The issue of whether successful complainants are entitled to recover legal costs in human rights proceedings has been a matter of dispute in recent years. This has resulted in conflicting decisions from adjudicators interpreting human rights legislation in various jurisdictions. Typically, the question of whether costs can be awarded to a complainant is a matter of statutory interpretation, and the outcome is a result of the specific language contained in the human rights statute under review.

Last week, the Supreme Court of Canada (SCC) confirmed that the Canadian Human Rights Tribunal (CHRT) did not have authority to award legal costs to a complainant, under the provisions of the federal statute.1

THE LOWER LEVEL DECISIONS

The Mowat decision involved a sexual harassment complaint filed by an employee of the Canadian Armed Forces. The CHRT found that the complaint had been substantiated in part, and awarded the complainant $4,000 plus interest for “suffering in respect of feelings or self respect”. She was also awarded $47,000 plus interest for legal costs, which represented a portion of the actual legal costs she claimed to have incurred. The CHRT found that it had jurisdiction to make the award for legal costs, pursuant to section 53(2)(c) of the Canadian Human Rights Act (the Act ), which permits the tribunal to compensate victims for “…any and all wages that the victim was deprived of and for any expenses incurred by the victim as a result of the discriminatory practice.”

The employer applied for judicial review of the CHRT’s decision to the Federal Court. Adopting a deferential standard of review, the Federal Court considered whether the CHRT’s decision was reasonable. In the Federal Court’s view, section 53(2)(c) of the Act was broad enough to confer upon the CHRT the power to award legal costs. As such, the Federal Court concluded that the CHRT’s decision was reasonable.

The Federal Court of Appeal took a significantly different view. First, the Court of Appeal noted that the question of jurisdiction to award legal costs was a matter of general law which has central importance to the legal system as a whole. It also found that the proper interpretation of section 53(2)(c) of the Act did not require any human rights expertise to decide. As such, the Court of Appeal determined that the CHRT’s decision was to be reviewed on the standard of correctness.

Turning to the merits of the case, the Court of Appeal concluded that section 53(2)(c) of the Act could not be interpreted as granting the CHRT the power to award legal costs. In reaching this conclusion, the Court of Appeal made a distinction between “expenses” and “costs”, noting that the latter has specific meaning as a legal term of art. Further, the Court of Appeal went on to note that in jurisdictions where human rights tribunals have authority to award legal costs, their enabling statutes refer specifically to such powers. In the absence of such specific wording in the federal Act, the Court of Appeal found that the CHRT did not have jurisdiction to award legal costs. Had Parliament intended to confer such power upon the CHRT, it could have done so explicitly.

THE SCC’S DECISION

The SCC determined that the Federal Court of Appeal had applied an incorrect standard of review, but nevertheless agreed that the Court of Appeal had come to the correct decision in finding that the CHRT did not have authority to award costs.

The SCC concluded that the appropriate standard of review was reasonableness. In that regard, the highest court reasoned that whether the CHRT had authority to award costs was a question of law located within the core function and expertise of the Tribunal and which related to the interpretation and application of its enabling statute. It was neither a question of jurisdiction, nor was it a question of law of central importance to the legal system as a whole, falling outside the Tribunal’s area of expertise. As a result, more deference was accorded to the CHRT’s decision.

Regardless, the SCC concluded that the CHRT’s interpretation of the federal Act was unreasonable, when considering the language of the provisions, and their context and purpose. When read in their statutory context, section 53(2)(c) of the Act could not reasonably be interpreted as creating a stand alone category of compensation (i.e. legal costs) particularly, when the term “expenses” was repeated in the following section in relation to a different type of compensation. In addition, the SCC reasoned that had Parliament intended to confer authority to award costs on the Tribunal, it would have used the familiar and widely used legal term of art, “costs”, to confer such authority.

The Supreme Court of Canada concluded that the Tribunal had adopted a “dictionary meaning” of expenses rather than engaging in “an interpretive process taking account of the text, context and purpose of the provisions in issue.”2

The SCC’s decision in Mowat has clarified that in order for human rights legislation to confer tribunals with the authority to award costs to successful complainants, the enabling statutes will likely be required to make reference to legal “costs” as a specific type of remedy. While deciding only the narrow issue of whether the CHRT has jurisdiction to award legal costs, the Mowat decision is also likely to be binding in other jurisdictions which contain compensatory provisions similar to the federal Act. A conclusive finding that legal costs cannot be recovered in human rights proceedings will no doubt have a significant impact upon whether complainants will seek legal counsel, and the manner in which such complaints are litigated.