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Few more insurance firms sued for withholding HST from several accident victims

Five more Canadian insurance companies have been served with class action lawsuits — in addition to six others first reported by the Star this month — for withholding medical benefit HST payments from car accident victims in violation of the provincial regulator.

Paul Harte, one of the lawyers involved in the proposed class-actions, says they have been overwhelmed with calls since last week’s story in the Star. He says the “unfair practices we identified appear to be widespread.” (ANDREW FRANCIS WALLACE / TORONTO STAR)

Co-operators, Wawanesa, Economical, Commonwell and Echelon were served individual lawsuits Thursday, each alleging $100 million in damages for HST costs on medical benefits that were passed on to claimants. The practice, according to the claims, is in defiance of repeated demands from the Financial Services Commission of Ontario (FSCO), which regulates the industry.



A week earlier, Intact, Aviva, Unifund Assurance, Belairdirect, Certas Direct and Allstate received nearly identical claims.

The 11 suits, which have not been certified or tested in court, now claim a total of $1.1 billion in damages.

Spokespersons for all 11 companies either declined or did not respond to requests for interviews. Only Aviva issued a written statement earlier this month, saying the company “has followed the industry position on HST being included within the maximum benefit amounts … and continues to support this interpretation.”

On Friday, Intact spokesperson Hazel Tan wrote: “We can confirm that we are paying the HST and are not counting it towards the cap, as per current FSCO guidelines.”



 

A statement Thursday from Aviva spokesperson Fabrice De Dongo continued to defend the company’s HST policy but offered a more conciliatory tone:

“On behalf of our customers, we have actively and repeatedly sought clarification from the government regarding the tax handling on goods and services provided to our customers. This is part of our commitment to continually explore ways to reduce or eliminate complexity for them, and to increase trust in the insurance industry overall.”

These insurance companies are among 11 now facing class-action lawsuits for failing to pay or reimburse HST to accident victims on their medical benefit claims.

These insurance companies are among 11 now facing class-action lawsuits for failing to pay or reimburse HST to accident victims on their medical benefit claims.  (LOGOS SUPPLIED)

Paul Harte, one of the lawyers involved in the proposed class actions, says the lawsuits have revealed there is no clear industry position on whether insurers should cover HST costs in car accident medical benefits.



“We have learned that some auto insurance companies have been following the rules all along. Others, such as Intact, have acknowledged their error and have agreed to change their policies. A handful of companies, including Aviva, continue to shortchange their customers. The marketplace may decide this issue before the courts.”

Harte said that since the Star’s first news story, the lawyers have been overwhelmed with calls and that the “unfair practices we identified appear to be widespread.”

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