CITATION: Lopresti v. Rosenthal, 2016 ONSC 7494
COURT FILE NO.: CV-09-390883
DATE: 20161219
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Maria Lopresti, Anthony Lopresti, Frank Lopresti, Charlie Lopresti and Mary Moncada, Plaintiffs
AND:
Gary Alan Rosenthal and Scarborough Grace Hospital, Defendants
BEFORE: Madam Justice Darla A. Wilson
COUNSEL: Aleks Mladenovic, Counsel for the Plaintiffs
Adam J. Patenaude, Counsel for the Defendant Rosenthal
HEARD: By Written Submissions
ENDORSEMENT on costs
[1] This is a medical negligence action that was set to commence trial on September 26, 2016. I conducted a further pre-trial immediately prior to the commencement of trial, and the case settled. Counsel could not agree on costs and requested that written submissions be sent to me, after which I would fix the costs. That has been done.
Background
[2] The Plaintiff, Maria Lopresti [“Mrs. Lopresti”], underwent a laparoscopic cholecystectomy performed by the Defendant physician, Gary Alan Rosenthal [“Dr. Rosenthal”], on November 13, 2007. Mrs. Lopresti claimed that she ought not to have undergone the surgery because her symptoms were caused by an ulcer and were not related to her gall bladder. The Plaintiff suffered a perforation of her bowel during the procedure and went on to develop sepsis, and she required further surgery. She developed deep vein thrombosis [“DVT”] and had an extended stay in hospital.
[3] She issued a statement of claim against Dr. Rosenthal and Scarborough Grace Hospital in 2009. Defences were served and the matter proceeded in the usual course through discoveries and mediation. The parties secured expert reports on the liability issues and on damages. The action was discontinued against the Hospital; thus, I will refer to Dr. Rosenthal as the Defendant. The matter was set down for trial in 2013.
[4] There were a number of pre-trial conferences. The first trial date was set for May 25, 2015. Damages were settled at $400,000 inclusive of interest in February 2015. One of the Plaintiffs’ experts, Dr. Doris, was unavailable for the May 25, 2015 trial date for health reasons, so the trial was adjourned. A new trial date of October 26, 2015, was fixed. That date was adjourned because counsel for Dr. Rosenthal delivered a new expert report a few days before the trial. McEwen J. ordered the Defendant to pay the costs thrown away to the Plaintiffs in the amount of $22,000 plus disbursements of $5,430.75. A new trial date of September 26, 2016, was set. As I have noted, the case resolved on the day it was set to commence trial.
Positions of the Parties
Plaintiff
[5] The Plaintiffs argue that the Defendant physician refused to engage in settlement discussions until the morning of the trial and maintained the position that Dr. Rosenthal was not negligent in the face of clear expert evidence to the contrary. Counsel submits that the Defendant ought to be ordered to pay substantial costs to discourage this type of behaviour. Mr. Mladenovic argues that it is an access to justice issue because people with valid negligence claims will be discouraged from advancing these lawsuits because of the costs associated in doing so and the unwillingness of physicians to make settlement offers.
[6] Counsel for the Plaintiffs requests costs of $169,238.03 plus disbursements of $64,371.90 plus HST, on a partial indemnity basis. Counsel argues that by the time the settlement was achieved, he had done the majority of the trial preparation and significant expense had been incurred.
Defendant Physician
[7] Counsel for Dr. Rosenthal submits that the quantum of costs sought by the Plaintiffs is neither fair nor reasonable and not what this Defendant might reasonably expect to pay upon settlement of the case before trial.
[8] The Defendant submits that the theory of the Plaintiffs’ case changed over time, as did its focus, and that the Defendant should not have to pay for the excessive amounts of time claimed by counsel for the Plaintiffs as a result of this.
[9] The Defendant also submits that it was because the theory of negligence advanced by Mrs. Lopresti changed over the course of the litigation that Dr. Rosenthal required a new expert report from a hematologist in October 2015. The Plaintiffs’ theory that the actions of the doctor caused Mrs. Lopresti to develop DVT was advanced late in the course of the litigation. As a result of the delivery of this new expert report, the trial was adjourned, but the Defendant has already paid the costs thrown away for that adjournment.
[10] Finally, counsel submits that the hours claimed by the Plaintiffs’ counsel are excessive, almost double the time spent by defence counsel. The rates claimed are too high; $325 per hour for senior counsel is reasonable on a partial indemnity scale. Furthermore, the damages were settled in early 2015, and the issues are not complex; it was anticipated to be a five day trial.
[11] Counsel for the Defendant suggests that a reasonable figure for costs is $100,000 plus taxes and for disbursements, $25,000 to $30,000.
Analysis
[12] The Plaintiffs are entitled to reasonable costs of the action. This is not a case where an offer to settle affects the costs award, so I am tasked with determining the proper amount of costs on a medical negligence case which settled just prior to commencement of trial.
[13] The court is granted a wide discretion when determining the appropriate quantum of costs. Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, provides as follows:
“Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.”
[14] Rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, (“the Rules”) identifies the factors a court may consider when exercising its discretion to award costs:
(1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,
(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;
(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;
(a) the amount claimed and the amount recovered in the proceeding;
(b) the apportionment of liability;
(c) the complexity of the proceeding;
(d) the importance of the issues;
(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;
(f) whether any step in the proceeding was,
(i) improper, vexatious or unnecessary, or
(ii) taken through negligence, mistake or excessive caution;
(g) a party’s denial of or refusal to admit anything that should have been admitted;
(h) whether it is appropriate to award any costs or more than one set of costs where a party,
(i) commenced separate proceedings for claims that should have been made in one proceeding, or
(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and
(i) any other matter relevant to the question of costs.
[15] In determining the appropriate amount of costs to which the Plaintiffs are entitled, I am guided by the principles set forth by the court in Andersen v. St. Jude Medical, Inc. (2006), 2006 CanLII 85158 (ON SCDC), 264 D.L.R. (4th) 557 (Ont. Div. Ct.), leave to appeal refused, 2006 CarswellOnt 7749 (C.A.), at p. 566:
The discretion of the court must be exercised in light of the specific facts and circumstances of the case in relation to the factors set out in rule 57.01(1): Boucher [Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.)], Moon [Moon v. Sher (2004), 2004 CanLII 39005 (ON CA), 246 D.L.R. (4th) 440 (Ont. C.A.)] and Coldmatic [Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 2005 CanLII 1042 (ON CA), 75 O.R. (3d) 638 (C.A.)].
A consideration of experience, rates charged and hours spent (formerly a costs grid calculation) is appropriate, but is subject to the overriding principle of reasonableness as applied to the factual matrix of the particular case: Boucher. The quantum should reflect an amount the court considers to be fair and reasonable rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering [Zesta Engineering Ltd. v. Cloutier (2002), 2002 CanLII 25577 (ON CA), 21 C.C.E.L. (3d) 161 (Ont. C.A.), at para. 4].
The reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair and reasonable: rule 57.01(1)(0.b).
The court should seek to avoid inconsistency with comparable awards in other cases. “Like cases, [if they can be found], should conclude with like substantive results”: Murano [Murano v. Bank of Montreal (1998), 1998 CanLII 5633 (ON CA), 41 O.R. (3d) 222 (C.A.)] at p. 249.
The court should seek to balance the indemnity principle with the fundamental objective of access to justice: Boucher.
[16] The Court of Appeal has made it clear that the overriding principle when fixing costs is that the amount of costs awarded be reasonable in the circumstances: Davies v. Corporation of the Municipality of Clarington, 2009 ONCA 722, 100 O.R. (3d) 66, at para. 52.
[17] In Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), at para. 26, the Court of Appeal noted specifically that the overall objective of fixing costs “is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant.”
[18] I will address the r. 57.01(1) factors that are relevant to my costs determination as well as the application of the principle of proportionality: r. 1.04(1.1). On the spectrum of complexity in medical negligence actions, this was not a complex case. Damages were agreed upon so the trial involved the determination of whether Dr. Rosenthal breached the standard of care in his treatment of the Plaintiffs and, to a lesser extent, whether the DVT was causally related to any negligence. The trial was estimated to last five days, with the Plaintiffs calling Mrs. Lopresti, her husband and her son, as well as two experts to opine on the standard of care and causation regarding the DVT issue. The Defendant intended to call Dr. Rosenthal as well as two experts.
[19] Without a doubt, the case was of great importance to both the Plaintiffs and Dr. Rosenthal. In terms of the amount at stake, damages were agreed upon at $400,000.
[20] I do not find that the conduct of any party unnecessarily lengthened the proceeding. Counsel for the Plaintiffs submits, in essence, that liability was clear-cut and ought to have been admitted by the Defendant at an early stage. I do not agree with this submission. Medical negligence cases, like other types of professional negligence cases, turn to a large degree on the opinions of the experts.
[21] In this case, the Defendant had the opinion of Dr. Lloyd Smith, a general surgeon, who provided a report dated October 7, 2015, in which he opined that the actions of Dr. Rosenthal were appropriate in the circumstances and met the standard of care of a general surgeon. Similarly, Dr. Kovacs, a hematologist, offered the opinion that the DVT that developed was due to the complications and procedures, not as a result of the failure to prescribe preoperative heparin for the initial surgery. Thus, the defence had supportive opinions which, if accepted by the trial judge, would have resulted in a dismissal of the Plaintiffs’ action. This was not a case where liability was obvious; rather, the outcome at trial would be determined to a large extent by which expert opinion the trial judge accepted. Obviously, there was risk for both sides. That is why the Plaintiffs accepted a reduced sum and why the Defendant paid a substantial sum to settle the case. I do not find that the failure to admit liability was an unreasonable position for the defence to adopt or that it constitutes something “that should have been admitted”, as set out in r. 57.01(1) of the Rules.
[22] I agree with the submission of counsel for the Plaintiffs that because the action did not settle until the day of trial, considerable time had been expended as well as disbursements incurred in order to present the case at trial. Counsel for the Plaintiffs had to meet with his experts and prepare his lay witnesses in advance. The Plaintiffs’ expert witness, Dr. Hamilton, was already en route to Toronto from Edmonton when the action settled. I accept that because of the timing of the settlement, the amount of costs that Dr. Rosenthal could reasonably expect to pay at that point would be far greater than, for example, if the case had settled at a pre-trial conference.
[23] I agree that the trial preparation thrown away when the trial was adjourned in October 2015 was fixed by McEwen J. and that these amounts are not recoverable in the costs of the action for the Plaintiffs.
[24] Counsel for the Plaintiffs seeks fees and taxes of $191,238.97 plus disbursements of $72,882.24 inclusive of taxes, for a total sum of $264,121.21. Mr. Mladenovic, a 2001 call, claims 303.8 hours, while Ms. Stevens, a 2005 call, claims 182.2 hours. In the written material, counsel indicates that he is seeking fees “on a substantial indemnity basis”, although the materials contained in the written submissions of the Plaintiffs appear to use the partial indemnity rate for the calculation of fees. To be clear, the Plaintiffs are entitled to reasonable fees of the action on a partial indemnity scale.
[25] Mr. Mladenovic submits that the actual legal fees incurred by the Plaintiffs are in excess of $270,000, so the amount requested from the Defendant is a reduced amount. In my view, given the issues in this case, the quantum of damages and the history of the action, that is an excessive sum.
[26] Mr. Mladenovic argues that to fix costs at an amount lower than the Plaintiffs are requesting would be “to reward the Defendant’s intransigence at the Plaintiffs’ expense ... and to embolden future defendants to act in the same manner as Dr. Rosenthal.” Counsel argues that the court needs to “send a clear signal to Dr. Rosenthal and to future defendants that there are consequences to maintaining an obstinate refusal to settle a case until the last moment, even in the face of strong evidence.”
[27] In my opinion, the facts of this case do not call out for a costs order the effect of which is to sanction certain types of behaviour. It is not asserted that the conduct of the Defendant or his counsel was in any way deserving of censure. Rather, the solicitor for the Plaintiffs argues the case should have settled earlier than it did.
[28] Parties to a lawsuit have the right to have the dispute adjudicated by way of a trial even if there are reasons to settle the action short of a trial. Clearly there are consequences to a party who waits until the last minute to settle a case. In that circumstance, the quantum of fees that will be paid will be much more than if the case had resolved at an earlier stage, and the party who chose not to settle at an earlier date cannot complain that the costs are higher than they otherwise would have been.
[29] Mr. Mladenovic submits that the level of costs is an issue of access to justice. He argues that if the Defendant is not ordered to pay “significant costs”, other plaintiffs who have legitimate claims will be dissuaded from pursuing them and lawyers will be reluctant to take on these cases, which would result in a denial of compensation to “countless victims of medical negligence.” That is a broad statement, in my view, with complexities that cannot be properly addressed in this costs endorsement. Suffice it to say that it is my view that litigants, all litigants, are entitled to have their disputes adjudicated in court through the trial process if the parties have such disparate views of the case it cannot be resolved. They do so, however, knowing that our Rules provide for various cost consequences that flow directly from following that route of resolution.
[30] There are some cases of professional negligence that can be described as having a good chance of success from the outset: cases where lawyers miss limitation periods or where doctors leave sponges in a patient after surgery are but two examples of such cases. Generally, these sorts of cases resolve without the need of proceeding through a trial.
[31] Other medical and other professional negligence cases are difficult, risky cases that are expensive for plaintiffs. As I wrote in Batalla v. St. Michael’s Hospital, 2016 ONSC 1513, 81 C.P.C. (7th) 293, at para. 54:
CFA’s [(Contingency Fee Agreements)] provide important access to justice for people such as the Batallas who have a meritorious claim but do not have the financial resources to pay the costs of litigation on an ongoing basis. I can think of no better example than a medical negligence case, which requires the retainer and payment of expensive experts in order to determine whether the case has a chance of success at trial. Counsel who undertake medical negligence cases must be prepared to retain and pay these experts in order to proceed with the case; in most cases, counsel cannot look to the clients for payment of disbursements because it would be a rare case where the Plaintiff could afford to pay the costs of the experts during the course of the lawsuit.
[32] In Mishan v. York Central Hospital, 2015 ONSC 6369, I wrote, at paras. 8-10:
Generally, it is recognized that in order to succeed on a medical negligence claim a Plaintiff must secure the opinion of a qualified expert to speak to the issues of standard of care, causation and damages. Lawyers who act for Plaintiffs in personal injury and medical negligence claims usually do so on the basis of a contingency fee agreement (CFA). The understanding between the lawyer and the client in a professional negligence claim is that because these types of actions are usually difficult to prove and therefore fraught with risk, the CFA is a fair way to proceed. It is accepted that often the use of a CFA is the only way an injured party can access the judicial system-see Hunter v. 8184888 Ontario Inc. 2013 ONSC, 5245, paragraph 26.
Lawyers who take on these types of cases must be prepared to fund the expert opinions that are necessary to determine if the Plaintiff has a case that could succeed at trial. Sometimes, the expert retained will offer an opinion that there is no breach of the standard of care or that the causation issue cannot succeed. In such cases, counsel must provide his or her recommendation to the client about the wisdom of pursuing litigation.
Sometimes the “bad news” is received further down the road of litigation when significant legal fees and expert disbursements have been incurred. Lawyers who are retained on these files know at the outset that there is a possibility the action may not be successful and counsel will not be paid for time expended and disbursements paid. This is an unfortunate reality of doing this type of work.
[33] Costs are in the discretion of the judge; fixing costs is fact and result driven. Each case must be decided on its own peculiar facts, using the factors enumerated under r. 57.01(1) and the principles set out in the jurisprudence. If a party’s conduct is objectionable or worthy of censure by the court, that is a factor that the court can take into account when assessing costs. However, that is not the case before me.
[34] I pause to emphasize the directive from the Court of Appeal that when fixing costs, judges are to do so not through a mathematical process but rather by considering the various factors enumerated in r. 57.01(1) and arriving at an amount that is fair and just in all of the circumstances.
[35] The closer to trial an action settles, the greater the costs defendants can expect to pay because of the time and expense that is necessary to prepare a case for trial. That is one of the downsides of resolving a case very close to the trial date. However, regardless of the timing of the resolution of the case, the costs that are awarded to the successful party must still be proportional in all of the circumstances.
[36] Counsel for the Plaintiffs relies on Shearer v. Sewchand, 2013 ONSC 6760, a medical negligence case in which Mr. Mladenovic was successful at trial, and although damages were agreed upon at $190,000, he was awarded costs of approximately $200,000 plus taxes and disbursements. In my view, that case is of limited assistance to me in arriving at the appropriate number for costs in this case. That case is different factually, with a different history. Importantly, that case proceeded through a trial, and that plaintiff was successful and achieved a result in excess of its r. 49 offer, so part of the costs were awarded on a substantial indemnity basis, including the trial time. In the case before me, the action was settled before it commenced trial and there was no r. 49 offer that attracts a higher level of costs.
[37] In my view, close to 500 hours on this case by counsel who specialize in medical negligence cases is an excessive amount of time, given this case’s complexity and issues to be determined. It was going to be a five day trial on liability only. The damages were settled more than a year prior to trial, so the preparation was restricted to liability and causation only. The quantum of fees sought is not proportional in all of the circumstances. I am of the opinion, taking the r. 57.01(1) factors into consideration and applying them to the facts of this case, that the Plaintiffs are entitled to fees which I fix at $125,000 plus HST, a sum I consider to be fair and reasonable.
[38] The Plaintiffs seek disbursements for a number of experts, including four experts on the liability and causation issues. Dr. Doris was retained and prepared reports, but unfortunately his ill health prevented him from testifying at trial. As I have indicated, that is not the fault of the Plaintiffs and his invoices are proper disbursements, as it was reasonable and necessary for counsel for the Plaintiffs to retain him.
[39] The invoices from other experts who were retained by the Plaintiffs and delivered reports but were not going to be called at trial are proper disbursements, and the amounts claimed are reasonable.
[40] I accept that Dr. Hamilton was the most important expert for the Plaintiffs and he opined on both the standard of care and causation. He delivered four reports: the first, on August 18, 2015, was five and a half pages long; the second, on October 17, 2015, was three pages long; the third, on October 21, 2015, was a single paragraph long; and the fourth, on August 2, 2016, was four and a quarter pages long. For those reports, he has delivered an invoice for $36,560. On top of this amount, the sum of $2,102.80 is claimed for his flights and hotel accommodation for the trial. This latter amount is entirely reasonable.
[41] I have no idea how Dr. Hamilton arrived at the sum of $36,560 for the preparation of what I calculate to be about 12 pages setting out his opinions. There is no reference to a review of medical journals or scholarly articles in his reports; there is nothing to indicate how many hours he spent preparing his reports. As I have noted earlier, factually, this was not a complicated case, and there were but two main issues for determination.
[42] It is trite to say that experts are critical to a party’s success at trial; however, that does not mean that an expert can charge whatever he or she wishes to for delivery of a r. 53.03 report. The party who retained an expert may be obligated to pay the invoice of the expert, but the unsuccessful party is not obliged to do so if it is not reasonable.
[43] In Mayer v. 1474479 Ontario Inc., 2014 ONSC 2622, 33 C.C.L.I. (5th) 150, at para. 49, Leach J. stated the following:
[O]ur courts have confirmed that the principle of proportionality applies equally to disbursements, and that an expert cannot simply charge what he or she considers appropriate and then expect through counsel that such fee will be deemed acceptable by the court. In the long term, simple acceptance of disbursements which, on their face, appear to be extravagant and excessive, will encourage experts to charge excessive fees, and enhance the risk that litigation will be placed beyond the reach of most people seeking or needing access to our courts. [Citations omitted.]
[44] In Hamfler v. Mink, 2011 ONSC 3331, 38 C.P.C. (7th) 398, Edwards J. considered the issue of disbursements that seemed excessive. His comments, at paras. 14, 18, are relevant to the case before me:
By simply accepting a disbursement which on its face appears to be extravagant and excessive, will simply encourage experts to charge excessive fees. Litigation in the 21st century is at risk of becoming priced well beyond the reach of almost anyone seeking, or needing access to our courts. In far too many cases, the total claim for costs and disbursements exceeds the recovery at trial. Reasonableness and proportionality dictate that the court take a long hard look at the claim for costs and disbursements in its overall determination as to the reasonableness and fairness of the amount claimed.
Fundamentally however, the court must as I have done, direct itself to the question of whether the amount claimed is fair and reasonable. An expert can simply not charge what he or she considers appropriate and then expect through counsel that such fee will be deemed acceptable by the court. Reasonableness and fairness will dictate whether a disbursement, and in this case, whether an expert’s fee is assessable in whole or in part.
[45] In my view, the sum charged by Dr. Hamilton for four short reports is neither fair nor reasonable and ought to be reduced. Having read the reports, I find that a fair amount for the preparation of these reports is $20,000. I am of the opinion that disbursements fixed in the sum of $45,000 plus taxes is a fair and reasonable amount and one that the Defendant might well have expected to pay upon resolution of the case, and I fix them in that amount.
Order
[46] The Defendant shall pay to the Plaintiffs their costs, which I fix in the sum of $125,000 plus taxes together with disbursements fixed at $45,000 plus the applicable taxes, within 30 days.
D. A. Wilson J.
Date: December 19, 2016