In my blog entry of February 5, 2016, I talked about the upcoming changes to the procedure for accident benefit disputes. And further updates are now available. The License Appeal Tribunal (LAT) will be accepting applications to its new Auto Accident Benefits Service (AABS). In order to accommodate some of the unique aspects of accident benefit dispute resolution, the LAT will adopt new rules of practice and procedure, effective April 1, 2016. The mandate of the AABS is to reach a final decision with respect to a benefit disputes within six months. Such an aggressive mandate has many file handling consequences for insurers, including cost savings through Legal Process Management.
Once an application is filed, an insurer must respond to same. After the response is filed, a case management officer is assigned to the file and that CMO will schedule a one hour case conference within 45 to 60 days of the response being received. Once this case conference is scheduled, a case conference summary form is sent to all parties for completion. This must be completed and delivered to AABS and the other party at least 10 days before the scheduled Case conference. The majority of these case conferences will be over the phone. They will discuss evidentiary issues, as well as opportunities for settlement. A decision about the type of hearing to take place (written, oral, video conference) will also be decided. The current mandate is to have a hearing within 60 to 90 days of the case conference.
There are significant implications to insurers for this aggressive timeline. First, there can be no delay in assembling the proper responding evidence once an application is received. Insurers and their legal counsel partners must develop a streamlined arbitration plan as soon as possible so as to ensure that proper and admissible responding evidence will be ready for the hearing. This includes ensuring that any medical reports and any surveillance/investigation are all done in a timely manner.
Second, is the ability for cost savings. The new streamlined rules were designed with the goal of streamlined process management. Insurers and their legal counsel partners should also adopt process management to maneuver these claims through the new dispute resolution process. With a discreet and finite set of processes in this new structure, insurers and their legal counsel partners must act efficiently in managing the process. Furthermore, the process lends itself well to alternative fee structures which should act to reduce legal expenses for all parties involved, but particularly insurers. The new dispute resolution process can therefore be distilled into three distinct phases: phase 1, the receipt of the application, response, and establishment of a tactical and strategic plan for moving forward; phase 2, the case conference which involves documentary productions, settlement negotiations, and a determination of the type of hearing; and phase 3, the hearing. Each phase should have a standard process that can be managed by insurers and their legal counsel partners. With any standardized process then, the ability to more accurately gauge and estimate legal fees for the purpose of alternative fee arrangements is made easier. In fact, with our national resources including a dedicated legal project management team, we have already instituted alternative fee arrangements for some of our clients. We believe that this new dispute resolution process allows us to provide more efficient, cost effective service to our clients.