Availability of cost awards in the human rights context

28 June 2021

Courts in Canada, including those in Alberta, British Columbia, and Ontario, will generally award a successful party a portion of their incurred legal fees – referred to as "costs." Cost awards can be significant and are therefore a useful tool to deter frivolous and vexatious litigants.



Notwithstanding the clear utility that these awards have, their availability changes in the human rights context. Specifically, each Canadian jurisdiction has different rules governing if, or when, a tribunal can award costs. For example, while some provincial and territorial human rights legislation offers discretion to award costs, others limit these awards to instances involving only egregious conduct. In further contrast, certain provincial human rights legislation is entirely silent on cost awards.

These limitations on cost awards regularly leave even successful parties without a means to recoup their often significant legal expenses. These limits are often justified as a means to prevent a chilling effect on legitimate human rights complaints. However, when combined with the nominal barriers to filing a human rights complaint, the restraint on issuing costs results in there being minimal deterrence to those who abuse the human rights process.

Awarding costs where there is evidence of egregious or improper conduct or abuse of process

Alberta

Section 32(2) of the Alberta Human Rights Act grants the Alberta Human Rights Commission (the "AHRC") wide discretion to awards costs that are "appropriate."[1] In a recent AHRC decision, Facey v Bantrel Management Services Co, the AHRC assessed the scope of this discretion.[2] In Facey, the complainant claimed that the respondent discriminated against him based on race or colour, and that he received lesser compensation than others in the same position. He also claimed his supervisors treated him differently and terminated his contract prematurely.

The AHRC ultimately dismissed the complaint, as it could not overlook the complainant's repeated testimonial inconsistencies, which were often contrary to the documentary evidence provided by the respondent. Further, although the AHRC concluded that the complainant likely did not file the complaint with malicious intent, it held that the complainant likely created the "baseless allegations" and reckless personal attacks in an effort to "shore-up his allegation that the termination was race-related."

Accordingly, the AHRC issued a significant costs award of $20,000 against the complainant for his 'improper conduct', finding that he had behaved recklessly and contemptuously towards the respondent, attempted to deceive the AHRC, forced the respondent to unnecessarily prove facts that should have been admitted, and made unsubstantiated allegations of reprehensible conduct against the respondent's staff. Further, the complainant's behavior significantly lengthened the hearing and expenses for its preparation. In fact, the respondent testified to spending well over $250,000 to defend the complaint, and a significant portion of this expense was attributable to the complainant's improper conduct. Accordingly, the AHRC refused to condone the complainant's "dishonest and misleading behavior" and held that this exceptional case warranted costs.

Shortly after the Facey decision, the AHRC elaborated on the basis to receive 'significant costs' in Alberta. In Kahin v Construction & General Workers' Union, Local 92,[3] following the dismissal of the initial complaint, the respondent applied to the AHRC for costs against the complainant. In dismissing the application, the AHRC affirmed the general proposition that a tribunal in Alberta should only exercise its discretion to award costs where a party engages in 'improper conduct'; meaning, costs are not appropriate simply via the dismissal of a complaint or an unfavorable credibility assessment. However, the AHRC clarified that "significant" cost awards are only appropriate where a party engaged in an abuse of process.[4] The AHRC then highlighted that this includes instances where conduct is significantly prejudicial to another party or the integrity of the process, or behavior that constitutes dishonest conduct in the proceedings.

British Columbia

Similarly, under subsection 37(4) of the British Columbia Human Rights Code,[5] the British Columbia Human Rights Tribunal (the "BCHRT") can award costs where a party engages in 'improper conduct' during the course of a complaint. This issue recently arose in Sull v PayPal Canada Co.[6] The complainant in that case had filed a complaint with the BCHRT alleging that a PayPal customer service employee discriminated against him by using a racial slur when the complainant called to address an issue relating to his PayPal account.  However, the respondent routinely records its calls with customers, and provided transcripts establishing that no racial slur or any other inappropriate behaviour occurred during any of the calls with the complainant. Accordingly, the BCHRT dismissed the complainant's complaint and considered the respondent's application for costs.

During submissions on costs, the complainant did not dispute that he knew his allegation was false. In fact, the respondent was able to provide the BCHRT with written correspondence received from the complainant confirming that he did not actually believe he had been discriminated against and that he was effectively using the human rights process as a low-cost means of settling the dispute with the respondent relating to the freezing of his PayPal account.  As such, the BCHRT particularized his actions as displaying a lack of good faith in filing, deliberately misusing limited BCHRT resources, and showing a clear underlying motivation to attempt to use the human rights process as a means of extorting settlement from the respondent. Accordingly, the BCHRT held that the complainant's actions fundamentally evinced the requisite 'improper conduct' necessary under subsection 37(4) for a costs award in favour of the respondent, and awarded the respondent $2,000 in costs.

The BCHRT noted that the purpose of a costs award in the human rights context is punitive and "…aims to deter conduct that has a significant and detrimental impact on the integrity of the Tribunal's process."  It is not intended to compensate the wronged party. The BCHRT arrived at the relatively low costs award in this decision on the basis that the complaint was dismissed at an early stage due to readily available call transcripts, and the complainant's testimony that he would be unable to pay a higher award as he was a small business owner that had been heavily affected by the COVID-19 pandemic (although the BCHRT came to this conclusion without requiring the complainant to provide any evidence to support it).

The conduct in Sull was particularly egregious.  This was an exceedingly clear case of bad faith conduct and misuse of resources.  According to the BCHRT, "It perpetuates a very harmful perception that the Tribunal's process can be used as a tool to extort respondents, with little to no risk to complainants."[7] Yet, the costs award was very low, particularly based on prior costs awards made by the BCHRT which have been as high as $32,000[8], and well below what most respondents would pay to defend a complaint. However, the BCHRT clearly took a more compensatory approach when it noted that the respondent was able to quickly and concretely address the complainant's allegations through the use of call transcripts and written correspondence with the complainant, resulting in a relatively low legal bill of $5,000. 

Ontario

In Ontario, the human rights tribunal does not have the express authority to award costs under the Human Rights Code.[9] While Ontario used to have the ability to award costs where a dismissed complaint was frivolous, vexatious, or made in bad faith, or where undue hardship was caused,[10] this power was removed in 2008 when the Human Rights Code Amendment Act, 2006 came into full force.[11]

Consequently, Ontario remains bound by the Supreme Court of Canada's ruling in Canada (Canadian Human Rights Commission) v Canada (Attorney General) ["Mowat"],[12] where it stated a human rights tribunal cannot order costs without an express grant from Parliament.[13]

Notably, a Private Members bill introduced by Progressive Conservative MPP Randy Hillier in 2013 sought to address this issue. Bill 147 would have granted the Tribunal the discretionary power to award legal costs against an unsuccessful party, a power granted to human rights tribunals in other Canadian jurisdictions.[14] While the Bill passed first reading in December 2013, it never progressed further.

Since Bill 147, there do not appear to be any proposed legislative changes addressing cost awards at the Human Rights Tribunal of Ontario ("HRTO"). Until new legislative amendments are proposed, litigants will not be deterred from filing frivolous applications with the HRTO.

Federal

In the 2011 decision of Mowat, the Supreme Court of Canada held that on a proper interpretation of the Canadian Human Rights Act[15] ("CHRA") the Canadian Human Rights Tribunal ("CHRT") lacked the jurisdiction to grant an award of costs.[16] Consequently, for federally-regulated entities subject to the CHRA, it has been widely accepted for nearly a decade that cost awards are outside the authority of the CHRT. Yet, a recent CHRT decision reveals that there are some unique situations where the CHRT may nevertheless permit similar awards.

Specifically, in the 2019 decision of First Nations Child & Family Caring Society of Canada et al. v. Attorney General of Canada (representing the Minister of Indigenous and Northern Affairs Canada)[17] ["First Nations Child & Family"] following an earlier determination by the CHRT that the respondent had failed to adhere to its disclosure obligations, the CHRT was tasked with addressing a subsequent motion for costs by the complaints. In particular, the CHRT found that while an adjudicative decision-maker may, per Mowat, lack the jurisdiction to award legal costs, it may nonetheless possess an inherent authority to control its process and in turn remedy abuse. Consequently, the CHRT concluded that although it was bound by Mowat, this did not restrict it from exercising its inherent authority to control its process,[18] and thereby require a one party to reimburse another for expenses incurred as a result of abusive or obstructive behavior. Practically speaking of course, this amounts to the CHRT granting costs, but only in and so far as they constitute "expenses necessarily incurred by a party as the result of abusive or obstructive conduct by an opposing party."[19]

As such, this decision demonstrates that the CHRT takes the position that there is distinction between costs for obstruction of process and legal costs generally; and it indicates that obstructing the tribunal process may itself warrant the issuance of a costs award by the CHRT.

Takeaways for employers

For jurisdictions such as BC and Alberta, this article serves as a reminder to counsel that you can seek costs from the human rights tribunal where there is evidence of an improper complaint, or an opposing party acts inappropriately during the course of the proceedings. While the ability to claim such costs from the Federal CHRT remains somewhat unclear and undeveloped, the decision in First Nations Child & Family provides the basis for a claim for costs in situations where expenses were incurred due to abusive or obstructive conduct. Unfortunately however, in Ontario where the human rights tribunal is unable to award costs, there is no ability to seek recovery for even egregious behavior by a party, subject to a decision akin to First Nations Child & Family. Unless or until that occurs, given the potential costs of dealing with a human rights complaint, there is a significant need for legislative amendments to allow successful parties in these jurisdictions to claim for costs from the human rights tribunal. If the respective governments are not willing to make the necessary legislative amendments, then changes must be made to the filing, screening, and/or hearing process to prevent parties from incurring significant legal costs resulting from improper use of the human rights process.  Otherwise, there appears to be no disincentive to the filing of meritless or abusive claims. 

If you would like to discuss this article further or have any questions, please contact a member of our Employment, Labour & Equalities Group.

This article was prepared with assistance of Nicole Hilliard, an articling student in our Ottawa office.


[2] Facey v Bantrel Management Services Co, 2019 AHRC 4; affirmed per Facey v Bantrel Management Services Co, 2020 ABQB 2209.

[4] Ibid, at para 12.

[6] Sull v PayPal Canada Co, 2020 BCHRT 175; with additional reasons per Sull v PayPal Canada Co (No 2), 2020 BCHRT 210.

[7] Ibid at para. 19.

[8] See e.g. Hendrickson v. Long & McQuade Ltd., 1999 BCHRT 35

[13] Ibid.

[16]  Mowat, supra note 12 at para 64.

[18] Ibid at para 26.

[19] Ibid at para 25.


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