The recent Thompson v. Intact Insurance[1] decision of the License Appeal Tribunal (the “Tribunal”) confirmed the Tribunal’s jurisdiction over costs on an issue resolved in advance of the case conference. The Tribunal looked to both the LAT Rules of Practice and Procedure[2] (the “LAT Rules”) and the Statutory Powers and Procedure Act[3] (the “SPPA”) for their authority to award costs.

Mr. Thompson claimed accident benefits following his accident of October 26, 2011. An OCF-18 for psychological services was denied by his insurer, Intact Insurance. After an application to the Tribunal was filed, and in advance of the case conference, Intact agreed to pay for the disputed services following the receipt of updated supporting records; Mr. Thompson accepted Intact’s offer and raised the issue of costs.

At the scheduled case conference parties advised the adjudicator that they had previously agreed to settle the substantive dispute however the issue of costs remained outstanding. A preliminary issue hearing was scheduled which resulted in the instant decision. The Tribunal ruled that it had jurisdiction to consider costs despite the original dispute being settled before the case conference.

Costs in the LAT

The SPPA s. 17.1(1) and Rule 19.1 both allow a party to make requests to a Tribunal for its costs only where actions are unreasonable, frivolous, vexatious or in bad faith.

The previous FSCO regime[4] echoed the broad discretion of the Superior Court in allowing costs. No negative findings were required to justify same. Section 282(11) of the Insurance Act could have continued discretionary costs in insurance litigation after matters stopped being accepted by FSCO, however its recent repeal in conjunction with Rule 19’s requirement of unfavourable conduct eliminates any ability to award costs without said conduct.

Jurisdiction Where the Main Issue is Resolved

It was held that first, the costs issue must be raised in a “proceeding” to be within the ambit of the Tribunal’s jurisdiction. The Tribunal reasoned that as a proceeding commences on submission of the application and concludes on the resolution of all issues in dispute between the parties, their jurisdiction extended to the unresolved issue of costs. Thompson accepting Intact’s approval of the treatment plan, the main issue, did not resolve the secondary issue of costs.

The issue of costs will remain outstanding where: a) there is no withdrawal; and b) the issue of costs is associated with the main action.

It was not explicitly resolved whether costs need to be directly raised to the attention of the other side prior to applying to the Tribunal and if so, when this issue must be raised. The wording of the decision suggests that Thompson raised the issue of costs at the same time as he accepted the treatment plan approval[5]. It is unclear whether raising costs in the same conversation that resolves the main issues is mandatory, or whether it may be raised subsequently so long as it is before withdrawal.

The Tribunal’s justification of confirming jurisdiction was that costs were related to the main issue and not a “stand-alone issue.” It is yet to be seen whether a costs issue raised after the confirmation of settlement but before the withdrawal of the application will be considered “stand-alone.”

Thompson v. Intact resolved the issue of the Tribunal’s ability to award costs to settled matters, but the logistics of how this will play out in future decisions is yet to be seen.