On November 6, 2017, the Ontario Superior Court of Justice released the decision of State Farm Automobile Insurance Co. v. Kulaveerasingam (Respondent) where insurance litigation partner, Cary Schneider successfully appealed an application for judicial review by Desjardins/State Farm Automobile Insurance (Applicant).
In this case, the Respondent, who was injured in a motor vehicle accident, that occurred on October 29, 2010, and was insured by the Applicant, had proceeded to arbitration before the Financial Services Commission of Ontario because of a dispute about the Statutory Accident Benefits. The arbitrator held that Kulaveerasingam was entitled to an interest rate of 1% per month, compounded monthly, on overdue accident benefits for transitional policies. The Respondent appealed to the Director’s Delegate. In his decision, the Delegate allowed the appeal on the issue of interest and ordered that the Respondent was entitled to interest at 2% per month, compounded monthly, on overdue accident benefits for transitional policies.
Desjardins/State Farm Automobile Insurance appealed that decision arguing that the Delegate’s decision was unreasonable. The unanimous court agreed with the insurer’s position and found that the rate of interest should be 1% as opposed to 2%. This is an important precedent decision dealing with transitional policies in general (including applicability to the current changes) and resulted in significant financial savings for this case in particular.
Read the court’s decision: State Farm Automobile Insurance Co. v. Kulaveerasingam, 2017 ONSC 6278