Northern Exposure

Supreme Court Decides Legal Costs in Canadian Human Rights Tribunal Case

By Hadiya Roderique

The Supreme Court of Canada recently considered whether the Canadian Human Rights Tribunal has the authority to award legal costs to a successful complainant. As we noted in an earlier bulletin, this case could have major ramifications in human rights litigation across Canada.

Complaint

Donna Mowat brought a human rights complaint against her employer, the Canadian Forces, for discrimination on the grounds of sex. Mowat claimed compensation of $430,685 but ultimately was awarded only $4,000 plus interest.

The more interesting part of the decision, however, was the Tribunal’s response to Mowat’s request for legal costs in the amount of $196,313. The Tribunal awarded her $47,000 plus interest for legal costs – more than 10 times the $4,000 damages award!

This decision was all the more surprising as there is no reference to legal costs in the Canadian Human Rights Act. Rather, the Act refers only to the Tribunal’s ability to compensate a victim for “any expenses incurred by the victim as a result of the discriminatory practice.” This was the section on which the Tribunal relied.

Appeal
The decision of the Tribunal was upheld in a first judicial review. A further appeal resulted in the Tribunal’s decision being overturned. In respect of the cost award issue, the appeal court agreed with the Canadian Forces’ argument that without very clear language, the government couldn’t be presumed to have established a one-sided regime whereby only those filing complaints could recover legal costs.

Supreme Court
The Supreme Court of Canada (SCC) upheld the appeal court’s decision on the costs issue. The SCC ruled that the words “any expenses incurred by the victim,” in the context of the Act, can’t create a standalone category of compensation capable of supporting any type of disbursement connected to the discrimination. The SCC also held that the term “costs” has a well-understood meaning distinct from compensation or expenses. If the legislature had intended to include costs, it would have used that term.

The SCC reviewed the legislative history of the Act, the Canadian Human Rights Commission’s understanding of its costs authority, and parallel legislation in the provinces. This included the fact that there had been several unsuccessful attempts to amend the Act to grant the Tribunal the express power to award costs.

The SCC said that the potential to award legal costs in a potentially unlimited amount didn’t reconcile with the monetary limit of an award for pain and suffering or the lack of an express authority to award expenses under the Act. As a result, it ruled that the Tribunal doesn’t have the authority to award legal costs.

Conclusions

Costs won’t be awarded against federally regulated employers in human rights complaints. This case may also reduce the likelihood of costs being awarded in other jurisdictions where no references to costs are made in human rights legislation. Ontario, New Brunswick, and Nova Scotia are examples of that.

There are sound policy arguments both for and against allowing tribunals to award legal costs to successful parties.  Access to justice issues may point in one direction.  Assuring that parties don’t persist in taking frivolous positions through to a hearing may point in another. However, this case seemed to clearly target employers in a one-sided fashion. Employers can breathe a little easier.