BARRIE COURT FILE NO.: CV-12-0297
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SARAH LITTLE, by her Litigation Guardian Kristina Dodds, and KRISTINA DODDS Plaintiffs
– and –
FLOYD SINTON LIMITED Defendant
T. Lehman, for the Plaintiffs
B.A. Percival, Q.C., for the Defendant
HEARD: April 25, 2018
REASONS FOR decision ON COSTS
The Trial and Jury Verdict
1This trial involved a claim for damages arising out of injuries sustained by the plaintiff Sarah Little on June 29, 2011. On her last day of grade eight, Ms. Little jumped out of the back of a moving school bus operated by an employee driver of the defendant bus line company Floyd Sinton Limited (the “Defendant”). She sustained a traumatic brain injury.
2After a four-week trial, the jury awarded Ms. Little $9,376,800. The jury found that Ms. Little was 25% at fault, reducing her damage award to $7,032,600. The parties agreed that pre-judgment interest is $19,012.50.
3Kristina Dodds is Ms. Little’s mother. Ms. Dodds claimed damages for loss of her daughter’s care, guidance, and companionship. The jury awarded Ms. Dodds $25,000. The statutory deductible is $18,692.59, leaving a net award of $6,307.41—reduced by contributory negligence, it equals $4,730.56. The parties agreed that pre-judgment interest is $368.98.
The Costs Claimed
The Plaintiffs’ Position
4In their oral submissions, Ms. Little and Ms. Dodds (together, the “Plaintiffs”) requested a counsel fee of $525,000 plus HST, having accepted the maximum hourly rates in the “Information for the Profession” adopted by the Civil Rules Committee in 2005 (the “Costs Grid”). The Plaintiffs submit that these rates should be adjusted for inflation from 2002, when they were first established. The Plaintiffs also seek $213,296.28 in disbursements.
5The Plaintiffs argue that the amount claimed for fees and disbursements falls within the range for awards in complicated personal injury cases such as this.
The Defendant’s Position
6The Defendant submits that the Costs Grid should be adjusted for inflation from its implementation in 2005, making the Plaintiffs’ resultant counsel fee $437,463 plus HST.
7The Defendant takes issue with the following: amounts charged for expert reports; fees for experts’ court attendances; a capacity assessment that the Defendant asserts was undertaken to manage Statutory Accident Benefits (“SABS”) claims; reports not utilized at trial and potentially paid by the SABS insurer; and other disbursements, including adverse costs insurance, video interviews, focus groups, research, and trial meal costs.
General Principles
8Costs are governed by s. 131 of the Courts of Justice Act, R.S.O. 1990 c. C.43 (CJA) and rule 57.01 of the Rules of Civil Procedure (the “Rules”). Section 131 grants the court a discretion to fix costs. Rule 57.01 provides guidance in that discretion’s exercise by enumerating certain factors the court may consider when assessing costs: Zander Sod Co. v. Solmar Development Corp., 2011 ONSC 3874 at para. 11.
9The court may consider any or all of the following factors:
(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
(iii) any other matter relevant to the question of costs.
10The overriding principles are fairness and reasonableness: Boucher v. Public Accountants Council (Ontario), 2004 CanLII 14579 (ON CA), [2004] O.J. No. 2634 (Ont. C.A.); Moon v. Sher, 2004 CanLII 39005 (ON CA), [2004] O.J. No. 4651 (Ont. C.A.).
11The court’s role is not to second-guess the time spent by counsel unless it is manifestly unreasonable, in that the total time spent is clearly excessive or the matter was “over lawyered”: Basdeo (Litigation Guardian of) v. University Health Network, [2002] O.J. No. 597 (Ont. S.C.) at para. 7.
12The assessment process is ultimately not a mechanical exercise: see Gratton-Masuy Environmental Technologies Inc. v. Ontario (Building Materials Evaluation Commission), 2003 CanLII 8279 (ON SCDC), [2003] O.J. No. 1658 (Ont. Div. Ct.) at para. 17. The court must take a contextual approach, applying the above-enumerated principles and factors, to determine a fair and reasonable amount in all the circumstances.
13The assessment of what is fair and reasonable in any given case is as much about what disbursements are fair and reasonable as it is about what fees are fair and reasonable: Hamfler v. 1682787 Ontario Inc., 2011 ONSC 3331, [2011] O.J. No. 6190 at para. 17, where Edwards J. provided the following non-exhaustive list of factors for the court to consider when determining the reasonableness of whether an expert’s fee is excessive:
Did the evidence of the expert make a contribution to the case, and was it relevant to the issues?
Was the evidence of marginal value or was it crucial to the ultimate outcome at trial?
Was the cost of the expert or experts disproportionate to the economic value of the issue at risk?
Was the evidence of the expert duplicated by other experts called by the same party? Was the report of the expert overkill or did it provide the court with the necessary tools to properly conduct its assessment of a material issue?
14Edwards J. ruled in Hamfler (paras. 14, 18) that:
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.
Reasonableness and fairness will dictate whether a disbursement…is assessable in whole or in part.
Edwards J. confirmed that an expert cannot simply charge a fee they consider appropriate and expect the court to rubber stamp it, deeming it acceptable (para. 25). Counsel must provide the court with sufficient information to assess the reasonableness of an expert’s fee. Such information includes the amount of time spent, the expert’s hourly rate, and either information from the expert’s governing body about appropriate hourly rates—if available—or comparable hourly rates of other experts in the same field—if the former is unavailable.
15In Pearson v. Inko Ltd., [2002] O.J. No. 3532 (Ont. S.C.) at para. 20, Nordheimer J. ruled that:
The approach to the recovery of fees paid to expert witnesses ought to be exactly the same as the approach to the fees to be recovered by counsel. The court should consider what is fair in terms of hours and rates as well as the overall amount and should then fix an amount which it is reasonable for the losing party to pay. In so doing, the court is not bound by what the client may have actually had to pay the expert.
Analysis
The Appropriate Scale of Costs
16On November 3, 2017, the Plaintiffs served a valid Rule 49 Offer to Settle the action for $1,950,000 for all claims and interest plus costs and disbursements (the “Offer”). The Defendant agrees that the Plaintiffs obtained a judgment more favourable than that Offer’s terms. The Defendant concedes, and I agree, that the Plaintiffs are entitled to partial indemnity costs until November 3, 2017, and substantial indemnity costs thereafter.
The Appropriate Hourly Rates for Plaintiffs’ Counsel
17In 2005, the Civil Rules Committee’s Costs Subcommittee prepared its report that led to changes in fixing costs, to be implemented on July 1, 2005. The 2005 Costs Grid has advisory status only, but parties and the courts still refer to it for guidance in determining appropriate hourly rates to be used for costs award determinations: Mayer v. 1474479 Ontario Inc., 2014 ONSC 2622, [2014] O.J. No. 1984 at para. 32.
18In First Capital (Canholdings) Corp. v. North American Property Group, 2012 ONSC 1359, the court suggested that the Costs Grid rates be adjusted for inflation.
19As noted, the Plaintiffs argued that the adjustment date should be 2002: the date the rates were first established. The Defendant argued that the Costs Grid should be adjusted from its implementation date. Neither counsel provided me with authority directly on point. In the absence of binding authority, I find that the inflation rate should be calculated using the 2005 implementation date as the starting point.
20As for their lawyers, from Oatley Vigmond LLP, the Plaintiffs in oral argument reduced Roger Oatley’s partial indemnity hourly rate to $470. The Defendant submitted that $450 was appropriate. Though $450 is above the Costs Grid’s value, adjusting for inflation, McCarthy J. accepted that rate in Rochon v. MacDonald, 2014 ONSC 591, 118 O.R. (3d) 491, and I accept it here, too.
21The Plaintiffs seek to set Ryan Murray’s partial indemnity hourly rate at $240, despite being below the adjusted Costs Grid value. I accept that this is reasonable. Using the adjusted Costs Grid for the Plaintiffs’ other lawyers and law clerks, I set Troy Lehman’s partial indemnity hourly rate at $367 and law clerk Karen Hopper’s at $98 (all rounded to the nearest dollar). I also accept the amounts for the other lawyers and law clerks listed on the Plaintiffs’ Bill of Costs.
22The total resultant partial indemnity award of fees is approximately $175,000, after the Costs Grid is adjusted for inflation from 2005 to 2017 when the trial was conducted. This is the amount that the Plaintiffs sought in oral submissions.
23In oral argument, the Plaintiffs accepted the use of the Costs Grid adjusted for inflation and multiplied by 1.5 to determine substantial indemnity rates. Adjusting the Costs Grid to account for inflation from 2005 to 2017 results in a substantial indemnity rate for Mr. Lehman of $550 and for Ms. Hopper of $147. The amounts for the Plaintiffs’ other lawyers and law clerks do not change. The resultant substantial indemnity award of fees is $332,460.
24I find that fees of $507,460 plus HST of $65,969.80, totalling $573,429.80 are fair, reasonable, and accord with what the unsuccessful party could reasonably have expected to pay.
Additional Considerations Regarding Fees
25The Defendant accepts that the hours claimed by the Plaintiffs’ counsel are reasonable and does not criticize the Plaintiffs’ decision to assign three lawyers for the trial. I find the time spent in this matter was proportionate to what was at stake and to the results achieved. The decision to assign three lawyers was proportionate to the amount of work that was anticipated for and occurred during the trial. The trial was very complex. Ms. Little suffered a traumatic brain injury. Expert testimony was required by a number of medical and rehabilitation specialists: a neuropsychiatrist, radiologist, paediatric neurologist, chartered accountant, life care planners, family physician, and case manager and vocational/educational consultant. Liability was contested throughout the proceeding. The trial was of utmost importance to Ms. Little, who is unemployable and requires constant supervisory care.
26No conduct by any party tended to shorten or to lengthen unnecessarily the duration of the proceeding. No step in the proceeding was improper, vexatious, or unnecessary. No party failed to admit anything that should have been admitted.
The Appropriate Disbursements
27The plaintiffs seek $213,296.28 inclusive of HST in disbursements.
28As noted above, Edwards J. emphasized in Hamfler the importance of reasonableness, fairness, and proportionality when assessing both costs and disbursements.
Experts’ Fees
29The Defendant takes issue with the amounts some of the expert witnesses charged for their reports and trial attendance.
30Hamfler was decided in 2011. By the time any of the experts in this case were retained, counsel was aware of the need to provide the court the information it needs to assess the reasonableness of an expert’s fee.
31The Defendant requested but received no details about some of the experts’ hourly rates or time spent. The Plaintiffs provided no information from a relevant governing body about appropriate hourly rates or comparable rates of other experts in the same field.
32I accept that the Plaintiffs’ counsel tried to obtain the necessary information. But I am left with less than satisfactory information on which to determine the appropriateness of the disbursements for some of the experts listed below. The explanation that these experts are “busy professionals” is unsatisfactory, and has been since Hamfler. Professionals retained by counsel for litigation should not be too busy to provide the information counsel needs to give the court.
33As a result of lacking the information described in each of the sub-paragraphs below, I must do what Edwards J. did in Hamfler: the best I can with the information available.
34Dr. Anthony Feinstein is a neuropsychiatrist. He charged $18,812.50 for three reports and a brief one-page follow-up report, and $4,550 for his court attendance. I accept that his opinion was central to the case. But I have no information concerning his hourly rate(s) or the time he spent. Of the total $23,362.50 claimed, I allow $20,000 as fair and reasonable.
35Dr. Daune MacGregor is a paediatric neurologist. I accept that her opinion was central to the case. But I have no information on her time spent or her hourly rate(s). Of the $28,764.50 claimed for Dr. MacGregor’s three written and one verbal report, I allow $20,000 as fair and reasonable.
36Dr. MacGregor charged $13,812 for preparation and attendance at trial, utilizing an hourly rate of $850. The Plaintiffs argue that, although Dr. MacGregor’s hourly rate “may be on the high end”, her expertise and evidence’s importance were such that the rate is not “out of line”. On the other hand, the Defendant argues that the allowable hourly rate should not exceed $500 because such a rate is comparable to that charged by other brain injury specialists.
37I have not been provided with the hourly rates of other paediatric neurologists. Without any, I am unsatisfied that Dr. MacGregor’s amount charged is reasonable. I allow $10,000 for preparation and trial attendance, equaling an hourly rate of just over $600.
38Dr. Graham Turrall charged $12,820 ($8,000 for a capacity assessment, $2,000 for a letter of opinion/power of attorney, $1,220 for travel to Barrie, and $1,600 for four hours of trial preparation). Dr. Turrall was not called to testify at trial, but his capacity assessment was filed on consent and was reasonably necessary for the proceeding. The Plaintiffs accordingly suggested a $5,000 reduction. I find that reasonable. I allow $7,820 for Dr. Turrall’s various charges.
39Neuropsychologist Dr. Robert Gates charged $10,330, at $300 hourly, for one report arising from a 2012 assessment and another after a 2015 assessment. I allow the $10,330 disbursement as fair and reasonable. Both reports were reasonably necessary for the proceeding. Dr. Gates did not testify at trial; I was told that he could not be located. His findings, however, were relied on by other experts and his reports were referred to numerous times.
40Mary Anderson, Ms. Little’s case manager and vocational/educational consultant, charged $7,936 for 58.25 hours to complete a 17-page medical/legal report. I find this excessive in hours and quantum for a report that length. I allow $5,000 for her report. The Plaintiffs acknowledge that Ms. Anderson’s fees for court preparation, accommodation, travel expense and trial attendance (36 hours, or $7,343) can be reduced by $2,000; I agree that $5,343 is fair and reasonable.
41Carol Bierbrier is an occupational therapist and life care planner. She charged $15,867.86 for two future care costs reports and a rebuttal report. The first report cost $7,224.43, was not filed, and the author was not called at trial. Ms. Bierbrier self-authored the second. The Defendant argues that it should not have to pay for the first report and that there would be duplication between it and the second. The first report was completed in 2014 at $150 hourly; Ms. Bierbrier completed the second in 2017, shortly before trial, at $180 hourly. This is in line with the Defendant’s future care costs expert who testified that she charges $250 hourly. I am satisfied that both reports were reasonably necessary expenses for the proceeding and the amounts charged are reasonable.
42This results in a deduction of $25,875 inclusive of HST to the fees charged by experts.
Other Disbursements
43The Defendant contests the following disbursements’ appropriateness. Unlike the expert disbursements detailed above, all of the amounts below exclude HST unless otherwise indicated.
44The total disbursements claim was $244,039.18, of which the SABS insurer paid $30,020.90.
45The Defendant made repeated requests for particulars of the credit paid by the SABS insurer. The Plaintiffs argue that all money paid for the SABS disbursements is reflected in the assessable disbursements list, with the credit applied globally to the disbursements due to the accident benefits settlement. The Plaintiffs argue that the Defendant was likely given a larger credit than warranted. The Plaintiffs, however, acknowledged that some of the disbursements claimed, such as photocopying and facsimile charges, might partially relate to the SABS claim and accept that this could result in a modest reduction of the $17,012.16 claimed for those expenses.
46I am satisfied that a $1,000 reduction is appropriate to account for photocopying and facsimile charges incurred for the SABS claim.
47The Defendant argues it should not have to pay for costs for subpoenas to various experts retained by the Plaintiffs to give evidence in this matter. I agree with Edwards J. in Hamfler that it does not seem reasonable for the Defendant to pay for summonsing experts retained and paid by the Plaintiffs to provide their evidence at trial. The Plaintiffs have not demonstrated a basis for the summons in this case. Conduct fees in the amount of $50 each are not allowed in relation to Elizabeth Yeaman, Skill Builders, NRIO, Mary Anderson, Wright Rehab, Dr. Shourideh-Ziabara, Beth McCague, Dr. Berge or Dr. Polonenko. The total reduction is $450.
48The video interviews, at a cost of $658.20, were not utilized at pre-trials and no mediation was held in this case. This is not a proper disbursement. The Defendant should not be expected to fund the cost of focus groups, resulting in a deduction of $866.58. There is no explanation for the charge for mileage/parking in the amount of $1,022.46. I am unsatisfied that the charges for copying to a CD or scanning fees—together totaling $4,849.80—are anything beyond standard office overhead; these charges are not allowed.
49The $1,006 cost for transporting Ms. Little to assessments by the Plaintiffs’ experts is not a disbursement the Defendant should have to pay. The Plaintiffs’ $4,546.80 claim for an investigation report relating to the cost of locating liability witnesses that was not provided to the Defendant is not a proper disbursement, considering the information before me.
50The Plaintiffs no longer seek $1,711 in costs from ADS Forensic, nor the $932.04 cost of meals during the trial (the latter inclusive of HST).
51I allow the $2,296.04 expense for research, $878.66 in facsimile charges, $13,313.50 in photocopy charges, $2,163 in courier charges, and $1,221.90 for court filing of documents, subject to the deduction set out at para. 46. I find these amounts were reasonably necessary for the proceeding, the amounts charged are reasonable, and the disbursements do not fall within standard office overhead: see Moon.
52That brings me to the claimed disbursement for adverse costs insurance. There are conflicting rulings as to the appropriateness of this disbursement. In Markovic v. Richards, 2015 ONSC 6983, 261 A.C.W.S. (3d) 42, Milanetti J. disallowed the expense of costs insurance as a compensable disbursement. She described it as an entirely discretionary expense that does nothing to advance the litigation and may even “act as a disincentive to thoughtful, well-reasoned resolution of claims”. In Armstrong v. Lakeridge Resort Ltd., 2017 ONSC 6565, Salmers J. considered Markovic but determined that the expense involved in advancing the claims was extremely large and, without costs insurance, “the fear of a very large adverse costs award would cause many plaintiffs of modest means to be afraid to pursue meritorious claims”. Salmers J. allowed the disbursement.
53In my view, costs insurance might comfort plaintiffs or their counsel. But I agree with Milanetti J.: costs insurance does nothing to advance litigation per se. Accordingly, I do not allow the $1,566 claim for costs insurance.
54This results in a deduction to other disbursements of $19,776.86, inclusive of HST.
55The total disbursements which the Plaintiffs claimed but I have not allowed are rounded to $45,650, inclusive of HST.
Conclusion
56Accordingly, the plaintiffs are entitled to a counsel fee of $507,460 plus HST of $65,969.80, and $167,836.28 inclusive of HST for disbursements, for total costs of $741,266.08.
QUINLAN J.
Released: May 23, 2018