Pixabay

October 2020

Can LAT Award Punitive Damages?

Featured Case Study

Catherine Korte
Catherine A. Korte,
Partner

Mahroze Khan
Mahroze Khan,
Associate Lawyer

Ryan R. Taylor
Ryan R. Taylor,
Associate Lawyer

By Catherine Korte, Mahroze Khan and Ryan Taylor

On September 23, 2020, the License Appeal Tribunal (“LAT”) released a ruling that it does not have jurisdiction to award punitive damages.1

The Applicant filed a motion to the LAT requesting that a claim for punitive damages be added as an issue in dispute on the basis of an alleged privacy breach.

Both the Applicant and Respondent cited Stegenga v Economical Mutual Insurance Company2 in their submissions as to whether the LAT has jurisdiction to award punitive damages.

The Ontario Court of Appeal in Stegenga dealt with a fact scenario in which the Plaintiff (respondent in the appeal) brought a court action against Economical Mutual Insurance Company alleging bad faith and claiming punitive and exemplary damages.

The Court of Appeal held, in response to the issue of the court having different powers than the LAT and being able to grant different damages, that the legislature must be taken to have armed the LAT with the remedial powers it considered appropriate to deal with improper insurer behaviour, knowing those remedial powers were different from the court's:

[52] The legislature made a choice as to what disputes would be within the exclusive jurisdiction of the LAT, and what remedial powers the LAT would have. That was a policy choice it was entitled to make. The Insurance Act and its regulations form a comprehensive scheme for the regulation of insurers and insurance. The legislature must be taken to have armed the LAT with the remedial powers it considered appropriate to deal with improper insurer behaviour, knowing those remedial powers were different from the court's.

Therefore, the Court of Appeal closed the door on independent bad faith claims arising from an insurer's conduct in handling a claim for accident benefits.

...LAT does not have jurisdiction to award punitive damages.

Having heard both the Applicant's and Respondent's submissions, Vice Chair Terry Hunter stated that “I find that the law is clear and that the LAT does not have jurisdiction to award punitive damages.”

The Vice Chair concluded by stating that:

[13] The claim in this application is for Statutory Accident Benefits. Those facts give rise to the LAT’s jurisdiction. The court stated: It is not the legal characterization of the claim but the facts giving rise to the dispute that are determinative.

[14] I find that the court of Appeal in Stegenga clearly describes LAT jurisdiction as confined to determining whether a benefit was unreasonabley withheld or delayed which could lead to what is referred to as a “special award”. There is no jurisdiction to award damages based on bad faith.

  1. 19-003567/AABS
  2. 2019 ONCA 615

mccague borlack llp

TORONTO | OTTAWA | KITCHENER | BARRIE | LONDON

Copyright McCague Borlack LLP - Legal Notice | mccagueborlack.com | Follow us Twitter, Linkedin, Facebook

McCague Borlack LLP is a member of the Canadian Litigation Counsel, a nationwide affiliation of independent law firms. Through CLC's association with The Harmonie Group, our clients have access to legal excellence throughout North America, the U.K. and Europe.

clcnow.com | harmonie.org