International Law

When It Comes to “Reasonableness” in Costs, Look Around to See Where You Are

This post relates to a decision that dates back to last December. We only recently became aware of it. Unfortunately, the case does not appear on CanLII, so we are unable to provide a link to the reasons.

Barkley v. Vogel was a personal injury action that was tried before Mr. Justice James E. McNamara and a jury. The trial was held in Brockville. Defence counsel was from Ottawa and the plaintiff’s lawyer was from Toronto. After the jury had rendered its decision, McNamara J. had to decide the issue of the plaintiff’s costs.

The plaintiff’s lawyer had had less than ten years’ experience for most of the time for which partial indemnity costs were applicable. (Substantial indemnity costs were awarded for the period after the plaintiff’s settlement offer.) For the partial indemnity period, counsel for the plaintiff sought an hourly rate of $225.00.

Justice McNamara remarked that since partial indemnity represents about 60% of full indemnity, “that translates into an hourly rate of $375.00″.

His Honour felt that such a rate was much too high for a case being heard in Brockville. He made the following comments about the appropriate principle to be followed by the court:

In fixing an appropriate rate, at the end of the day, quantum must be guided by the overriding principle of reasonableness, that is, the reasonable expectation of both parties. The Plaintiffs have brought their action in Brockville, which is part of this court?s east region. While I share the view of Plaintiffs? counsel that the Plaintiffs were entitled to retain any lawyer of their choice, principles of fairness would dictate that the parties would expect that things like hourly rates would bear some resemblance to what would be considered reasonable in the area where the case was tried.

Applying those principles to the costs demands of Toronto counsel, His Honour said that “by no stretch would [the requested rate] have been either fair or reasonable in this region over the relevant time frame”.

Justice McNamara’s decision in Barkley has already been followed on this point by Madam Justice Heidi Polowin in Young v. RBC Dominion Securities.

Ottawa lawyers will want to keep Justice McNamara’s decision in their briefcases (and hope that lawyers in Cornwall, Belleville, Pembroke, Peterborough etc. aren’t doing the same thing!)

Full post as published by Cavanagh Williams on March 26, 2009 (boomark / email).