Montebello Post-Mortem

Montebello.jpg     Another successful Civil Litigation Update concluded at Chateau Montebello yesterday. The conference, now in its 26th year, was acclaimed by numerous visiting Superior Court and Court of Appeal judges as Ontario’s premiere continuing legal education program. We are proud that Heather Williams is a co-chair of the conference.

One of the most popular parts of the program each year involves a panel of Superior Court judges giving their assessments of damages in hypothetical fact situations. Some interesting issues were addressed by this year’s panel, made up of the following Justices: Giovanna Toscano Roccamo, Randall Echlin, Charles Hackland, Denis Power and Daniel Ferguson. They were joined by Justice Lynne Leitch, Regional Senior Justice for the Southwest Region. Bill Simpson, Q.C., LSM,  acted as moderator.

(In conversation with Justice Leitch, Her Honour mentioned that it seemed to her that there were quite a few decisions from the East Region on our blawg. This might be true, but it is not intentional. Our objective is to comment on cases from anywhere in the province that we think might be of interest to our readers. Perhaps we give slightly more prominence to important decisions rendered by our local judges, but we’re only human!)

Justice Leitch also mentioned that the bench and bar in the southwest region have begun holding their own version of the CCLA’s Civil Litigation Update. Our best wishes to them.

Costs

One issue that the Montebello panel discussed at some length was the proper approach to fixing costs. Justice Denis Power (who another panel member said is acknowledged by other Superior Court judges to be an “expert” on costs) described the procedure that he follows. (Normally, we do not attribute comments made at the conference to particular judges. However, we felt that Justice Power’s remarks on costs were noteworthy, in part because of his acknowledged expertise in this area.)

His Honour said that he begins by looking at the actual hourly rate charged by counsel for the party in whose favour costs are being fixed. (Counsel’s actual rate is, of course, one of the enumerated factors in subrule 57.01(1) that the court “may consider” in fixing costs.) He will determine whether that actual rate is reasonable, having regard to the particular case before him. In the problem that he was dealing with, the actual rate was given as $600 and he felt that a reasonable rate would have been $300.

Next, he derives a partial indemnity rate by taking 60% of the “adjusted” actual rate. In this case, 60% of $300 is $180, so that would have been the partial indemnity rate that he would have allowed.

By virtue of subrule 1.03 of the Rules of Civil Procedure, “’substantial indemnity costs’ mean costs awarded in an amount that is 1.5 times what would otherwise be awarded in accordance with Part I of Tariff A”. In this example therefore, the substantial indemnity rate would be $270. (Because Justice Power derives a “partial indemnity” rate by taking 60% of the “adjusted” (“reasonable”) actual rate, the substantial indemnity rate, using his methodology, will always be 90% of the adjusted actual rate.)

Another member of the panel had a different approach. She begins by determining what she thinks is a reasonable partial indemnity rate, having regard to the maximums that appear in the table that accompanies Rule 57. The substantial indemnity rate would automatically be 1.5 times the partial indemnity rate, because of subrule 1.03. Of course, the substantial indemnity rate could not exceed the actual rate charged to the client. (This approach is similar to that used by Justice Joan Lax in Manning v. Epp: see below.)

Yet another panelist pointed out that Mantella v. Mantella (our commentary on that case can be viewed here) indicates that if counsel is working at a discounted rate, the actual rate charged to the client might be a reasonable partial indemnity rate. Justice David Corbett said, in that case:

[I]n fixing partial indemnity costs, the court does not look at the actual fee arrangement between solicitor and client and discount that arrangement to ensure that recovery is “partial”. Rather, the court considers the pertinent factors laid down in the rules in fixing the amount of recovery appropriate on a partial indemnity basis. So long as the amount is equal to or less than the actual fees and disbursements charged, then the amount arrived at by reference to the factors listed in the rules will be the amount of the award – whether that represents 50% of actual fees, 75% of actual fees, or even 100% of actual fees. If counsel is prepared to work at rates approximating partial recovery costs, that is counsel’s choice. There is no reason why the client’s fee recovery ought to be reduced because she has negotiated a favourable rate with counsel, so long as the total of the indemnity does not exceed the fees actually charged.

(None of the Montebello judges discussed whether they have a particular approach to evaluating the number of hours spent by a law firm. They confined their comments to hourly rates.)

Justice Power also expressed the view that the Rules now contemplate three rates: partial indemnity, substantial indemnity and full indemnity. He analogized these to the former scales of “party and party”, “solicitor and client” and “solicitor and his or her own client” costs. Readers will recall that Justice Joan Lax recently expressed a different opinion in Manning v. Epp (read our commentary here). She held that there are only two scales of costs: partial indemnity and substantial indemnity.

Two of the judges on the panel advised us that they will shortly be releasing costs decisions that include discussion of appropriate methodology. We will comment on these rulings when they are released.

Insurance Act Threshold & Deductible

One of the fact situations provided to the panelists required them to consider whether they would be influenced by the Bill 198 deductible ($30,000 if the gross assessment of general non-pecuniary damages is $100,000 or less) in assessing damages. All but one of the judges said that they would not. One said that he did not even know, or care, what the amounts of the deductibles are. One judge did confess that he would find it difficult to ignore the effect of the $100,000 cut-off for the applicability of the deductible.

There was a discussion among the panelists of the recent decisions in Bisier v. Thorimbert (read our commentary here) and Dennie v. Hamilton (commentary here). In those cases, two Superior Court justices concluded that, in making a threshold ruling, they ought to take into account the jury’s assessment of damages. One of the Montebello justices agreed that the findings of the jury, as trier of fact, could not be disregarded. A couple of others (one in particular) thought that the wording of s. 267.5(15) of the Insurance Act is conclusive and that the trial judge must decide the threshold issue himself or herself, unaided by the jury’s findings.

Other Highlights 

In addition to the judges’ panel, this year’s conference featured an eight-part series of talks on “the anatomy of failure”. Inspired by the “Losing Tips” of Court of Appeal Justice Marvin Catzman, written for The Advocates’ Society Journal, Master Robert Beaudoin, Brian Parnega, Janice Payne, Justice Helen MacLeod, Justice Colin Campbell, Bryan Carroll, Justice Stephen Goudge and Supreme Court of Canada Justice Marshall Rothstein all gave their perspectives on what not to do at various stages of a lawsuit. The results were instructive and often hilarious.

All in all, a very enjoyable and educational conference.

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