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Mopping up the floor while the tap’s still running


It’s common sense you can’t fix a problem unless you find the root cause. As the old Dutch saying goes, no sense mopping up if you ignore the source of the leak.

So, it seems, with the License Appeal Tribunal (LAT), the appeal court for Tarion warranty (ONHWPA) decisions. Consumers have pointed out problems with the LAT for over a decade, but no meaningful action has been taken to correct the dysfunction so many have experienced.

No one in authority in the legal establishment seems to be actually listening to the end-users of this flawed system. It’s not “dissatisfaction with the outcome”, as is often cited which ails consumers, it’s dissatisfaction with the process, the highly legalistic courtroom forum, and the imbalances inherent in a large corporation (Tarion) fighting the little guy.

Tarion, a government monopoly,  is always represented by experienced lawyers at the LAT;  consumers have to self-represent due to the high cost of experienced counsel. Under these circumstances, it’s no surprise consumers lose about 90% of the time. (See 10-year analysis of the LAT by Canadians for Properly Built Homes at

A case in point is the following. In 2014-15, a young well-educated couple, Jeffrey Ferland and Aleksandra Ferenc, filed a public complaint with SLASTO, the LAT’s oversight body, about bullying by the adjudicator, and missing recordings of the bullying complaint itself. After months of delay, and partly due to MPP Hillier raising a question about this in the Legislature,  SLASTO finally launched an “investigation”.  A respected retired judge and a lawyer were hired as “investigators”. I suggested in writing to SLASTO that they include a member of the public on the investigative team to create a public perception of balance in the handling of the complaint. No response.


I attended the Ferland/Ferenc hearing as an observer for 12 of the total 26 days in 2014-15. I had no skin in the game, no financial interest in their investment, and I’m not an employee of the LAT, SLASTO or Tarion.

I was shocked, on several occasions, by the conduct of the adjudicator toward the applicants. I made hand-written notes on each day I attended the hearing. I also made an appeal to the head of SLASTO, Ms. Lamoureux, together with the applicants, in the winter of 2015 urging her to investigate the adjudicator’s conduct, and find out how the how recordings of the bullying complaint itself could have gone missing.  No response.

Investigations into professional misconduct by the members of the same profession rarely seem to get at the whole truth. This was the case with the CBC’s internal investigation of Jian Ghomeshi’s conduct in the workplace, and more recently a major Toronto newspaper’s response to allegations of a “toxic” work environment. Employees often require anonymity,  since they have too much to lose by speaking out against their co-workers or managers. Whistle-blowers are rare because they are often not protected by their employers for speaking the truth about the behaviour of management or co-workers.

That brings me to some of the major weaknesses I see with the SLASTO public complaint investigation (link below) published August 3, 2016:

  1. Of the 18 interviewees, 11 of them seem to have been employees of either the LAT, SLASTO, or Tarion. Many of these employees were not present in the hearing room, so could not have seen first-hand for any extended period of time the conduct of the adjudicator. Only 3 were members of the public; I was one. None of the interviewees are named. This is not a balanced or impartial feedback on what went on during the hearing. Several of the LAT employees interviewed were not in the hearing room, or were not there for enough days to witness patterns in the adjudicator’s behavior. The adjudicator was on her best behaviour when management’s eyes were upon her, in my observation.
  2. I was not questioned about my affidavit I signed (03/15) after witnessing the Nov. 27th 2014 “missing recording” incident. I find it odd that investigators didn’t ask me about it,  a sworn statement regarding one of the specific incidents under their investigation. My observation differs from what the adjudicator and respondent said happened. I was not asked for my recollection of what happened on that day. I gave the investigators a copy of my affidavit and some of my hand-written notes made during the  hearing. The adjudicator claims she simply “forgot” to record the bullying allegation on Nov. 27th, 2014. The investigators believed her version of events: “human error”, no one to blame. On pg. 21 the investigators wrote: “Without a recording, we will never know for certain what Mr.Ferland said during the portion of the hearing when the recording device was not running.” No one asked me what was said and what I noted down during this exchange. Seems odd for an investigation of this important point.
  3. No explanation was given in the report why the COO of the LAT, Mr.McDermott abruptly left the LAT around the time the public investigation was announced. He had previously told the applicants the LAT wouldn’t investigate the bullying allegations until after the hearing was over. I believe the LAT management failed to take meaningful, and timely action, perhaps to protect their own reputation and head off potential negative public feedback.
  4. No explanation seems to be given for why the adjudicator herself resigned from the case before it was completed.
  5.  In late 2015, the applicants asked the adjudicator, on the record during the hearing, and later they asked LAT staff, for someone in management to be present in the hearing room because they felt bullied. On the record, the Adjudicator denied this request, citing cost concerns. LAT management also denied this request. This was a clear cry for help by the applicants, and it was brushed aside. The adjudicator then ruled in March and April 2015 that her conduct did not constitute bullying. The adjudicator may have had good reason to keep management’s eyes away from the hearing room, and management may have had good reason to turn a deaf ear to complaints of bias and bullying against an adjudicator.
  6.  The recommendations in this report seem weak.  The investigators advise (pg. 2), more “skills-based train for adjudicators and staff“, more “templates, (…) checklists, and other materials for adjudicators to make sure they are “well-prepared“; and more “practical, accessible materials for self-represented parties..” .

More training of LAT staff and adjudicators is a vague and long-term goal. What about the self-represented litigants who come to the LAT today? Are they expected to experience the LAT a work-in-progress, and continue to suffer the financial and emotional consequences? Even the investigators themselves stated on pg. 25 of their report: “We were surprised by the degree of formality and rigidity we observed in the process to resolve homeowner appeals, especially since the tribunal system was set up to avoid costly adversarial and complex court procedures.”

We can all agree on that. But this is not new information, and it’s hard to see why it took an 8-month investigation to find out a lot of what SLASTO already knows.

The LAT is a highly legalistic and complex forum; it’s not a problem-solving body. It costs taxpayers and new home buyers dearly, but seems a good source of revenue for prominent Bay Street law firms who charge an hourly rate higher than what most adjudicators earn per day.

Even the Assistant Deputy Minister of the “working-with-Tarion” Ministry of Consumer Services stated in Oct. 2014, in a letter to Tarion’s CEO, that the LAT processes were too complex and adversarial, and not solving problems for consumers.

Another red flag, ignored.

The Attorney(s)-General of Ontario, both the former A-G Ms.Meilleur and the current A-G Mr. Naqvi are silent on the issue of reforms to the LAT. Both are also members of the legal profession.

One of the suggestions the report makes is to use a round table for hearings to “create a more informal and less intimidating atmosphere.” In the category of band-aid solutions, this takes the cake. This completely ignores the long-lasting financial and emotional toll the LAT takes on consumers.

The behavior I witnessed from the adjudicator in the Ferland/Ferenc hearing was inappropriate for an officer of the court, or for any member of the legal profession. It doesn’t matter how long the hearing went on, or how frustrating lawyers and adjudicators find it to deal with self-represented consumers. The adjudicator’s conduct in the Ferland/Ferenc case was shocking and intimidating to me as a member of the public. I believe it clearly violated SLASTO’s own published code of conduct.

The investigation side-steps the real problem: the courtroom should not be used for ONHWPA appeals where applicants are self-represented. Mediation could be a better option, but only with fair representation for each side. The LAT is an uneven playing field. The rules are made by the big battalions who have a map of the battlefield and the most powerful weapons and tactics.  The principles of natural justice, and even human decency, how we expect to deal with each other as human beings, were not observed by those in authority in the Ferland/Ferenc hearing.

The the SLASTO-commissioned investigation did not properly balance input from the consumer point of view with that of SLASTO/LAT employees. Nor did it recognize the fundamental absurdity of the little guy up against a large powerful corporation in the courtroom.

The problems are not hard to see if one looks at what happened outside the lens of the legal establishment. Meaningful solutions can only be found by getting at the root cause of the problem: access to a courtroom is not access to justice, it’s access to a courtroom.

The consumer’s voice must be heard and respected in much-needed, urgent reforms to the Tribunal system. But that’s a step apparently too big for the legal establishment to make.

SLASTO and the LAT management, as well as the Attorney-General himself, continue to turn a blind eye to consumer cries for help, mopping up the floor while the tap’s still running.

– – –

Thomson-Cohl investigation_Final Report_Aug 3, 2016


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Andrea Horwath Gets It

Ontario NDP leader Andrea Horwath recently signed a petition at to end the Tarion monopoly. Tarion is an arms-length agency of government, a “Delegated Administrative Authority” (“DAA”) with a monopoly in new home warranties and responsibility for regulating the new home building industry.

In her statement accompanying her signature, Ms. Horwath explains why she’s in favour of ending Tarion’s monopoly status: “The NDP has long recognized that Tarion is an unaccountable monopoly that protects the developers who control it, and not the home buyers who pay the bills. Other provinces give consumers a proper choice when it comes to home warranty protection, and it is time for Ontario to catch up.”

Many MPPs of both the NDP and PC parties have also signed.

Premier Wynne, on the other hand, has remained silent on all things Tarion, refusing to meet with or respond to consumers who’ve written to her about “horror stories” they’ve experienced with Tarion. A revolving door of Liberal ministers during the last 12 years has brushed aside problems, saying they’re “working with Tarion“, while their mandate is to oversee it. Working with and overseeing are two entirely different things, but no one in government has answered concerns about this contradiction.

A recent revelation in The Toronto Star (29/03/16 by M. Regg Cohn) that Liberal ministers have “fundraising targets” does not surprise consumers who’ve raised red flags about this for years with both Premiers Wynne and McGuinty. No answer from either.  It’s no secret the top donors to the governing Liberals are the building and construction industry, the same industry the government is supposed to be overseeing through its monopoly, Tarion.

The only people who seem to favour the monopoly model are government officials and Tarion executives. Tarion’s former board Chair, a real estate lawyer and 10-year Tarion board member said in an interview with The Ottawa Citizen (May 15, 2015): “The model that we fall under is a really good one.  It allows for efficiency (…) and keeps the government’s nose out of doing things.”  That’s the problem: keeping the government’s nose out of doing things, like the butcher inspecting his own meat.

No economics textbook or any concrete examples we’ve been able to find can demonstrate that monopolies benefit consumers. Here’s the Wikipedia definition:

“In economics, a government-granted monopoly is a form of coercive monopoly by which a government grants exclusive privilege to a private individual or firm to be the sole provider of a good or service; potential competitors are excluded from the market by law or regulation.” The words “coercive” and “privilege” set off alarm bells with many consumers. Alberta, Manitoba, and B.C. all have gone to the multiple-provider model for new home warranties. There, the regulatory function is the responsibility of government, not the provider.

Premier Wynne herself seems to be no fan of monopolies, however, since she was quoted in The National Post in April 2015 as saying: “the days of monopoly are done.”

Tarion is not only a monopoly, it’s also exempt from oversight by the Auditor General and the Ombudsman of Ontario, and all its executive salaries are secret. This seems very outdated.  Response to the petition at to #EndTarionMonopolyNOW indicates consumers want choice, and independent regulation of the industry.

What may change the landscape is the recent scandal revealed in March this year regarding political fundraising. The current Wild West rules are to be significantly reformed by January 2017. This means generous donations the government has enjoyed from the building industry will be hopefully banned. This may level the playing field for consumers and reduce the influence of big corporations on public policy-making.

Before this political fundraising scandal was revealed in March 2016, the Minister responsible for Tarion had announced a wide-ranging review of Tarion by a respected Ontario Superior Court Judge, J. Douglas Cunningham. Public complaints and pressure from Opposition MPPs had been mounting for years. The review was seen at the time either as a political stalling tactic, or a way to back into reforms the building industry may find uncomfortable.

Again at that time, Andrea Horwath hit the nail on the head. In a statement to The Toronto Star (05/11/2015) she explained: “The review is not necessary. The problems are rampant. If the government doesn’t know what’s wrong with Tarion yet, after all the private members bills and all the criticisms we’ve been raising, then they simply have been turning a blind eye to a very bad situation.”

The government’s excuses for turning a blind eye to problems with Tarion for over a decade may have run their course. The tide seems to have turned on the outdated monopoly model. Tarion is finally under the microscope of a seasoned judge.

Sometimes a perfect storm, a confluence of unrelated events, produces unexpected results. Sometimes, as the Dutch saying goes, the shore stops the ship.


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Remembering Earl Shuman

The tragic circumstances surrounding the passing of Earl Shuman last week are one of the reasons I decided to write this piece.

For those who didn’t know him, he fought for 27 years to rectify injustices he saw in the Ontario government monopoly, Tarion Warranty Corporation, and the abysmal access to justice problems faced by ordinary people trying to get their homes fixed under Tarion and the License Appeal Tribunal.

Earl took on the legal establishment by challenging the lunacy of some Tarion case law and its heavy-handed use of the justice system. He explained one of the absurdities to me this way: if you buy a new home and install a 24 carat gold toilet in it, you’re the builder of the home under law because you contributed more than a certain dollar amount to the home’s overall value. So even if you’re a dentist, you can be deemed a builder under Ontario law. He called this the Shuman Test “Fraud“. Many cases have been decided since his own case years ago following this principle, which sounds like something out of George Orwell’s “Animal Farm”.

I met Earl Shuman and his wife at Queen’s Park several years ago at one of the many meetings to try to bring transparency and accountability to Tarion. Real reforms have not been made to this government monopoly in over 40 years. Builders interests are the best understood by policy-makers; consumers are often labelled “unscrupulous”, trouble-makers, whiners, or malcontents who wouldn’t be happy with the Taj Mahal. Builders, on the other hand, are politically well-connected, they have the loudest microphones, the deepest pockets, and lobbyists and lawyers to make their views well understood by policy-makers.

Earl was engaged in a Sisyphean task up against these Goliaths, rolling a huge rock uphill only to have it come crashing back down on him each time. He didn’t play by the rules, but he often tried to. Many of us who are accustomed to crusty, irritable, feisty figures learned with time how to read him. He was a rule-breaker, rubbed many people the wrong way, but he knew that nice, polite, people seldom bring about real change.

He attended a Tarion Review town hall meeting a few weeks ago. When he saw me come  in, he motioned for me to sit down next to him. He brought a well-used copy of the Ontario New Home Warranties Plan Act which Tarion administers for the public on behalf of government. He read from it to the attendees, ministry lawyers and officials present. He pointed out the intent of the legislature was not to have the law drift so far away from its consumer protection intent. Since Tarion makes its own regulations, with oversight as thin as a spider’s web, he knew this was flawed, outdated legislation. He knew this was the 900-pound gorilla in the room.

He drove from Cobourg the night before, suffering from a cold, paid for his own hotel room to attend the impossible weekday timing of the meeting from 9 a.m. to 12 noon. He tried to keep his years of anger and frustration at bay, tried to keep his cool. He did. Giving me a big hug when he left, he thanked me for being there and contributing. I wrote him a short e-mail afterward saying he’d done well under what we all knew were difficult circumstances.

Earl wanted these injustices to be exposed by the media in a sustained and front-page way like the press covered the Ghomeshi, Ford, and Duffy scandals, and various messy society divorces.  Journalists often told us they wanted “sexy stories”. This was a decidedly un-sexy story, until you buy a new home and find out how flawed and out-dated the policies are which govern this important financial decision in your life, buying a new home.

Earl asked me last November to keep a file of all the documents relevant to his 27-year work, and correspondence with senior officials. A few times he said, now eerily meaningful to me, that he wanted to make sure someone would take his work forward and all these years wouldn’t go to waste, “If something ever happens to me…“, he said several times.  I assured him I have well-organized files, not as extensive as his pool-table full of documents, but all his years of work wouldn’t be lost.

He’d from time to time e-mail me and ask what I thought of a letter he’d sent to a top official, or what I thought of his Supreme Court of Canada application, for example. He’d say to me, see if you can spot the game-changer words in this document. Anyone in our communication groups who’s worked on Tarion/LAT issues could pick out those words.

Earl knew every nook and cranny of the legislation, the Criminal Code, all the legalese, the double-speak, and the political games.  He used to commiserate with me how hard it is to write to politicians and journalists, how achingly long it takes to craft a persuasive, well-researched e-mail, and wait endlessly for no answer. Many of us struggled with this, without the benefit of PR people, legal advisers, and researchers, all we have is our sense of right and wrong, and our kitchen tables. Over the years Earl became an expert at clear, well-documented, persuasive writing; though his style was lengthy, he mastered it.

I suggested he write a book, and use social media to his advantage. The press was obviously not covering these problems in-depth and in a sustained way as he knew they deserved. He looked forward to his retirement in a few months, and promised he’d do more work when he finally had more free time.  Then you will really see me fly, he told me in February.

A few months ago he retired. He attended the Tarion Review town hall meeting on April 5th, his birthday, and according to his wife, Krista, he descended after that into a black hole of frustration and despair.

The news of his sudden death and the circumstances surrounding it, described to me by his shaken wife, caught me off guard and made me cry like a grade school kid. Earl’s story is heart-breaking and complex. He worked on justice and consumer protection issues for almost 30 years. Many of the injustices he exposed are still festering, some getting much worse. Too many consumers continue to suffer under builder-biased policies administered by a monopoly claiming it’s protecting consumers, while protecting the builders it’s supposed to regulate.

Earl and Krista drew together a communication group of concerned consumers determined to fight for reforms to Tarion, the LAT, and justice. All of us will make sure his 27 years of work were not in vain.

To the Ministry of Municipal Affairs/Housing official who inquired several months ago why these issues were so urgent:”Did anyone die?”, she asked.

Well, actually yes, someone has.


In memory of Dr. Earl M. Shuman,  April 5th 1951 – May 6th, 2016


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“Law and justice are not always the same”…Gloria Steinem

There has been much talk over the past few years in legal and academic circles about improving access to justice (A2J). The growing phenomenon of self-represented litigants (SRL’s) is taking a toll on society, middle-class families, and the courts.

Many self-represent due to financial necessity, not choice. The cost of hiring a qualified litigation lawyer is $3,000-$5,000 a day for the Licence Appeal Tribunal (LAT), for example, excuding the cost of expert witneses.  Most middle-income families don’t have this discretionary income, especially when up against big litigious corporations like Tarion Warranty with unlimited legal resources. LAT hearings are stock-photo-information-security-concept-gavel-book-with-chain-and-padlock-221013478often complex and lengthy, and the chance of SRL’s losing is over 90%.

With all the talk about improving access to justice these days, one would expect the LAT to welcome consumer feedback on making the system more accessible and levelling the playing field.  One would expect the same of the oversight body SLASTO, the Ombudsman of Ontario and/or the Attorney-General. Not so. These taxpayer-funded authorities seem to turn a blind eye to these suggestions.

Below are a few simple changes which could be made TODAY if there were really a will to improve A2J. These suggestions have been made repeatedly to the above authorities. They continue to say they’re content with the pace of reforms, without citing any concrete examples.Often we get no reply at all.

Five of these suggestions are listed below. Hopefully this month with renewed interest in access to justice issues, someone in authority will read this and put words to action.

  1. Complaints of “missing recordings” at License Appeal Tribunal hearings should be investigated at the time the complaint is made, not after the decision has been rendered. Complaints of “gaps” in the LAT’s official recordings seem to affect the applicant’s case, not the defendant’s. These complaints should be taken more seriously, and investigated promptly.
  2. Complaints of bias or bullying made against an LAT adjudicator regarding or his/her conduct should not be decided upon by the adjudicator him/herself.  An independent investigation should be held in a timely manner.  The current self-judging policy does not seem impartial.
  3.  A self-represented litigant should be allowed to bring a friend as support or note-taker to a pre-hearing. This is currently forbidden: only lawyers/paralegals are allowed. This often leaves the SRL alone against 5-7 opposing counsel and their employees, which is clearly over-loading the bases.
  4. SRL’s should be allowed to voice record their own hearings.  Lawyers routinely bring court reporters with them, SRLs can’t afford this.  Court testimony should be public, since there’s a public interest to testimony about new home construction defects, shoddy building, and the testimony of engineers.
  5.  There should be no conferring of Tarion’s/builder’s lawyers behind closed doors without including the SRL. This is forbidden in the LAT’s own Code of Conduct (pg. 4 under “Integrity”), but it’s still taking place.    The LAT’s Code of Conduct states: Members should not communicate directly or indirectly with any party, witness or representative in respect of a proceeding, except in the presence of all parties and their representatives.”    Yet Tarion revealed in Dec. 2015 (on its website under Dispute Resolution Review, pg. 48) that it is doing this: “The tribunal member presiding at a LAT pre-hearing often asks to meet privately with Tarion and the builder in the absence of the homeowner…”     This came as a huge shock to SRL’s who’ve gone through the LAT without knowing this was going on. It appears to be clearly against the LAT’s own Code of Conduct.

To legal professionals who say they’re in favour of improving access to justice for ordinary citizens, these are a few simple, cost-efficient suggestions.

The reasonable person, on whom so many legal principles are based, would be shocked to find out many of these things are going on in first place.

To encourage confidence in our legal system, meaningful action needs to be taken by the legal community itself and their oversight bodies, who are paid by our tax dollars.  Many of these changes could be made today, if there’s really a committment to improving access to justice.

The legal profession is known to be risk-averse, conservative, and protective of its traditions and reputation. There’s a reason why those who have the authority to make meaningful change have not acted. For years. Perhaps as lawyers they’re fearful of liability if more people were to find out about these imbalances.  The LAT has recently expanded its mandate to cover auto insurance disputes, so to admit these short-comings may be inconvenient.

Maybe social reformer Susan B. Anthony’s quotation applies here:

Cautious, careful people, always casting about to preserve their reputations… can never affect a reform”. 

Will anyone step up to the plate and reform the LAT?






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“If your tool is a hammer, then every problem looks like a nail”: re Tarion’s “Dispute Resolution” Review

Tarion Warranty Corporation recently published on its website a review of its Dispute Resolution processes. It was commissioned by Tarion itself in early 2015, after negative consumer feedback at its Annual Public Meeting (05/2014). (See Review at, “About Us”, “Dispute Resolution”)

Tarion chose a well-known dispute resolution specialist, Ms. G. Chorneneki as reviewer, and limited the scope of the review to the narrow lens of dispute resolution only. The review is scholarly, detailed, and undoubtedly costly. But its 69 pages are not written in language easily accessible to the general public.

Here are some of my thoughts about it, and several important omissions I see.

Ms. Chornenki states, pg. 6, of the review: “Readers should understand that this review is limited to Tarion’s dispute resolution functions and is not directed at its governance, regulatory function, or finances.

That’s a problem.  Tarion is a complex, multi-faceted government monopoly with both builders and consumers as stakeholders, and has many potential conflicts of interest. The tools available to solve a problem often alter the perception of the problem itself, and limit the solutions.  If your only tool is a hammer, then every problem looks like a nail.

A dispute resolution (DR) specialist whose analysis is limited to DR only, is likely to only be able to identify problems through the narrow DR lens. The narrow scope has limited the usefulness of the findings, in my opinion.

Some of the recommendations may be worthwhile, for example producing more evidence-based reports at an earlier stage of the claims process, and recommending employees use their “discretion” more often to hire third party experts. (Recommendation 6). But training Tarion employees in evidence-based report-writing, or dispute resolution skills is costly and time-consuming. Consumers expect Tarion has already competent employees on staff for the jobs they were hired to do. Using more money from the warranty fund to make “field representatives” more like dispute resolution officers is costly. It would undoubtedly create more jobs for outside DR consultants. But Tarion already spends approx. $9 million on administrative costs, $26 million on salaries, and only $3.5 million in claims, (annual report 2014) so the review recommends more expenditures, which may or may not solve systemic problems.

Why has Tarion not not hired qualified building inspectors as is required in Section 18 of its governing legislation, the ONHWPA?

A group of 8 consumers I organized on a volunteer basis to give 2 hours of input into this review (29/07/15) asked why Tarion has not hired inspectors as required by its own legislation. The Act states clearly “Tarion shall hire inspectors for the purpose of this Act.”  If Tarion hired qualified inspectors, there would be no need to train its representatives to be more like building inspectors or dispute resolution specialists. Tarion has never answered this question, asked repeatedly by consumers and MPPs.  Omitting this from the review is puzzling.

Why do new home defects have to become disputes at all?

Experience with other warranties seems very different. I recently discovered a leaking valve in HVAC equipment in my home. The installer sent a qualified HVAC expert, inspected it, and told me they’d look after me under the warranty. It was fixed within a week.  I didn’t have to investigate the cause, find the villain, or defend myself from accusations I might be the villain.  A similar experienced was cited by a friend whose car was deeply scratched in a car wash. She discovered it when she got home, and her insurer immediately said they’d do an investigation, and take care of it. She didn’t have to get involved in a whodunnit either. These companies take the side of their client, not the person who caused the problem. But they have competitors in the market, Tarion does not: we are required by law to buy their warranty.

Who is Tarion’s client, the builder or the homeowner? “Tarion was created to serve as the regulator of new home builders and administer a new home warranty plan to protect new home buyers“, the Annual Report states. Ms. Chornenki’s review makes no mention of Tarion’s role as regulator/licensor of builders. Nor does it point out that 8 out of 15 Tarion board members are builders, no consumer advocates.

The narrow parameters set by Tarion for this review are too restrictive to allow a proper analysis of all the tentacles of these problems. That’s a serious shortcoming since these problems give rise to many disputes: serving two masters, no transparency regarding whose interests are being served, or whether all consumers and builders are treated equally.

The Tarion Builder Directory (builder track record) is not mentioned at all in this review either. A builder might be motivated to do a quick cosmetic fix on a major defect, let the warranty expire, and walk away with no responsibility, and therefore no defect listed on his record. Tarion would benefit in this case as well by turning a blind eye, letting the 2-year clock tick, avoid paying out a claim, and avoid setting a precedent for future claims.  The different motivations of these stakeholders are not examined in the review.

Many consumers would be more interested in dispute prevention experts. Why can’t Tarion prevent disputes before they arise and balloon into costly, lengthy disputes? The answer would require looking at the complex stakeholder relationships and dual role of regulator/warranty provider, all explicitly out of scope in this review.

Tarion’s Annual Report also talks about “balancing the interests of all its stakeholders. “Tarion strives to establish policies and business practices that balance the interests of its stakeholders: new homeowners, home builders, and the government of Ontario” (pg. 4, A.R. 2014).  “Balancing stakeholder interests” is different from “protecting new homebuyers.” These are the potential conflicts of interest which remain unexplored in this review.  The builder-heavy board often passes builder-friendly amendments such as Builder Bulletin 20 on chargeablility. The review recommends removing the word “Builder” from “Builder Bulletin”. This will not address builder bias in policy-making however, which is seemingly a no-go area due to the limited scope of this review.

An alarming statement is found on pgs. 49-51, under “Homeowner Appeals to the License Appeal Tribunal (LAT)”. The reviewer states: “the tribunal member presiding at a LAT pre-hearing conference often asks to meet privately with Tarion and the builder in the absence of the homeowner in order to determine prospects of a settlement.” The review recommends Tarion “decline” this “invitation”. Most consumers were shocked to hear this has been going on. The reviewer states in her backgrounder (pg. 57) that she has also consulted for the LAT in her private DR practice. The LAT has been criticized by consumers as an imbalanced forum, and with this new revelation, there is more cause for concern. Consumers have complained that Tarion often confers with the builder’s lawyers to discuss “strategy” without the knowledge of the homeowner. Recommending Tarion decline these LAT invitations is not enough. With no transparency, the public is being asked again to trust Tarion, and trust the LAT.

The review also doesn’t mention the growing number of cases where consumers bypass Tarion and the LAT entirely and take their cases to provincial court. Here the builder can’t rely on Tarion to defend him at the expense of the warranty fund. Many consumers have lost confidence in the impartiality of the LAT and Tarion. With a homeowner failure rate at the LAT of over 90%, it’s no surprise.

In recommendation 17 (v), pg. 69, Tarion is advised to reduce its use of external counsel. This is a sensible idea to reduce costs. The review states this would “bring a less intimidating, person-to-person approach”. No one observing Tarion’s in-house counsel at the LAT would conclude they’re less intimidating or more person-to person than external litigators.  Has the reviewer witnessed hearings where the homeowner is self-represented?  The suggestion to use a Tarion senior executive to bring “a fresh, problem-solving perspective” to disputes still assumes Tarion only acts in the interests of consumers, and seems to ignore the various conflicts of interest cited above.

Another omission in the review, a problem raised in our consumer focus group (29/07/15) was the role of the internal “Homeowner Ombudsperson”. This office was critiqued for not being impartial since it reports to Tarion’s board. It seems to waste homeowners time, confuse them, pass them on to the legal department without prior notice, share internally information given in confidence, or recommend consumers go to the LAT where Tarion wins over 90% of the cases. The reviewer says Tarion does not “consciously” stream files to the LAT. Without examining the role of the internal ombudsman, this is not a complete picture. Omitting the internal Ombudsperson’s role is another shortcoming of this review.

Consumers suggested looking at other warranty programmes in Canada for dispute resolution experiences, for example in Alberta and B.C., which have six or more providers. There is no mention of this in the review, except one line “consultant’s research”, pg. 58. Tarion is unlikely interested in anything which might question its monopoly status. Out of scope.

The reviewer states (pg. 6) that her analysis covers claims assessed in 2014 and part of 2015. This seems a very narrow window. Many who’ve observed Tarion for over 5 years know there are many disturbing cases of serious defects, often Building Code violations, which have not be addressed and have been allowed to drag on for 8-10 years, with devastating emotional, health, and financial consequences for homeowners. Limiting the time-frame further limits the reliability of the conclusions.

In summary:

The reviewer made 17 recommendation, (pgs. 60-69).  A majority of Tarion’s board would probably have to approve them if this is to go further. What is the likelihood of majority board approval, given that 8 out of 15 board members and its Chair are builders, and none are verifiable consumer advocates?

Even if the board did approve the recommendations, the root causes of the problems have not been examined. This is like treating the symptoms of a disease without diagnosing the underlying cause: short-term, costly, and may not remedy the problem.

Any long-lasting solutions need to look at the Tarion monopoly in its entirety, examining the many tentacles of this problem, examining all its stakeholder vested interests and lack of transparency issues.

Another appraoch may be promising:

The Ministry of Government and Consumer Services announced (05/11/15), 2 months after the current Tarion DR review was completed, that there will be a general review of Tarion by a ministry-appointed former Judge, Douglas Cunningham. The scope of the review will be wide, and will include governance, transparency and accountability issues, as well as examining Tarion’s monopoly business model. This is a positive step, although the Minister oddly announced publicly (Toronto Star 10/11/15) that he expects it will bring no major changes to Tarion.

The DR reviewer concludes her report by stating (pg. 54) that Tarion has a “customer-service culture“, and is an open, values-based organization.”  Tarion’s CEO, obviously pleased with this broad assessment, repeated it in his introduction to the review: “Dispute Resolution Review affirms Tarion’s customer-service culture (…) I am pleased that an external expert has recognized Tarion as an open, values-based organization...”  Its puzzling to read these broad conclusions about the organization after you’ve just gone to great lengths to limit the scope of the review.

Its no surprise to seasoned Tarion observers that they make the rules, referee the game, move the goalposts as needed, and proclaim the winner.


link to Tarion DR review:





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NSRLP’s article: “Marking Our Report Card – Tell Us What You Think?”

Here’s an article (see below) I re-blogged from the National Self-represented Litigants Project (NSRLP)  on why we need reforms to create better access to justice.

Equality before the law is what our society is based upon. We have more lawyers today than most other countries. Yet the middle class has been priced out of the market for legal assistance. No one wants to self-represent. If we could all afford the best lawyers out there, we’d hire them, since it would significantly increase our chances of winning. The hourly-billing model has placed justice out of reach for most people except large coporations and the very wealthy. Our ministers of justice have to lead change by fixing imbalances such as those at the License Appeal Tribunal for ONHWPA claims. They are fully aware of the problems and need to take real action.


When the NSRLP Advisory Board met in Windsor two weeks ago, we looked back at our 2015 Strategic Plan (which you can read here) and talked about progress made towards our overarching goal – to raise public and justice system professionals’ awareness of the SRL phenomenon, and its impact on Access to Justice for Canadians.

The NSRLP mandate

Board member and former SRL Jennifer Muller summed up the NSRLP mandate as follows:

“At the heart of our mandate is the intention to challenge the negative stereotype of SRLs. Each project and every interaction that the NSRLP had with anyone this year furthered this important goal of changing how others see and understand SRLs.”

Jennifer pointed out that this meant “building this understanding from the bottom up, beginning with law students.” Law student representative Erin Chesney added:

“We need to focus on law students because they are the future lawyers…

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Home Alone: “I thought Tarion was my friend”

The article below is a must-read for new home/condo buyers in Ontario.  Please take a minute to read the excellent guest column published in The Toronto Sun (27/11/15.), by former MPP Rosario Marchese.

Many consumers have found out how hard it is to deal with Tarion, only when its too late.

Real estate agents and lawyers know surprisingly little about the Tarion warranty, its limitations, and its propensity to take the side of builders when homeowners discover defects.

If you discover construction defects in your newly-built home…..

Consumer's Reform Tarion

… and we’re not talking paint smudges on mirrors, but serious HVAC or Building Code violations, you may find yourself facing Tarion and the builder with their experienced lawyers fighting you in court (the License Appeal Tribunal, LAT).

Several cases I’ve witnessed make you think the homeowner’s actually the bad guy, and the builder had nothing to do with building the home.  “I don’t have to pay attention to Building Code”, scoffed one builder under oath to acquiescent faces of Tarion’s and his own lawyer.  The adjudicator in this case actually said on record: “The Ontario Building Code is not really relevant to Tarion”.   These are the same people who guarantee consumers a new home “free of defects in workmanship and materials”, under Ontario law.

Consumers hope the review of Tarion, recently announced by Minister Orazietti appointing respected judge Douglas Cunningham as reviewer, will be the silver bullet.

The system needs to solve problems, not create more at the taxpayer’s and new home buyer’s expense.

Minister Orazietti has oddly stated publicly he thinks the review will validate Tarion has having good consumer protection measures. Why do a review then?

He’s a politician, so this might be political posturing, an attempt at face-saving, since his government has known for over a decade there are serious problems with lack of transparency and accountability at Tarion.

I thought Tarion was my friend“, explains one homeowner. Then you find them heavy-lawyering you, shielding the builder from accountability for his defects. You’re home alone.

Consumers hope for justice, finally.  A fair, transparent, balanced, and public investigation, with a full examination of the consumer experience, not Tarion’s version of it.

We sincerely hope we won’t be left with Home Alone 2.



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Using a sledgehammer to kill a fly: the License Appeal Tribunal

Access to justice means providing equal access for all citizens, not just for large corporations and wealthy individuals.

For years consumers have voiced serious concerns about lack of a level playing field for new home buyers who appeal Tarion’s warranty decisions at the Ontario License Appeal Tribunal (LAT).

Consumers have been telling their MPPs, LAT management, and Ontario Government ministries for years the LAT is not  a “fair, timely and accessible dispute resolution” forum, as promised in the Tribunal’s mission statement.

Homeowners find themselves at the LAT up against experienced litigators from Tarion’s in-house legal department and outside counsel, as well as the builder’s lawyer. Most consumers have to self-represent due to the high cost of lawyers with hourly billing rates of from $450-850 per hour, as well as the high cost of experienced expert witnesses.

The onus of proof is on the homeowner to prove often highly complex construction defects. There is an asymmetry of information since Tarion has information from the builder on what he did, but the consumer is left on his own to try to discover exactly what the builder did wrong.  Experienced litigation lawyers use adversarial tactics like attacking the credibility of witnesses, using procedure and case law to confound the opponent, using delays, motions and other wearing-down tactics, these are all part of business as usual in the courtroom.

It is no wonder consumers lose over 90% of the time at the LAT in appeals from Tarion decisions.  With these odds, many have given up even trying. And the wrong-doers walk away scot free.

We’d all like to come to court with the best lawyers money can buy, and thereby increase our chances of winning. But the number of self-represented litigants is growing. Lawyers have priced themselves out of the middle class market, and the access to justice problem grows. This has raised alarm bells at the highest levels of the judicial establishment, with many senior judges and policy-makers saying that we can’t continue with a legal system where only large corporations and the wealthy have access to justice.500_F_30213842_JaLlWxcIGsN5ZIptyIHiERagSQ6z7YrG

Why isn’t the LAT providing solutions to the many access to justice problems they’ve known about since at least 2007?

In early 2014, I wrote to the LAT’s Vice-Chair, Mr. Yee, and asked him what he will do to improve access to justice for consumers at the LAT. I asked how the Access to Justice Report “A Roadmap for Change” (Oct. 2013) commissioned by the Chief Justice of Canada would be affecting the LAT. He responded the LAT would be implementing measures in line with recommendations in the federal report.

Aside from these promises by both the LAT and its oversight body, SLASTO, nothing concrete seems to have been done.

Problems such as missing court recordings, (in the 2015 Ferland/Ferenc case where complaints about bullying are “missing”); prolonged delays in hearings ( 1 1/2 years to accommodate lawyers’ schedules is not timely resolution); unreasonable delays in rendering decisions, (130 days is not within the 30-day given time-frame); allowing adjudicators’ to self-judge complaints about their own conduct… all these disturbing incidents have taken place since the LAT’s promise to improve.

MPP Randy Hillier, the PC Justice Critic, asked the Attorney-General in the Legislature last week on Oct. 21st and 22nd, 2015 when she will modernize the out-dated, complicated, and inefficient Tribunal model in Ontario.  She has been made aware of serious process problems at the LAT since taking office in 2014.

If the LAT is consulting with consumer stakeholders for suggestions on how access to justice could be improved, here are a few:

  1. A legal “triage” service should be created at the LAT to help consumers determine what remedy is best suited to the particular home defect they’re trying to resolve: is this a breach of warranty, or a breach of contract? Is the consumer self-represented? Would mediation instead of a courtroom get the problem fixed in a more timely and cost-efficient way? A knowledgeable, friendly, IMPARTIAL legal official at the LAT should be available to consumers as part of an avoiding-the-courtroom strategy. All that is available now is a receptionist with no legal training, and a generic e-mail contact.  To tell consumers “get legal advice” is unhelpful, and not the way to resolve problems.
  2. No more use of the courtroom if the consumer is self-represented. Mediation, mediation, mediation. Trained, independent mediators, perhaps with an engineering degree should be available, since many disputes usually involve building technology, not strictly legal issues.
  3. Investment in on-line dispute resolution (ODR) for some disputes under a certain dollar amount. Some commonly found new home defects like squeaky floors or leaky basements shouldn’t have to go to the LAT to get resolution. Since Tarion usually wins at the LAT, there’s a perverse incentive for them to use the courtroom when they know they can win there.  (See article re ODR, Law Times, March 2, 2015)
  4. If the consumer is self-represented, and Tarion wants to proceed to the LAT, they should provide an equal amount to the consumer out of the warranty fund for their defense.  This would cut down on the over 90% success rate Tarion now enjoys at the LAT by using expert litigators to fight self-represented consumers.
  5. There should be an annual limit on all Tarion’s legal expenditures, and this should be transparent to demonstrate to the public Tarion is using it wisely. As a large government monopoly, Tarion has a responsibility to the public to make sure its spending the money for consumer protection, according to its mandate, not builder protection, or to avoid warranty pay-outs.
  6. The current silo-thinking between Tarion and the LAT and both their oversight Ministries is compounding the access to justice problem. The 2013 Report on Access to Justice suggests a co-operative, collaborative approach, and urges organizations to work together to implement reforms.   As the finger-pointing continues at the LAT, the consumer gets left with the problem, and is the party least likely to be able to bear the financial and emotional consequences of it.



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“Moral Hazard” and the Tarion monopoly

Many new home buyers have found themselves in court, at the License Appeal Tribunal (LAT), trying  to get compensation for construction defects from Tarion, the government monopoly. All buyers of new homes pay a mandatory warranty fee passed on to them by new home builders in the agreement of purchase and sale.

At the Tarion Annual Public Meeting (01/06/15) a consumer asked Tarion how much it spends on outside litigators to fight homeowners in court, in addition to their in-house lawyers. Tarion replied it was “unable to provide specifics“; see Tarion website “Annual Public Meeting summary, 2015”.  Tarion can provide specifics, but they apparently don’t have to . Tarion is unfortunately not subject to any scrutiny by the Ombudsman of Ontario or the Auditor General. Its been described as a “black box” by a former prominent MPP.

For Bay Street law firms who can bill anywhere from $800-$1,000 an hour, to score a client like Tarion is a match made in heaven.

But for consumers, mostly self-represented due to the high cost of litigation lawyers, this creates an uneven playing field. The “asymmetry of information” in these cases where Tarion aligns its interests with the builder’s to get rid of claims, adds to the unfairness of the using the courtroom to resolve disputes. The homeowner has the burden of proof to prove defects in a home he didn’t build. He has to pay as well for expert engineers, while Tarion can afford top engineers and top lawyers paid for by the warranty fund, without disclosing these costs to anyone.

Since Tarion has greater access to information, unlimited access to lawyers and engineers, no disclosure of legal expenditures, this seems to create a “moral hazard” for consumers. A moral hazard occurs when a party with more information may be tempted or incentivized to behave inappropriately in relation to the party with less information and resources, in this case the consumer.

Time and time again, experience tells us we can’t blindly trust large corporations to “do the right thing” – without constantly monitoring them. Even more so in the case of government monopolies with weak oversight like Tarion. Trust us, we’re protecting consumers, but no one can verify it.

Unfortunately Tarion can take greater risks in litigation because they have deeper pockets, they don’t have to disclose their legal costs to the public, and they win most of the LAT cases, 94- 99%.  If they had to pay a fixed fee to a law firm for all their legal work, they may be incentivized to fight fewer cases in court, to work harder at problem-solving, and to shorten the length of litigation. Long, complex, costly court cases only favor deep pocketed corporations and their lawyers, not the consumer or the taxpayer.

Where’s the incentive in the Tarion system for shoddy builders to mend their ways? The commercial interests of Tarion’s outside lawyers are mis-matched with those of consumers who just want their homes fixed and their lives back. No one in authority is monitoring whether this system is fair or balanced for the consumer, no one is scrutinizing whether Tarion is actually doing what its supposed to be doing – protecting consumers and regulating the industry.

The consumer and the taxpayer bear the burden of this lack of oversight.  With 8 builders on Tarion’s board, its no wonder this monopoly continues to make builder-friendly policies. Tarion seems to have been “captured” by the very industry it is supposed to regulate, a phenomenon economists call “regulatory capture”.

A recent letter I received from an MPP this week stated: “Tarion has a built-in interest to enforce strong building and customer service standards, since preventing bad builds is less expensive than honoring a warranty and pursuing the builder in court.

Preventing bad builds“? Tarion isn’t doing that. All you have to do is read the press reports of class-action lawsuits for faulty new construction and falling glass in Toronto. How is this “less expensive“? Tarion won’t disclose its legal expenditures. “Pursuing the builder in court“? Tarion doesn’t pursue the builder in court, Tarion aligns itself with builders and fights consumers in court (LAT) over warranty coverage. Whoever wrote this sentence has never attended a LAT hearing which is a two-on-one, Tarion and the builder’s lawyers fighting the self-represented consumer.

Good luck to those who believe Tarion has “a built-in interest” to clamp down on shoddy builders because its “less expensive than honoring a warranty and pursuing the builder in court.” In a recent LAT hearing (link below) lawyer Bob Aaron concluded the homeowner shouldn’t have had to go to the LAT to get his squeaky floors fixed. Just because it might cost money we can’t trust Tarion to avoid the courtroom. We need effective oversight and monitoring to ensure Tarion will not resort to the courtroom (LAT) simply because they know that’s where they usually win.

Perhaps a suggestion to deter over-lawyering: make Tarion pay the consumer an amount out of the warranty fund equal to what Tarion itself plans to spend on legal and engineering fees.  The playing field needs to be fair in order to achieve a just solution for all parties.

Current discussions in the Legislature on Bill 106, the Condo Act, need to focus on how to prevent disputes before they begin, how to make Tarion clamp down on shoddy building, provide protections for buyers of freehold homes as well, and make Tarion assume its responsibility as regulator of the industry. No more courtroom quagmires where deep-pocketed corporations have the balance of power.

The myriad of class action lawsuits for falling glass facades in Toronto is a huge problem for society which may have been prevented by proper oversight of building methods and materials. Now the costly finger-pointing has become a legal whodunnit with huge costs to our families and our city left with a stock of sub-standard buildings.

The link (below) to a legal analysis of the falling glass problem starts off with – “Of particular concern to buyers and to the public is the fact that these incidents (falling glass facades) continue to appear in the news.” Not so. Actually buyers are served by these incidents being made public, as well as the names of the builders, if Tarion’s Builder Directory were accurate. The average consumer is not served by shifting these problems to the courtroom.

Tarion as industry regulator needs to clamp down on shoddy builders it continues to license, and increase mediation and dispute resolution for new home buyers. But it needs to be effectively monitored by an independent authority such as the Ombudsman or the Auditor-General. (Bill 60′s recommendations)

It’s time for our legislators to stop blindly trusting Tarion, stop enabling them while they seem to end up shielding shoddy builders from accountability and filling the coffers of high-priced law firms.


re: to court for squeaky floors

re: falling glass facades:


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Lack of transparency, accountability of government monopoly – creates access to justice problems for consumers

The National Post’s Christie Blatchford describes in the article below a “Kafka-esque legal battle” of 27 years for a new home buyer.

Sadly, this is not the only consumer nightmare created and enabled by this opaque provincial government monopoly and its seemingly unlimited use of lawyers.

Meaningful transparency and accountability to the 37-year-old Tarion legislation is long overdue. Builders and their powerful lobbies who dominate Tarion’s board are content with the staus quo, however.  For obvious reasons. But Tarion was not created to protect builders: it was created to protect consumers.

Unfortunately no one can verify if this is actually being done. Consumer stories like the one below tell quite another story.

We rely on our free press to “speak truth to power.”  Our legislators may be too enamored with the power and influence of the building lobbies to take any real action.

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