Ontario's Superior Court has overturned an arbitrator, ruling that COVID-19 emergency laws automatically froze the 90-day notice clock in insurance priority disputes.
In a decision released on February 27, 2026, Justice L. Shaw sided with Echelon Insurance Company in its appeal against Zenith Insurance Company, breathing new life into a priority dispute that had been tossed out at arbitration. The case - Echelon Insurance v. Zenith Insurance Company, 2026 ONSC 1214 - centres on a question that many Ontario auto insurers dealing with pandemic-era claims will find familiar: did the province's emergency legislation pause the strict 90-day window for notifying a rival insurer of a priority dispute?
The facts trace back to a motor vehicle accident on July 9, 2020, in which a 19-year-old college student was injured as a passenger. She filed for accident benefits with Echelon. Through its investigation - which included an examination under oath - Echelon concluded that the claimant was financially dependent on her mother, whose auto policy was with Zenith. Echelon served Zenith with a notice of priority dispute on December 8, 2020.
The problem: under Ontario's Disputes Between Insurers regulation (O. Reg. 283/95), that notice had to go out within 90 days of receiving a completed application. Echelon missed that window on either possible start date.
Echelon's argument was straightforward. When the Ontario government enacted emergency regulation O. Reg. 73/20 in March 2020, it suspended all limitation periods retroactive to March 16. Echelon said the 90-day notice deadline qualified as a limitation period and was therefore automatically frozen until the regulation was revoked on September 14, 2020. Under that math, Echelon still had time.
Arbitrator Bialkowski saw it differently. He treated the 90-day notice requirement as a procedural step - not a limitation period - which meant the suspension was discretionary, not automatic. Finding no evidence that the pandemic actually hampered Echelon's ability to investigate, he dismissed the claim.
Justice Shaw disagreed. While acknowledging that notice periods and limitation periods are technically distinct, the court found that in practice, they work the same way: miss either one, and the claim is dead. Drawing on the Ontario Court of Appeal's reasoning in Bannon v. Thunder Bay (City), the court noted that statutory notice requirements have been called "a limitation period within a limitation period." Given the emergency regulation's purpose - protecting substantive rights during an unprecedented shutdown of the justice system and daily operations - the court concluded the 90-day notice provision should have been automatically suspended.
The court was careful to note that this interpretation applies only within the narrow window of the temporary COVID-19 regulation. It does not turn every notice provision into a limitation period going forward.
Echelon's priority dispute claim has been reinstated. The decision, however, could still be subject to further appeal.
