In a recent LAT decision, the adjudicator was unfavorably “shocked” at an insurer’s conduct toward its insured. Let’s talk about what went so terribly wrong in this motion to dismiss an application.

The applicant in this case was a visually impaired senior citizen who does not speak English and was injured in an accident.  He pursued denied benefits before the LAT. After the written hearing was scheduled, the applicant’s lawyer died.

There were months of delay, and two adjournments of the written hearing, as the applicant sought and retained new counsel.

The insurer brought a motion to dismiss the application as abandoned, due to 5 months of “silence” from the applicant. The applicant’s new counsel responded to the insurer within a month of the motion filing. The insurer refused to abandon its motion.

The insurer’s motion was dismissed.

In awarding costs to the applicant, the adjudicator did not mince words. He noted, in bolded and underlined typeface, the age, disability and language barriers of the applicant, highlighting the applicant’s particular vulnerabilities. He noted that he was “shocked” that the insurer continued to the proceed with the motion, in the circumstances, and found the insurer acted in bad faith and interfered with the efficient, effective hearing process.  

The authority to grant costs is found in s. 17.1 of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 (SPPA). and Rule 19.1 of the LAT Rules. 

Section 17.1(1) of the SPPA permits a tribunal to order a party to pay all or part of another party’s costs in a proceeding in circumstances set out in that tribunal’s rules.

Section 17.2(2) of the SPPA narrows the circumstances in which costs are payable where “the conduct or course of conduct of a party has been unreasonable, frivolous or vexatious or a party has acted in bad faith.”

Rule 19.1 provides the circumstances for requesting costs at the LAT, mirroring the language of the SPPA: “Where a party believes that another party in a proceeding has acted unreasonably, frivolously, vexatiously, or in bad faith, that party may make a request to the Tribunal for costs.”

Rule 19.5 also provides that in deciding whether to grant costs and the amount of costs to be ordered, the Tribunal must consider “all relevant factors” including:

  • the seriousness of the misconduct;
  • whether the conduct was in breach of a direction or order issued by the Tribunal;
  • whether or not a party’s behaviour interfered with the Tribunal’s ability to carry out a fair, efficient, and effective process;
  • prejudice to other parties; and
  • the potential impact an order for costs would have on individuals accessing the Tribunal system.

This case offers a stark reminder to insurers, who must balance the duty of good faith owed to insureds, with tactical and strategic decisions in an adversarial process: It does not always pay to capitalize on vulnerability.

The LAT is not a winner at all costs model. Cases like this highlight the reputational consequences of disregarding the duty of good faith in a quest for victory.

This case is also interesting in that it demonstrates how the personal characteristic of applicants are relevant in the consideration of costs. The adjudicator implied strongly that his decision was swayed by the barriers faced by the applicant, in pursuing his claim. 

To date in 2021, the LAT has explicitly grappled with whether to award costs in more than 50 decisions. This is only the second costs award against an insurer in 2021. Here’s to abundant good faith, between Applicants and insurers alike, as we enter the last quarter of 2021.

See Ahmed v Aviva Insurance Company, 2021 CanLII 69266 (ON LAT)


  • Caroline Meyer

    The great granddaughter of a distinguished Haitian lawmaker, Caroline decided to become an insurance defence lawyer. Leaving her hometown of Montreal, she lived in Texas and actually spent time on Death Row. She escaped and lived in Australia and Italy, where she learned how to bake a mean lasagna (in Italy, not Australia).