Couple fear they could be saddled with Air Canada's legal bill for court challenge over $2000 compensation

Andrew and Anna Dyczkowski say they have lost sleep since learning that Air Canada AC-T is taking them to court over a complaint they filed to the federal transport regulator about a delayed flight in January, 2020.

“What have I done to deserve this?” said Mr. Dyczkowski, 58, who works in the construction trades in Kelowna, B.C.

The decision that led Air Canada to seek legal action came from the Canadian Transportation Agency (CTA), a regulator that also handles air passenger claims against airlines.

In November of last year, nearly four years after the couple had submitted their complaint, the agency ordered Air Canada to pay them $1,000 each in compensation by no later than Dec. 28.

But instead of getting the long-awaited funds on that date, Mr. Dyczkowski received a notice that Air Canada was seeking to quash the regulator’s decision in Federal Court – and that he and his wife might be on the hook for the airline’s legal costs.

The case has attracted the attention of consumer advocates and legal scholars. They say recent legislative changes that make it easier to challenge unfavourable CTA decisions in court have also created an uneven playing field where airlines enjoy many advantages and passengers face financial risks far larger than the compensation that’s at stake.

The amendments, which became law in June, allow both passengers and airlines dissatisfied with complaints-related decisions by the transport regulator to ask the Federal Court to review them. Previously, parties hoping to overturn CTA orders could only do so before the Federal Court of Appeal, generally a more narrow avenue for judicial review.

The changes are part of the federal government’s continuing overhaul of the country’s air passenger rules, which is meant to, among other things, streamline the processing of consumer complaints over issues such as flight delays, cancellations and lost or damaged luggage.

But some experts worry that the new rules on judicial review could do more harm than good for passengers. The risk isn’t just that airlines will use their considerable financial resources to drag consumers through lengthy court proceedings. It is also that airlines can ask that passengers cover their legal costs, if the latter lose in court.

That’s what lawyers for Air Canada are asking the Federal Court in the Dyczkowski case, which is believed to be the first instance of an airline using the recent amendments to challenge a CTA decision.

The request is customary practice for such proceedings before the court, said Suzanne Chiodo, a law professor at York University’s Osgoode Hall Law School. And the Federal Court is highly unlikely to saddle the two passengers with Air Canada’s legal bill, she added.

“I’d be very, very surprised if the Federal Court awards costs against this couple, who literally just tried to pursue their rights,” she said.

But the court has the power to do so, and that financial risk – however small – must be “intimidating” for consumers who were only trying to claim a small amount of compensation, she said.

Mr. Dyczkowski said he and his wife had a conference call with CTA staff and a lawyer for the agency, who confirmed that they could be found liable for costs, should Air Canada win.

The issue isn’t whether CTA decisions on complaints should be subject to court challenges, said Erik Knutsen, a law professor at Queen’s University. The right to seek judicial review is standard for decisions issued by a variety of federal and provincial administrative tribunals that handle anything from landlord-tenant issues to questions around disability support and immigration matters.

But the case of complaints handled by the CTA presents a quandary for legislators because it pits consumers against corporate giants, he added.

“You’ve got someone seeking two grand and someone else who’s got billions and billions,” he said.

It’s an issue legislators heard about from consumer group Air Passenger Rights as Parliament was considering the amendments. “Given the imbalance of resources between airlines and passengers, this is likely to favour airlines that can afford the costs and risk of challenging unfavourable decisions in this way,” Gabor Lukacs, the group’s president, wrote in submissions to the House and the Senate in May.

One possible solution would be to introduce rules preventing airlines from being able to claim costs against passengers, Prof. Knutsen said.

In an e-mail statement, Peter Fitzpatrick, a spokesperson for Air Canada, described the wording around costs in the airline’s application for judicial review as “a standard statement in a litigation claim.”

He added: “In a case such as this, we do not intend to claim costs against the passengers. It is unfortunate, but unavoidable in asking for a review, that passengers be party to this action.”

Mr. Fitzpatrick said the transport regulator has been hiring new complaint-resolution officers (CROs) to manage passenger claims under a new process, as part of the recent changes. In cases where Air Canada believes an officer did not properly assess the evidence, turning to the Federal Court is its only recourse, he said. “Our intent is that this will inform future CRO decision-making,” he added.

Transport Canada did not directly respond to a request for comment about the questions of consumer financial liability and power imbalance raised by the Dyczkowski case.

“The Air Passenger Protection Regulations are there to protect passengers, and we expect our airlines to follow the rules,” ministry spokesperson Laura Scaffidi said via e-mail.