Law Times

Law Times • February 24, 2014 Page 9 www.lawtimesnews.com Focus on Labour & Employment Law Strong backing for bill allowing HRTO costs awards Proponents say move would deter vexatious litigants, frivolous claims mployment lawyers are strongly backing a bill that would allow the Human Rights Tribunal of Ontario to award costs to suc- cessful parties. e move would deter vexatious liti- gants, lawyers say, as well as reduce pressure on employers to settle frivolous claims and improve access to counsel. But could it also act as a barrier to jus- tice by discouraging claims from vulner- able applicants? Bill 147, the Human Rights Code amendment act (awarding of costs), passed its first reading on Dec. 4, 2013. It would amend Ontario's Human Rights Code by allowing the Human Rights Tribunal of Ontario to award the costs associated with a legal proceeding. Without this power, "both employers and employees are being victimized by the process," says Stuart Rudner of Rud- ner MacDonald LLP. General damages awards rarely surpass $15,000 to $25,000, meaning successful applicants face the prospect of never fully recovering their costs, Rudner notes. At the same time, employers oen have to fight off a barrage of frivolous claims brought by applicants with noth- ing to lose financially. As a result, respondents sometimes pay a nuisance fee just to get rid of a claim early on before the legal bills start to pile up, says Sean Bawden of Kelly Santini LLP. "at creates cynicism regarding the le- gal system on the part of employers," he says. "e reputation of justice, and the be- lief that the system is fair, is crucially im- portant," he adds. A skeptic might suggest lawyers have an interest in the issue. Aer all, could some of them gain from a rule that makes respon- dents more likely to enter into a protracted battle at the tribunal and potentially encour- ages claimants to retain counsel on the basis that they may later recover their legal costs? But Arthur Zeilikman of Zeilikman Law says parties would be more likely to resolve disputes quickly with the threat of costs awards weighing equally on both sides' minds. "I think there's a real chance of them set- tling because parties are aware of then in- curring costs if they don't settle," he says. And maybe the added financial pressure could inject some much-needed realism into settlement talks. Allison Greene of Karimjee Greene LLP explains a problem familiar to many labour and employment lawyers: "e problem is that a lot of the time self-repre- sented litigants, because they're not given legal advice, are not coming into negotia- tions with realistic expectations. It makes it really difficult to settle." e 2012 Ontario human rights review written by employment lawyer Andrew Pinto pointed out that moving towards a human rights costs regime wouldn't be without precedent. British Columbia, Manitoba, Saskatch- ewan, Northwest Territories, Nunavut, and Yukon all provide for costs where claims are frivolous or vexatious, the report highlighted. Most of these jurisdictions have estab- lished this power through their human rights codes. In Alberta, Newfoundland and Labra- dor, Nova Scotia, Prince Edward Island, and Saskatchewan, human rights tribu- nals can award costs on a discretionary basis, the report noted. However, there's a dearth of evidence on whether these costs regimes are actu- ally effective, Pinto concluded. He warned: "e costs issue is an enor- mous challenge in the human rights sys- tem and unless it is approached properly, the costs of litigating human rights issues will continue to be a major consideration as to whether cases go forward." e Pinto report also raised the possibil- ity of costs awards discouraging applicants from coming forward. "e same could be said of small claims courts," says Bawden. "Do I think it's going to deter parties from bringing legitimate applications? I don't think so." He adds: "It'd be helpful if there was a reason for some applicants to have pause before launching applications." One of the practical arguments against human rights costs awards is that recovery would be impossible in many cases, particu- larly where applicants have lost their job. e likelihood of the tribunal ordering costs against self-represented litigants is un- clear from the bill, according to Greene. "Collection of costs is probably not real- istic in every case," says Bawden. "But that shouldn't be a reason to not have the power to award them. If they're of modest means, then that's a creditor's issue to deal with." Costs awards could also encourage em- ployers to take an aggressive stance against vulnerable applicants, says Doug MacLeod of MacLeod Law Firm. He illustrates the issue using the example of a workplace sexual harassment case in which a server makes allegations against a former boss. e server was earning minimum wage and hadn't been working there for long. No one else witnessed the harassment. e claim is worth only about $10,000. "In that kind of case, [the possibility of costs awards] could change the dynamic quite a bit," says MacLeod. Under the current rules, the employer might choose to spend $5,000 to make the claim go away. However, if there was a chance to re- cover costs from the server, employers may be more willing to "take their chanc- es" and fight the case at a tribunal and possibly add to the applicant's distress. "You could argue that these are the people who the code is set up to protect most: the most vulnerable people who don't have a lot of money and who don't have access to a lawyer," says MacLeod. On balance, however, he believes the tribunal should have the ability to award discretionary costs in order to avoid friv- olous complaints. One method could be to add a step to the summary hearing process whereby ad- judicators dismissing an application would have the option to declare it frivolous or vexatious. e tribunal could award the 'Do I think it's going to deter parties from bringing legitimate applications? I don't think so,' says Sean Bawden. 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