The License Appeal Tribunal is Unfair to Self-Represented Litigants

Our blogger this week is Consumer Advocate Barbara Captijn. Barbara has been an SRL at the License Appeal Tribunal (LAT), and has accompanied other SRLs as a friend to their hearings over the last 9 years. She contributed to Ontario Ministry of Consumer Services consultations on warranty reform in 2017-20, as well as the Justice Cunningham Tarion review, and the Auditor General’s report, as an independent consumer advocate on a volunteer basis. Barbara also blogs at www.consumersreformtarion.com. You can find her on Twitter at @ReformTarion and @ONTConsmrRights.

You’ve finally saved enough and managed to buy a new home. But after you move in, you find construction defects. What do you do?

All new home buyers in Ontario have to buy a warranty through the Tarion Warranty Corporation (Tarion), an agency of the provincial government. If this agency denies your claim – for a leaking roof, for example – your way to appeal Tarion’s decision is through the tribunal system, the License Appeal Tribunal (LAT).

Tribunals are supposed to be a less formal and legalistic process than other courts. However, this is not the experience of the many SRLs who try to use the tribunals without representation (SRLs are common across the tribunal system, with numbers between 30-70%). Most SRLs lose their cases.

But even if you lose, you might accept this if you thought it was a fair process, and were given every opportunity to make your case. Unfortunately, this is often not the case at the LAT.

Here’s why facing Tarion on the other side at the LAT is unfair for self-represented litigants (SRLs)

1) Much is at stake, and it’s personal. An opposing lawyer said to a stressed and fearful homeowner during a hearing I attended: “This isn’t personal”. But it is personal to the homeowner. To lawyers, we may be just another file. For the consumer, a home is his life savings, and his family’s safe place, and if he finds he didn’t get what he paid for, a home free of construction defects, this can be devastating.

The emotional involvement of the SRL is a negative factor, and the reason people hire lawyers in the first place. But paying for lawyers and engineers often cancels out any settlement one may hope to get. And you still need to fix the defect, a leaking roof or inadequate heating.

Tarion is the homeowner’s adversary at the LAT. They have unlimited resources for lawyers, and whatever technical experts they want. SRLs often find it difficult to find law firms who don’t already have a builder or Tarion as a client, and are therefore in a conflict of interest. Technical experts are also reluctant to testify for consumers against big builders or a government monopoly. Advantage Tarion.

2) Most SRLs are not familiar with legal terminology, complex procedures, or case law. They don’t have cross-examination skills, know how to formulate non-leading questions, or understand “objections” – all of which limits their ability to make their case. One consumer made the innocent mistake of not addressing the adjudicator as “Madam Vice-Chair”, then walking behind her podium to give documents to opposing counsel. These innocent slip-ups were treated by the adjudicator as an affront to her authority.

Adjudicators have no specialist construction knowledge. Tarion knows the rules and holds the cards, while the SRL, no matter how well-prepared, experiences an uneven playing field. Advantage Tarion.

3) Consumers have the burden of proof in a highly technical matter. The builder may join as an “Added Party” on Tarion’s side. Their interests are aligned to get the claim dismissed. If the claim is defeated, neither Tarion nor the builder has to pay the cost of repairs, and the builder walks away with a clean track record.

This means that legal strategizing takes place between Tarion and the builder’s lawyers, behind closed doors, and this is often kept from the homeowner.

This is a surreal experience for many consumers, and often leaves them seeing the system as rigged. There are no clear guidelines to address the conflict of interest between Tarion’s obligation to the consumer and its alignment with the builder. Advantage Tarion.

4) The consumer is often prevented from bringing a friend to pre-hearings or case conferences, if Tarion objects. Spouses are often prevented from helping each other to present their case, if only one of them is officially on the home ownership title. This isolates and intimidates an SRL even further. Advantage Tarion.

5) LAT adjudicators usually have no construction knowledge. How can they rule on the cause of a cracked foundation or a leaking ceiling? The homeowner has little access to top experts, and no cross-examination experience in drawing out facts from technical experts, many of whom are coached by Tarion or have previously testified for them. Advantage Tarion.

6) LAT’s Rules of Practice are written for legal professionals, and are not in plain language for the benefit of SRLs. There’s no duty counsel on staff at the LAT to answer procedural questions or advise on the right forms to use (for example, for a subpoena). Advantage Tarion.

7) Retainer fees for legal assistance are often as much as $20,000 which is impossible to pay for most new home buyers, or seniors who thought a new home would be worry-free for their retirement. Why would a top engineer testify pro bono for a senior who is self-representing when he could testify for a large government agency, get future work from them, and be well-compensated?

Tarion has unlimited funds for lawyers and a full in-house legal department. In fact they spent $14 million on legal costs between 2008-13. Advantage Tarion.

8) SRLs who complain about the process can face cost penalties for “vexatiousness” and “abuse of process”. One SRL, Jeffry Ferland, complained that he felt that the Panel Chair was biased against him. The Chair herself then considered the parties’ submissions, decided that Ferland had not proved that she was biased (and Tarion said they did not think she was…) and awarded costs against him of $1000. Advantage Tarion.

Why is no one listening?

A solution? Independent dispute resolution, and independent technical experts, paid for under the warranty. This is the system in B.C. and Alberta, which has a multi-provider warranty model, not a monopoly as we do in Ontario.

Politicians have been unwilling to change the Tarion legislation and allow competition among warranty providers, despite the strong recommendations of Justice Cunningham in his 2017 Tarion review. Why? Seems the building industry thinks the current system works just fine. For them it does. But the intention of the Tarion legislation is consumer protection, not builder protection.

Consumers should not be sent to an already overburdened tribunal dealing with a wide range of Ontario legislation, and no specialist knowledge in construction. Many consumers have lost trust in the LAT, and are taking their cases to other courts for breach of the builder’s contract. A further burden on the courts.

This is a relatively easy problem to fix, as long as the focus is on consumer protection, and not on protecting a government monopoly, big industry, or the legal establishment. We can’t stand by and wait for another homeowner suicide (I wrote about the tragic case of the late Earl Shuman in my 2016 blog), or the needless financial and emotional nightmares this complex system creates for consumers.

A global pandemic has forced the legal profession to rethink many of its services. This is an area in dire need of a serious rethink.