Monday, June 17, 2019

Funding Cuts to Tenant Duty Counsel at LTB Just Might Improve the Process

Over the last week there have been several newspaper articles about cutbacks in funding to community legal clinic programs and then today, cutbacks on programs offered by the Advocacy Center for Tenants, Ontario ('ACTO').

ACTO does advocacy work for residential tenants in Ontario, and is funded by Legal Aid Ontario. One of its functions is to run the Tenant Duty Counsel ('TDC') program which sees staff lawyers funded by Legal Aid Ontario attend at each Landlord Tenant Board ('LTB') hearing location prior to each hearing docket. Lawyers or paralegals provide tenants with legal advice and assistance with respect to their Landlord Tenant Board application or potential application.

The various news stories have been poorly investigated, intentionally sensational and are very one-sided. There is another side to the story....that is the small landlord perspective and I suppose a third side being the taxpayer's interest in the whole process and whether there is value for money.

I would like to see ACTO scrapped entirely, or at least the tenant duty counsel program eliminated. I think the power imbalance that exists by providing tenants with free legal help against small landlords who can't afford lawyers and paralegals has contributed to the problem of delay and unfairness at the LTB.  It has certainly affected the perceived unfairness of process at the landlord and tenant board. Whether it's true or not, and I believe it's generally true, the perception is that tenants have had their way with landlords at the board for more than 15 years.

So let's look at the other side.  First of all, having a safety net at the hearing encourages bad behaviour by tenants (moral hazard).  Moral hazard exists.  It is naive to contemplate public policy with the belief that everyone's intentions are pure.

The current system is VERY expensive, and it's unfair to small landlords as they don't have on-site legal support at hearings, or an organization to do test case litigation on their behalf.  At times I've seen up to 3 staff lawyers at LTB hearings. Having tenant duty counsel is a luxury we can't afford being the jurisdiction with the highest sub-sovereign per-capita debt in the world.

Clinic lawyers tend to be highly ideological...they don't settle readily. My experience with lawyers from the clinic system is that they believe their cause is more noble than their adversary's.  Perhaps it is, but all the professional conduct rules about civility to other licensees, not being a dupe of the client and presenting adverse case law to an adjudicator still apply.

There are a large number of dismissed appeals at Divisional Court and the Ontario Court of Appeal that were filed by ACTO or the clinics.  In fact their track record is miserable.  When LAO funds advance these claims, they are playing with someone else's money.  Just check out CANLII and do a search.  Each of these appeals by tenants is advanced with government funds.  And the risk of "costs" being ordered against the losing party is not a factor.  Normally, the fear of costs balances a party's decision to bring over-zealous, litigious and sometimes frivolous claims.

Having free tenant legal services at the LTB perverts the economic rationale with respect to decisions parties make regarding settlement.  The clinics have government resources to appeal a losing decision if they feel the issue is of broader importance. Small landlords can't spend $20,000 for counsel to appeal an adverse decision. S/he has to just suck it up.  Time is also on the tenant's side.  Sometimes, a delay is as good as a win if it allows a tenant to stay an extra year, at times rent-free, while reviews appeals wind their way through the system.  Cost and risk free!

Having tenant duty counsel offices just outside of, or in some cases inside of LTB offices is intimidating to landlords and also gives the public the impression that they are part of the Board. This appearance brings the LTB process into disrepute as landlords see the LTB and Tenant Duty Counsel as one and the same.

In today's unprecedented climate of three month waits to get a hearing date, Tenant Duty Counsel & clinic lawyers know that an adjournment is highly beneficial to their client and prejudicial to the landlord who is not getting paid or who is being victimized by an occupant, sometimes living in their own home. That card is played often, either to get an adjournment, or force settlement as the landlord fears more months with no rent.  Not fair.  Anecdotally, I have heard stories from multiple colleagues that clinics are negotiating $10,000 settlement for their clients as a starting point for good faith landlord's use evictions.  The law requires just one month's compensation be paid, but the process can drag on forever.

ACTO and the clinic system have exclusive funding to commence test case litigation on behalf of tenants. It is patently unfair to have one side with deep pockets launching appeals, frustrating the other side's rights to equal justice. Landlords have no such ability or angel investor, and it has skewed the case law towards the tenant side as there are far more tenant appeals filed.

Clinics use different criteria in recommending settlement to a client.  It has been my experience for instance that at one Toronto legal clinic, a teaching clinic, they don't settle for anything other than complete capitulation. Their articling students benefit from trial experience.  Great training for the articling student. Sucks for the landlord.

Finally, having staff lawyers at the hearing creates delay by way of excessive adjournments, which also makes the composition of LTB hearing blocks less efficient.  Time that could otherwise have been spent having matters heard ends up wasted as parties go home.  This is a result of tenants being advised by duty counsel to seek an adjournment. The advice may well be wise, but landlords have to make those calculations before the hearing, consulting with legal help or the LTB call centre and perhaps seeking consent to adjourn from the tenant.  Tenants can simply wait for their hearing date and then request the adjournment from the Board adjudicator after speaking to duty counsel.

Legal Aid Ontario, through its funding of ACTO and the TDC program has played a small part in what's wrong with landlord and tenant relations in Ontario.  The system is overly complicated, overly adversarial, slow and expensive. Scrapping the TDC program can only improve the situation.

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