Volume. 7 Issue. 14 – April 19, 2023
Two weeks ago, we reported on Spiegel v Intact (20-000279) wherein the applicant was found to be liable to pay a maximum costs award. Perhaps not to be outdone, the Tribunal this week provides insight into conduct that would warrant a maximum costs award against a respondent.
LAT Update – What Difference Did A Year Make?
The LAT released Performance Stats up to mid-year 7 which is current through to the end of September 2022. Together with the LAT’s last update we can now provide a comparison of year over year, with projections through to the end of year 7 in this annual update. What difference did a year make?
Maximum Costs Award Against Respondent
Applicant Awarded $2K Costs – The hearing for 20-012739 v Belairdirect, commenced December 19, 2022, and during the first two days the Tribunal decided on a number of motions. One such being a request for an adjournment, which was denied, prompting the Applicant Ayaz to withdraw her application for dispute resolution.
One motion was brought by Ayaz contending there to have been improper redaction of log notes. Ayaz argued that it was “suspicious that numerous posts on a single date were redacted, that long paragraphs were redacted, that log notes were redacted for privilege long before an application to the Tribunal was filed and that log notes were redacted for internal conversations.”
After counsel for Belairdirect reviewed the individual redactions, it agreed to disclose 62 of the log notes, with a dispute arising on the remaining two.
One note was redacted for “privilege- internal discussions client and client”, Belairdirect arguing that “the note should be redacted for litigation privilege and that a conversation between two colleagues internally should be kept confidential.” The Tribunal ordered this note to be disclosed, citing the Court in Blank v. Canada that the purpose of litigation privilege “is to create a zone of privacy in relation to pending or apprehended litigation” and terminates when litigation on the issue ceases… litigation privilege should attach to documents created for the dominant purpose of litigation.”
The Tribunal could not “see how the log note was created for the dominant purpose being litigation considering the application for dispute resolution was not filed until 18 months later… This log note pertains to the adjusting of the non-earner benefit and at that time the benefit had not been denied. Therefore, I cannot see how the respondent could have anticipated litigation considering the issue had not yet been denied.”
The second contested note referenced a discussion between Belairdirect and counsel regarding an OCF-19 submitted for a catastrophic determination. This note however was found to have been properly redacted, as “I have no knowledge of a law that prevents an insured from speaking to their lawyer regarding benefits. Also the claim was already in litigation at that time, so it is reasonable that an insured may choose to speak to counsel.”
Ayaz further argued that redactions for “reserve discussions” were not proper, as the Court has confirmed this referred only to the number. Belairdirect argued that “there is more to reserve discussions than just a number.” The Tribunal agreed that Belairdirect “has properly redacted the log note. The respondent may redact for reserve and reserves discussions if it does not pertain to a benefit being adjusted. In this case, it does not.”
Ayaz also brought a motion for costs. It was noted that an earlier motion was successful when Belairdirect had not complied with an order to produce log notes, with both a motion to produce being made, as well as a cost award ($200) against Belairdirect. Ayaz contended that “improperly redacting the log notes created a time-consuming and unnecessary process.” Belairdirect countered that costs had already been awarded, and that the earlier order anticipated that dispute would arise with respect to the notes provided, as the order states that if they did, it could be brought to the hearing adjudicator.
The Tribunal found that “the conduct of the respondent was a serious breach of the Tribunal’s order and meets the high bar of bad faith. The actions on behalf of the respondent were a gross violation of trust between officers of the court…in the end, the respondent has a serious responsibility to properly redact the log notes. The actions taken by the respondent were an abuse of power.”
Further, that Belairdirect “had all knowledge to know whether a log note should be redacted, and the applicant had to trust that the redactions were fair and appropriate. The Tribunal and counsel wasted countless hours pouring through the log notes, only to have two log notes in dispute. The respondent agreed that 62 log notes were improperly redacted and agreed to disclose them. Had someone cared to look at the redactions and truly analyze them in advance of the disclosure deadline, it could have saved both the applicant and the Tribunal two hearing days.”
It was also found that Belairdirect “improperly redacted log notes for “client-to-client” discussions, indicating it was a form of privilege.” Ultimately, the conduct of Belairdirect “interfered with the Tribunal’s ability to carry out an efficient hearing. I find the conduct prejudiced the applicant because it withheld information contained in the log notes that might be necessary for arguing her case.” It was noted that “It is rare that an adjudicator is faced with misconduct to this degree.” Therefore, “I agree with the applicant and award costs in the amount of $2,000.00.”
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