The Motor Vehicle Accident Claims Fund in Ontario is characterized as an insurer for purposes of resolving entitlement to first party accident benefits

The Court of Appeal held that the Motor Vehicle Accident Claims Fund was an “Insurer” with respect to the process for resolving disputes over the payment of statutory accident benefits to persons injured in car accidents.

Allstate Insurance Co. of Canada v. Motor Vehicle Accident Claims Fund, [2007] O.J. No. 292, Ontario Court of Appeal, J.I. Laskin, J.M. Simmons, E.E. Gillese, J.L. MacFarland JJ.A. and G.D. Lane J. (ad hoc), January 31, 2007

The Motor Vehicle Accident Claims Fund (the “Fund”) paid benefits to the family of an accident victim and sought reimbursement either from Allstate Insurance or Manitoba Public Insurance. Both insurers denied coverage. The Fund then commenced arbitration pursuant to Ont. Reg. 283/95 which provides for arbitration of disputes between insurers. Allstate objected to the Arbitrator’s jurisdiction on the ground that the Fund was not an “Insurer”. The Arbitrator concluded that he had jurisdiction and found that Allstate was liable for accident benefits because the victim of the accident was financially dependent on her mother and therefore, an insured person under her mother’s policy with Allstate. Allstate successfully appealed this decision and the Arbitrator’s award was set aside for lack of jurisdiction as the Fund was not an insurer. The Fund appealed this decision.

The Court allowed the Fund’s appeal and Arbitrator’s award was restored. The Court found that the purpose of the legislative scheme at issue was the prompt delivery of accident benefits to injured persons and the timely and cost-efficient resolution of disputes over who should pay those benefits. Based upon this analysis, the Court held that the term “insurer” should be interpreted to include the Fund for the purpose of resolving disputes over the payment of accident benefits. Therefore, where the Fund disputes its obligation to pay benefits, it must resolve that dispute in accordance with the arbitration process under the Regulation.

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