“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 http://www.tarion.com, “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:  http://www.tarion.com/About-Tarion/Pages/Dispute-Resolution-Review.aspx

———————-

 

 

3 Comments

Filed under Uncategorized

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.

NSRLP

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…

View original post 1,018 more words

2 Comments

Filed under Uncategorized

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.

http://http://www.torontosun.com/2015/11/27/review-of-tarion-long-overdue

3 Comments

Filed under Uncategorized

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.

……………………………….fotolia_82017943

5 Comments

Filed under Uncategorized

“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.

LINKS:

re: to court for squeaky floors

http://www.thestar.com/life/homes/2015/09/05/homebuyers-complaint-floors-tarion-aaron.html

re: falling glass facades:

http://www.slideshare.net/fmclaw/0912-groulx-karenlegalfalloutfromfallingglass-14653387

3 Comments

Filed under Uncategorized

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.

http://news.nationalpost.com/full-comment/christie-blatchford-homeowners-kafka-esque-legal-battle-with-builder-and-warranty-agency

1 Comment

Filed under Uncategorized

Tarion should embrace its critics, not marginalize them

In a recent article in Toronto’s Globe and Mail (05/27/13), leadership specialist Barbara Morris explains why effective leaders embrace their critics, and learn from this.

Many of us hope senior management of Tarion Warranty Corporation will read this article (link below).

As a “consumer protection” monopoly of the Ontario government, a private corporation exempt from the Auditor General’s and Ombudsman of Ontario’s oversight, Tarion has all the more reason to listen to consumers, whether they like the feedback or not. Especially important is feedback from consumers who didn’t benefit from the warranty protection Tarion says it provides.

The oversight Ministry, (“working with Tarion”) should also be responsive to consumer feedback, especially since there are very few ways to bring transparency to a monopoly whose current legislation doesn’t provide much.  Tarion’s former Chair stated in a glowing report on his own 10-year term (Ottawa Citizen, 15/05/15) that there are advantages to Tarion’s current oversight model, “keeping the government’s nose out of doing things.” No doubt this is an advantage for senior executives. But that’s exactly the problem most consumers raise: lack of transparency and scrutiny of this monopoly, described as a “black box” by a former prominent MPP.

“Trust but verify” seems to make a lot of sense. Consumers want to trust Tarion, but is anyone in authority verifying?

Tarion attacking the credibility of consumers who take their own time and money to give valuable feedback is not helpful. Ignoring, distorting, or trivializing consumer questions is not helpful. Senior management saying “we’re not going to answer any questions which have already been asked”, or “I doubt I could say anything which could make YOU happy, madam” (Tarion Annual Public Meeting, 04/2014), comes across as imperious, ignoring the content of the question, brushing aside like flies those who ask inconvenient questions about policy and process.

This is a sign of managerial weakness, not strength.

Ms. Morris states in her article: “the most effective leaders listen to critics as a means of acquiring helpful feedback to improve their personal and organizational performance.”  She adds: “when a leader is open to critics, it completely changes the dynamic – people feel relaxed and empowered and it makes for a more honest environment.”

Value contrarians; learn from mistakes ” she advises.

How can a consumer organization develop up-to-date consumer policy if it shuns feedback, especially from those who’ve experienced problems with the warranty and ended up paying for shoddy builders’ work? Tarion is a complex, opaque organization, and anyone taking time to write to senior executives, meet with MPPs, attend the Legislature for tabling of new legislation, should be deserving of respect, not derision. Some of these consumers have persisted after 2, 4, or in some cases 10+ years, because they see injustices which still need to be fixed, and don’t want others to suffer as they have.  Consumers who know the organization best often have the most valuable input for improvement.

Recently I put together as a volunteer a consumer focus group to provide feedback to a consultant hired by Tarion. All of the consumer participants did this on their own time, at their own expense.  All of them provided thoughtful, detailed, reasoned feedback on Tarion’s “dispute resolution process”. This was done in a professional and helpful way, and I know many put aside their anger and frustration to focus on clear feedback and suggestions. I’m very proud of these consumers. I’m proud of all those who continue to fight for reforms as consumer volunteers. Tarion can learn a lot from this feedback. These consumers are well-meaning, articulate, very knowledgeable about Tarion, and want to help others avoid the hardship they’ve experienced. This is something to encourage, not brush aside.

In the words of both Tarion’s CEO and their former board chair: “(Tarion’s critics) “are a small handful of people who are relentless“. If that’s true, it should be turned into a positive. Through these people Tarion can gain relevant, up-to-date market intelligence for consumer policy deliberations. At present only lip service is being paid to real consumer input, as many experienced in the recent Builder Bulletin 20 “consultation”.

Criticism goes with the territory when you become a leader, especially when you’re running a government monopoly weak on public transparency.

Ms. Morris advises leaders in her article: “Actively and optimistically  pursue new opportunities;” (…) “seek different perspectives; value contrarians”.

Consumers bring valuable feedback to the policy-making table. This can’t be done through behind-closed-door sessions, using anonymous participants with superficial knowledge of the warranty experience, or employees who may feel they have to give management the feedback it wants to hear.

Message to Tarion executives and board members: don’t stifle real consumer feedback, or delete, ignore, or distort consumer questions about your consumer policies. This is a job you are amply paid to do. Listening respectfully to consumers is a big part of a consumer protection organization’s first and foremost task.

Ms. Morris ends her article with this advice: embrace your critics, use criticism constructively, embrace opportunities for growth.

Tarion would do well to listen to this advice.

………………….

link to article: http://www.theglobeandmail.com/report-on-business/careers/careers-leadership/why-leaders-should-embrace-their-critics/article11945052/

2 Comments

Filed under Uncategorized

2Civility – The Facts About Self Represented Litigants

NSRLP

Illinois Supreme Court Commission on Professionalism.

For the last several years the National Self Represented Litigants Project (NSRLP) has been studying Self Represented Litigants (SRLs) in Canada to determine why the number of SRLs continues to climb year after year.

http://www.2civility.org/the-facts-about-self-represented-litigants/

View original post

Leave a comment

Filed under Uncategorized

Premier Wynne, Minister Orazietti, PLEASE FIX TARION NOW, or abolish its monopoly

Dear Premier Wynne, Premier of Ontario

Dear Minister Orazietti, Minister of Government and Consumer Services,

You have frequently referred me to your Minister Orazietti, Premier Wynne, and he does not respond.  So I am writing to both of you, again, for help.

New home buyers in Ontario continue to suffer from construction defects in their newly-built homes, and lack of protection by Tarion, the “consumer protection” monopoly of your government.

For years Tarion has been critiqued by consumers, MPPs, members of the press and the legal profession, for lack of transparency in its operations.  Tarion executives continue to tell us they’re protecting new home buyers, while many consumers see Tarion protecting new home builders. Consumers and members of the Legislature have for years implored your government to bring meaningful oversight and transparency to Tarion and deliver on its consumer protection mandate. Yet there has been no meaningful improvement.

There is now another Bill before the Legislature to bring transparency and accountability to Tarion, Bill 60, the Tarion Accountability and Oversight Act.  Minister Orazietti, you have made it known via your press office you will not support it. Your Liberal MPP colleagues have stonewalled consumers who’ve asked to speak with them about supporting Bill 60, and all have passed the buck back to you as minister responsible for Tarion. You’ve indicated you will keep the current “Delegated Administrative Authority” (DAA) oversight model.

In order to try to guess what your government’s thinking might be, since you won’t tell us, I’ve re-read a copy of the “DAA model review” your government commissioned in 2008 with the consultant Todres and Associates.

That report outlined problems with Tarion’s DAA oversight model. Many of these problems still – a full 7 years later – continue to cause financial and personal hardship to Ontario’s new home buyers. You are fully aware of these problems since you’ve been copied on all the correspondence outlining the human cost of these financial and legal nightmares.

The risk of poor construction quality should not be borne by the consumer: the risk needs to be shifted back to the builder who caused it. Tarion should not be shielding marginal builders from accountability. As industry regulator, Tarion should be providing deterrents to shoddy building and enforcing them. This is often not the case.

Many of the specific problems outlined in the 2008 “DAA” model review persist.

Some of these are:

  1. The overwhelming influence of the builder lobby group the Ontario Home Builders Association (OHBA) over policy-making at Tarion. This is referred to as the “entrenched primacy” of the OHBA (pg. 268 of the report). A recent example is the builder-friendly changes made to Builder Bulletin #20, after a perfunctory “consultation” with consumers. This consisted in providing a highly legalistic document on-line for consumer feedback. The Tarion Liaison Committee of the OHBA undoubtedly had their lawyers interpret this document for them and make sure their interests were understood and protected. Where was the consumer protection in this process?  I was one of two consumers who participated on-line. I am deeply concerned about this process, and the builder-friendly policy changes which resulted from it.
  2.  The DAA review mentions there are to be consumer representatives on all board committees. Who are they, and what are their consumer qualifications? You have not replied to these questions. The CEO of Tarion said that if the Ministry appoints board members, they’re consumer advocates.
    The Tarion website shows 8 builders, 3 financial experts, and 5 board appointees with general corporate backgrounds. No consumer advocates. If a decision were to come before the board, are we to believe the 8 builders would vote in favour of protecting consumers or protecting their own profit motives?
    Tarion has expressly forbidden consumers from contacting board members, as well as the members Consumer Advisory Council (CAC) members. The CAC has made it known they will remain anonymous and will not respond to consumers (Tarion Annual Public Meeting, 2015.)  How are board members to understand consumer issues if they are insulated from them?
    The DAA Review mentions (pgs. 269-274) consumer input is critical to Tarion’s policy-making. Page 274 of the report states:
    It is clear to board members that the Consumer Committee was not functional (…) new structural approaches are required and a new approach is being taken.”
    What has your ministry done in 7 years to increase consumer input into policy-making? Your ministry, “working with Tarion”, tells us “Tarion is a consumer protection organization.” (Toronto Sun, article by Tarion CEO Bogach, 07/08/15). How can you demonstrate this, if consumer involvement in policy-making is un-transparent, anonymous, and behind closed doors?
  3.  The “New Homebuyer Ombudsperson”, a new Tarion position announced in the 2008 DAA review, is not independent. This concern was voiced in the report 7 years ago, and continues to be a serious one. Consumers have brought this to the attention of Tarion and the ministry. No meaningful response. Consumers are led to believe this ombudsperson is independent of Tarion, but find out in several cases he’s shared confidential information with his employer which could negatively impact the consumer’s case, or he’s recommended consumers take their cases to the License Appeal Tribunal (LAT) when his own employer wins 93-99% of the time. How is this position impartial? The only assurances come from the internal ombudsman himself: he’s independent because he says so (Annual Public Meeting, 01/06/15).
  4. The nature of “Tarion stakeholder” has “been broadened” according to the DAA review and the Tarion Annual Reports (DAA review, pg. 300). Tarion’s board members and employees are required to “act in the best interests of Tarion and all its stakeholders” according to Tarion’s website. This is very problematic, since denying a claim could be in the interests of Tarion and builders, but not in the homeowner’s interest. This is a serious conflict of interest which has been pointed out repeatedly to Tarion, the ministry, and both Premiers since 2008.  Tarion’s CEO continues to tell the public that Tarion is “a consumer protection organization”. This makes good press and makes politicians look like consumer champions, but it’s misleading the public, masking the imbalance in consumer input at the policy-making table. The DAA review stated power was “too heavily skewed toward one association“, meaning builders. (DAA review, pg. 271). This continues to be an overwhelming concern for consumers.

Premier Wynne, and Minister Orazietti, 7 years has been a long time for families suffering under the current unbalanced Tarion monopoly. The “perception of capture” by other stakeholder groups, builders, (pg. 282 of the report), continues to grow and create injustices for new home buyers.  The risk of poor quality construction should be transferred back to the builder, not the home buyer, as the report mentions.

You seem content with the current DAA model and seem to shun new legislation to bring Tarion under the oversight of the Auditor General and Ombudsman of Ontario. As the DAA review concluded (pg. 280), “Best efforts need to be directed to enhance transparency.”  That’s what Bill 60 proposes to do. If you will not support Bill 60, what is your government doing to make Tarion accountable and transparent? The DAA model has proven to be ineffective and weak.

Many consumers see Tarion as another powerful builder lobby group, masquerading as a consumer protection organization, enjoying one of the weakest oversight models in government.

What is your plan, Premier Wynne and Minister Orazietti, with your majority Liberal government, to fix this lax oversight model you’ve known about for over 7 years?

Consumers rely on you to take meaningful action to make this monopoly truly serve consumers, as the legislation (ONHWPA) intended. Or perhaps its monopoly status should be abolished, and its $400+ million in assets used to fix construction defects in new homes which have been created and tolerated under this faulty system.

—————————

DAA Review 2008

http://www.sse.gov.on.ca/mcs/Documents/DAA_Model_Review_Report.pdf

4 Comments

Filed under Uncategorized

Getting A2J onto the Political Agenda in the Federal Election

NSRLP

On October 19, Canadians will go to the polls to vote for federal representatives. There will be struggles over critical issues including the funding of public services, tax reform, immigration and social integration, and of course, leadership values and qualities. Will we hear anything about Access to Justice?

So far, the answer looks like no. Access to Justice – affordable resolution processes, defence of core rights, legal protection of the vulnerable, and access to effective representation – is nowhere to be seen on the agendas of the major political parties.

Criminal justice issues – mandatory minimum sentencing regimes, law and order crackdowns, or “alternatives” to the costs of incarcerating so many Canadians – sometimes make it onto the political agenda, but family law? Civil law? Not a whisper.

Is Access to Justice is important enough to ordinary Canadians to be a vote-getter? Something that candidates feel they need a position…

View original post 712 more words

Leave a comment

Filed under Uncategorized