Over the years while in practice, I had more than a few clients surprised by a reality they never expected. They were not primarily fighting about the nature of their injuries or the scope of their treatment. Instead, they found themselves caught between two insurers, each taking the position that the other bore responsibility for paying accident benefits. They had done what the system required of them. They reported the accident, submitted an application for accident benefits, attended examinations, and proposed treatment plans. Yet their files stalled because a priority dispute was unfolding in the background. While insurers worked through that dispute, income replacement benefits slowed, treatment approvals became cautious, and the individual the no-fault system was designed to protect experienced delay.

That experience is not unusual, nor is it the product of insurer misconduct. It is, from my  mediator’s seat, a foreseeable consequence of how Ontario’s accident benefits regime allocates responsibility. The Statutory Accident Benefits Schedule^[1] (SABS) was designed to provide prompt, no-fault access to income replacement, medical and rehabilitation benefits, and attendant care following a motor vehicle accident. But layered onto that promise is a priority framework that requires insurers to determine, often under tight timelines and with incomplete information, which carrier ultimately bears responsibility for the claim. Where reasonable disagreements arise, the statutory scheme contemplates, and in practice channels, insurers toward arbitration as the mechanism for resolving priority disputes^[2]. The Ontario Court of Appeal’s recent decision in Echelon General Insurance Company v. Unifund Assurance, 2025 ONCA 324^[3], discussed below, illustrates that dynamic rather than resolving it. The decision clarifies aspects of cost recovery between insurers, but I don’t think it eliminates the underlying tensions that arise when responsibility is uncertain and financial exposure is significant.

At the centre of this dynamic lies the priority regime set out in section 268 of the Insurance Act^[4] and O. Reg. 283/95^[5]. Priority disputes are technical and largely invisible outside the accident-benefits bar, yet they routinely determine whether benefits flow smoothly or proceed more cautiously while insurer-to-insurer disputes are worked out. Understanding how this regime operates, and why delay can still occur even when the rules are followed, is essential to any meaningful discussion of access to justice in motor vehicle cases.

The Statutory Priority Ladder: Theory and Purpose

Section 268 of the Insurance Act^[6] establishes a cascading hierarchy to determine which insurer is responsible for paying accident benefits. At the top of that hierarchy is the insurer of the automobile in which the injured person is an insured. That is followed by the insurer of the automobile the person was occupying, then the insurer of another involved automobile, and finally the Motor Vehicle Accident Claims Fund^[7] as insurer of last resort. These rules apply without regard to fault. Priority determines which insurer must pay first, not whether benefits are owed.

To protect claimants from delay while insurers sort out responsibility, Regulation 283/95 imposes a key operational rule. The first insurer to receive a “completed” application for accident benefits is required to respond to the claim and begin paying benefits in accordance with the SABS. That insurer may dispute priority, but it must give written notice to the competing insurer or insurers within 90 days of receiving the completed application. If it fails to do so, it may be barred from disputing priority unless it can demonstrate that it conducted reasonable investigations and that the 90-day period was insufficient.

On paper, this structure reflects a careful balance. Claimants are meant to receive benefits promptly, while insurers are given a defined, time-limited process for resolving responsibility among themselves. In many cases, the system works exactly as intended. But where priority is genuinely unclear, the practical operation of the regime becomes more complex.

When the Rule Works and Why It Sometimes Doesn’t

At the level of black-letter law, the priority framework is both clear and deliberate. Section 268 of the Insurance Act and Regulation 283/95 require that the insurer who first receives a completed Application for Accident Benefits^[8] respond to the claim and begin paying benefits, even if that insurer believes another carrier ultimately has priority. Priority disputes are intended to be resolved strictly between insurers, without interrupting the flow of benefits to the injured person. In straightforward cases, that is precisely how the system operates.

The difficulty lies not in the design of the rule, but in the conditions under which it must be applied. The obligation to respond and pay is triggered only once an application is considered “completed,” a concept that carries real operational significance. Insurers must ensure they have sufficient information to assess entitlement, calculate benefits accurately, and comply with statutory timelines. Where employment status, residency, vehicle use, or policy relationships are unclear, determining whether an application is complete may itself require investigation. That investigative step is contemplated by the regulatory scheme, but it necessarily slows the transition from application to payment in more complex files.

That pressure is compounded by the 90-day notice requirement in Regulation 283/95. Insurers must investigate priority quickly enough to preserve their right to dispute it, while simultaneously administering the claim in real time. In cases involving multiple potentially responsive insurers, such as overlapping family policies, employer-related coverage, or disputed use of a vehicle, the regulation creates a compressed decision-making window. Although the rule is designed to promote certainty, in practice it can produce cautious claims handling during the interim period while facts are gathered and positions crystallize.

There is also no immediate enforcement mechanism that compels timely payment where the rule is technically observed but practically strained. Claimants may challenge delay through the Licence Appeal Tribunal^[9], seek interest, or pursue penalties, but those remedies operate retrospectively. By the time they are adjudicated, the practical consequences of delay may already have been felt. The framework assumes good-faith compliance, but it does not provide a rapid corrective tool when uncertainty leads to hesitation rather than outright denial.

Finally, although priority is legally distinct from coverage, it is often treated as a coverage-adjacent risk in practice. Once priority is genuinely in doubt, insurers are conscious that a later determination may carry lasting financial consequences. The Court of Appeal’s decision in Echelon confirms that an insurer who pays first may not recover the full transactional cost of administering a claim if it is later found not to have priority. That reality does not reflect misconduct. It reflects rational behaviour within a system that allocates financial risk carefully and offers limited avenues for cost recovery when uncertainty persists.

Taken together, these features help explain why delay can occur even where the governing rules are understood and applied. The priority regime is clear in principle, but procedural rather than self-executing. It depends on investigation, judgment, and later adjudication. In the space between theory and resolution, the claimant may experience hesitation and delay, not because the law has failed to account for them, but because the system accepts a degree of friction as the price of insurer certainty. It is within that space that priority disputes come to shape not only who pays, but how and when accident benefits are actually delivered.

The Cost of Being First: Echelon v. Unifund

The Court of Appeal’s 2025 decision in Echelon v. Unifund, provides a useful illustration of the financial dynamics at play in priority disputes. The underlying dispute arose after an individual was injured in a motor vehicle accident and applied for accident benefits. Echelon received the application and began paying benefits in accordance with the Statutory Accident Benefits Schedule. During its investigation, however, Echelon took the position that Unifund, as the insurer of the claimant’s father, had higher priority under section 268 of the Insurance Act. Unifund disputed that position, resulting in a formal priority arbitration between the insurers. The arbitrator ultimately concluded that Unifund was the priority insurer and ordered it to reimburse Echelon for the accident benefits Echelon had paid, together with the costs of the arbitration itself.

What Echelon could not recover, however, were its substantial pre-arbitration expenses, including legal fees, adjuster time, and other transactional costs incurred while administering the claim. The Court of Appeal upheld that result, concluding that Regulation 283/95 reflects a legislative choice to limit cost recovery to narrow circumstances involving improper deflection of claims. Absent such conduct, insurers are expected to absorb their own pre-arbitration expenses as part of the cost of participating in the priority framework.

The decision does not criticize insurers for disputing priority, nor does it suggest that caution in claims handling is improper. Rather, it confirms that the regulatory scheme allocates financial risk in a way that makes early certainty valuable and uncertainty expensive.

Seen in that light, Echelon helps explain why insurers approach first-payer obligations with care. Where priority is uncertain, the financial consequences of being wrong are real, and the regulatory scheme leaves limited room to recoup the full cost of administering a claim while that uncertainty is resolved.

Structural Tension, Not Institutional Failure

There is a natural tension embedded in the priority regime. Insurers are required to act promptly and fairly toward claimants, while also protecting their insureds and managing exposure in a complex, multi-carrier environment. The law asks insurers to pay first and sort things out later, but it also limits their ability to recover the costs of doing so if they turn out not to be the priority insurer. That tension does not reflect bad faith. It reflects competing statutory objectives.

From the claimant’s perspective, however, the result can feel indistinguishable from delay. Benefits that are technically payable may arrive slowly. Treatment approvals may proceed cautiously. And global resolution of tort and accident benefits claims becomes more difficult when responsibility remains unsettled.

Why Priority Disputes Belong in Mediation

Priority disputes are not simply technical skirmishes between insurers. They affect the timing, scope, and certainty of benefits, and they complicate settlement discussions across the entire file. Because the factual universe in priority disputes is usually finite and well-defined, I think they are particularly well-suited to early, focused mediation.

Early resolution of priority does not require assigning blame or re-writing the statutory scheme. It requires recognizing that prolonged uncertainty serves no one, not insurers, not claimants, and not the broader justice system. Used thoughtfully, mediation offers a way to reduce delay, clarify responsibility, and allow the accident benefits system to function as it was intended, as a mechanism for timely support, rather than procedural stalemate.

From my experience, priority disputes are not anomalies. They are recurring pressure points in Ontario’s accident benefits regime. Treating them as such, openly and pragmatically, is an essential step toward improving access to justice in the province.