seeking damages related to the handling of her accident benefits claim due to alleged bad faith, negligence and fraud. The Statement of Claim was issued after April 1, 2016.

Economical brought a Rule 21 motion to have the claim struck on the basis that it disclosed no reasonable cause of action and on the basis that the plaintiff’s claim fell within the exclusive jurisdiction of the LAT.

The motion proceeded on March 5, 2018. In his endorsement, released March 6, 2018, Justice Ramsay agreed with Economical’s position that the phrase “in respect of” used in section 280 of the Insurance Actwas very broad and was intended to govern alldisputes regarding accident benefits entitlement. Justice Ramsay also noted that the LAT’s exclusive jurisdiction was essential to the goals of the legislative changes of April 1, 2016. He further confirmed that he was bound to look at the facts giving rise to the dispute and not the legal characterization of the wrong.

Justice Ramsay concluded that there was “no reason to doubt that the legislature, in enacting the present s.280 of the Insurance Act, intended to deprive a claimant of resort to the court at first instance whenever the claim is based on denial of accident benefits, no matter how the denial is characterized in legal terms.” As such, the action was dismissed.

This case confirms that, as a result of the April 1, 2016 changes to the Insurance Act, alldisputes related to accident benefits entitlement, no matter how they are characterized or pled, must proceed through the LAT and may no longer be brought before the courts.

See Stegenga v. Economical Mutual Insurance Company, 2018 ONSC 1512 (CanLII)


  • Julianne Brimfield

    Born and raised in Sydney, Australia, Julianne (known around the office as Jules) left the Outback and her Vegemite to finish her legal studies in New Brunswick. Don’t let her bright smile fool you: like most native Australian species, Jules is lethal.