Redefining LAT Costs Awards pursuant to Rule 19 of the Common Rules of Practice and Procedure by Justine Lee Young

Feb 17, 2021

In the recent decision Corpuz v Aviva General Insurance, 2021 ONLAT 19-014198/AABS, the LAT provided some guidance surrounding circumstances in which the Tribunal will award costs where a party in a proceeding has acted unreasonably, frivolously, vexatiously, or in bad faith pursuant to Rule 19 of Common Rules of Practice and Procedure (“Common Rules”).

Vice-Chair, Theresa McGee, made a costs award under Rule 19 against the Applicant for conduct amounting to bad faith.

The Law

Under Rule 19 of the Common Rules, the LAT may award costs where a party in a proceeding has acted unreasonably, frivolously, vexatiously, or in bad faith.

Under Rule 19.5 of the Common Rules, the Tribunal shall consider the following factors when deciding to order costs:

  1. the seriousness of the misconduct;
  2. whether the conduct was in breach of a direction or order issued by the tribunal;
  3. whether or not a party’s behaviour interfered with the tribunal‘s ability to carry out a fair, efficient, and effective process;
  4. prejudice to the other parties; and
  5. the potential impact and order for costs what have on individuals accessing the tribunal system. 

History of the Proceedings

The Applicant was rear-ended in an automobile accident on December 23, 2015. He sought benefits from his insurance company, Aviva General Insurance, pursuant to the Statutory Accident Benefits Schedule (“the Schedule”) but was denied. He applied to the LAT to determine whether  he was entitled to (1) $2,456 in chiropractic services, (2) $1,997.29 in psychological assessments, (3) interest on overdue benefits and (4) an award for unreasonably withheld payments.

The Tribunal’s Decision

The Tribunal found the Applicant failed to demonstrate entitlement to the benefits he sought. There was a lack of objective medical evidence to show the treatment and assessment in dispute were reasonable and necessary. Since no benefits were owing, there was no interest payable and no basis for an award. 

With respect to the psychological assessment and chiropractic services, the tribunal found the Applicant did not meet his evidentiary onus in establishing the necessity of these services to treat his accident-related impairments. There needs to be objective medical evidence to substantiate the entitlement to any benefit. A treatment plan in itself is not objective evidence. An applicant’s evidentiary onus is therefore not discharged by relying on the treatment plan itself.

Importantly, the tribunal emphasized that under s.44 of the Schedule, the insurer has a right to request Independent Examinations (“IEs”) to assist in determining entitlement to benefits - provided they are not made more often than is reasonably necessary. There is nothing improper in exercising section 44 rights to evaluate a request to fund an assessment.

In his submissions, the Applicant alleged a 21-month delay by the insurer in responding to a treatment plan and arranging the corresponding section 44 assessment. However, to support his position, the Applicant submitted conveniently redacted emails and appeared to conceal important portions of communications with the insurer. The un-redacted evidence revealed that the Applicant was misstating and misrepresenting the facts that showed the insurer’s efforts to move the matter along.

The Tribunal stated that misrepresenting evidence in a Tribunal proceeding is serious and should be strongly discouraged. The Respondent was prejudiced by having to present evidence and arguments to counter the Applicant’s inaccurate submissions and evidence. Such behaviour interferes with the tribunal’s ability to carry out a fair, efficient and effective process in resolving disputes on their merits.

In determining an amount for costs, the Tribunal balanced the need to discourage unreasonable, frivolous, vexatious or bad faith conduct in litigation against the real world impact of costs penalties on those accessing the Tribunal system.

Emphasis was placed on the impact the costs would have on the individual applicant. Individual applicants in proceedings such as this usually leave it to the legal professionals they hire (i.e. the lawyers) to use their judgement in handling their claims. This usually also extends to the evidence that is presented to the Tribunal on their behalf. It was therefore the lawyer, and not the individual Applicant himself, who was responsible for submitting the false information to the Tribunal. 

Considering that it would be the Applicant himself who would be liable to pay for the bad faith conduct of his lawyer, the LAT awarded a modest amount in costs. As such, the application was dismissed and the Applicant was ordered to pay a $100.00 costs award to the insurer.

Justine Lee Young is an articling student at ZTGH and author of this blog. If you have a question about this decision please reach out to Justine at 416-777-2811 Ext. 5594 or counsel for the insurer in the subject decision, Matthew Owen at 647-427-3338.

Add Comment