Yesterday, partner Jennifer Bezaire announced that the firm is part of a group of lawyers that is initiating class action lawsuits against six auto insurers in Ontario and the Financial Services Commission of Ontario (FSCO), which regulates auto insurers.
The purpose of the lawsuit is to force insurers to pay back HST that should not have been charged to policyholders who were injured in accidents, Bezaire said. She notes that the FSCO could not have been clearer about the HST being a tax that is not part of benefit limits.
The insurance companies targeted in the lawsuit all decided to deduct HST from benefits paid to clients. According to Bezaire, just a few weeks ago, Aviva Insurance told a policyholder in writing that the company would stick to its position that any HST that applies includes the benefit limit. The insurance companies ignored FSCO when possible, refused to pay HST or used it to reduce benefits, causing injured policyholders to get less care.
Unfortunately, FSCO ignored what was happening, even when the regulator knew policyholders were wrongfully denied benefits. After many complaints, FSCO acknowledged what was happening and said the insurance companies were told to end the practice. The insurers even made promises to stop this practice, but it continued.
The class action lawsuit is also seeking an injunction to prohibit the six insurance companies from continuing to deduct HST from benefits against the direction of the FSCO and case law involving the License Appeal Tribunal.
Bezaire said other insurers are being investigated because it appears these types of actions by insurers were widespread.
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Partner Jennifer Bezaire manages Greg Monforton & Partners' Statutory Accident Benefits department and teaches the Automobile Insurance Law course to Faculty of Law students at the University of Windsor.