Personal Injury

Delays could come at a cost in Licence Appeal Tribunal hearings

By Paul Russell, AdvocateDaily.com Contributor

Unsuccessful parties may still be entitled to costs at Licence Appeal Tribunal (LAT) hearings if the other side acts unreasonably or unnecessarily delays the proceedings, says Ottawa personal injury lawyer Najma Rashid.

To illustrate that point, Rashid, partner with Howard Yegendorf & Associates LLP, points to two LAT decisions where the losing party was awarded costs.

In the first case, a man injured in two auto accidents asked to be declared “catastrophically impaired” and therefore entitled to enhanced benefits from his insurance company.

According to the adjudicator, it was agreed the parties would address causation by way of written submissions with a four-page limit on submissions, and do so within a week.

The injured man’s counsel met the deadline and kept the documentation within the limit, but the insurance company missed the deadline, then asked for more time and a larger submission threshold.

“The respondent insurance company kept going back to the tribunal for extensions, which issued six orders,” Rashid tells AdvocateDaily.com, noting the insurance company’s final submissions on causation tripled the amount that was initially authorized.

After ruling that the injured man was not catastrophically impaired, the adjudicator nevertheless ruled that he was entitled to $1,500 in costs since the respondent’s continuous delays were "unreasonable" — particularly since it was the respondent insurance company that had agreed to, and even suggested, the previous timeline and four-page limit on submissions.

"It caused [the applicant] — who is seriously impaired — a delay in receiving a decision by six months,” states the judgment.

The adjudicator continued that he did not “find that [the insurance company’s] acts were malicious or with any intention to harm … it’s the cumulative effect of many small actions regarding the submissions — coming from one party — that triggers the rule’s high standard.”

According to the judgment, Rule 19 of the LAT allows costs to be awarded if a party acts “unreasonably, frivolously, vexatiously or in bad faith” during the proceedings.

“Because costs are so hard to get at LAT proceedings, t, this is an access-to-justice issue,” Rashid says, explaining that in LAT hearings, costs are tied to conduct rather than the outcome.

“There aren't too many decisions that I'm aware of where costs have been awarded.”

The second case Rashid cites involves a woman who applied to her employer's insurance provider for income replacement benefits (IRB) after a major motor vehicle accident while she was on maternity leave.

The decision states, “the complicating factor is the fact that the applicant was on maternity leave at the time of the accident. She was receiving both Employment Insurance maternity leave benefits (EI) and a top up from her employer such that her total income at the time of the accident was similar to her income when she was working full-time.”

“The legal issues were whether she was entitled to income replacement benefits and if the insurance company can deduct 70 per cent of her EI benefits from the income replacement benefits,” says Rashid.

In preparation for the hearing, the woman arranged for two doctors to be on standby to give testimony over the phone about her condition, the judgment reads, but on the morning of the hearing, the insurance company suddenly agreed she was entitled to income replacement benefits.

After reiterating that he's permitted to assign costs if a party acted “unreasonably, frivolously, vexatiously, or in bad faith” during the proceeding, the adjudicator awarded the woman $1,000 to reflect the fact that she had to prepare her medical witnesses and have them ready to testify, and that she had to prepare to argue the issue of entitlement to income replacement benefits, when the only issue was whether the respondent insurance company was entitled to deduct her EI from the IRB itself.

In the judgment, the adjudicator wrote, “the question of the amounts to be deducted from the income replacement benefit was entirely a legal issue best addressed by an agreed statement of facts and written submissions. An in-person hearing was unnecessary in this case.”

“She lost, but given that she was awarded $1,000, that does send a message,” says Rashid. “In both cases, the amount of the costs is modest, but both are commentaries on the conduct of insurance companies that could attract costs even in a situation where an applicant is unsuccessful.”

Insurance companies not filing responses to applications or case conferences in a timely manner is not uncommon, says Rashid, who is not involved in either matter and comments generally.

“I have many files where a matter is delayed because of a slow response from the insurance company, so I think judgments like these do deliver a message,” she says. “The LAT is already backlogged, so unnecessary delays just makes things worse.”

“I have many files where a matter before the tribunal is delayed because of a slow or non-response from the insurance company, so I think judgments like these do deliver a message,” she says. “The LAT is already backlogged, so unnecessary delays can have a devastating impact on injured plaintiffs who are denied benefits."

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