A recent decision from the Ontario Superior Court, HMK (Minister of Public and Business Service Delivery) v. Intact Insurance Company, 2026 ONSC 1713, provides a critical victory for the Motor Vehicle Accident Claims Fund (the “Fund”) and highlights the court’s commitment to preventing private insurers from gaining an unfair advantage at the taxpayer’s expense.
The Issue: Can Insurers Dodge Administrative Costs?
In this case, the Fund began paying Statutory Accident Benefits (SABs) to injured claimants while investigating which private insurer held priority. Once the Fund proved that Intact and Dominion were responsible, the insurers accepted priority and reimbursed the benefits, however, they refused to pay the Fund’s investigative and adjusting fees (known as “pre-arbitration expenses”).
The insurers argued that because the 2010 amendments to the Insurance Act Regulation didn’t explicitly mention these fees for the Fund, they didn’t have to pay.
The Court’s Reasoning: No “Windfall” for Private Insurers
Justice L. Brownstone rejected the insurers’ arguments, grounding the decision in several key legal principles:
- The fund is unique. Unlike private insurers, the Fund does not collect premiums to offset its costs. It is a publicly funded resource of last resort. The Court held that the legislative scheme is meant to protect public funds, not allow private companies to profit from them.
- The “proper case” exception lives on. The Court clarified that the Fund can still bypass the usual arbitration process and sue in court for restitution when there is no actual priority dispute left to arbitrate. If an insurer accepts priority but refuses to pay ancillary costs, the court is the appropriate venue for the Fund to seek recovery.
- The importance of preventing unjust enrichment. The court found that by doing the legwork (investigating claims, gathering police reports, and adjusting files) the Fund performed work that the private insurers would have had to pay for anyway. Allowing the insurers to keep that benefit for free would constitute unjust enrichment.
Key Takeaways from the Decision
- Legislative Intent: The 2010 amendments were meant to enhance protections for the Fund, not put it in a worse position or strip away its pre-existing rights to restitution.
- No Requirement for “Pointless” Arbitration: The Fund is not required to initiate expensive arbitration proceedings if the only remaining issue is the recovery of administrative fees after priority has been accepted.
- Financial Impact: The Court ordered Intact and Dominion to pay the Fund’s expenses (over $15,000 combined) plus interest and legal costs.
Expert Litigation Counsel at Flaherty McCarthy LLP
This case serves as a reminder that “clarity and certainty” in insurance law are paramount. It prevents insurers from delaying acceptance of priority in hopes of avoiding administrative overhead.
At Flaherty McCarthy LLP, we specialize in navigating the intricate “pay now, dispute later” regime. Contact us today to discuss how this ruling may impact your current or future claims.
