Mr. Justice John H. Brockenshire, who was the judge at first instance in Walker v. Ritchie, has released another decision dealing with costs premiums.
The Walker case went to the Supreme Court of Canada (sub nom. Ritchie v. Walker). That Court ruled in October, that costs premiums were not recoverable from opposing parties under the version of the Rules of Civil Procedure that then existed. However, the Court left open the possibility that subsequent amendments to the Rules might lead to a different result.
In Authorson Estate v. The Attorney-General of Canada, Justice Brockenshire had awarded a substantial costs premium (as he had originally done in the Walker case). The premium in Authorson was $1 million. After the Supreme Court released its ruling, Brockenshire J. revisited his decision and concluded that it was no longer open to him, in the wake of the Supreme Court’s decision, to award a premium payable to a plaintiff by a defendant. So, he revised his decision and deleted the $1 million costs premium.
Justice Brockenshire rejected the argument, that amendments to Rule 57 which have taken effect since the original decision in Walker v. Ritchie, make the Supreme Court’s ruling distinguishable:
Rothstein J. finished off his decision with the caveat that amendments to the Ontario costs scheme since the cost award in Walker may have changed the applicability of the reasoning in his judgment. I fail to see how the abandonment of the cost grid, or the specific importation in to Rule 57 of the principle of indemnity or the requirement that the reasonable expectations of the unsuccessful party be taken into account, both long established in case law, would have any effect on the principles of which he spoke in his decision. The specific proviso that full indemnity costs could be awarded, as has been done in this case, simply provides a further possible reason for not also having a risk premium awarded.
Justice Brockenshire concluded:
In my view, the decision of Rothstein J. quite simply removed the basis in the case law upon which I had founded my decision to award a risk premium payable to class counsel by the Crown. I take the decision of Rothstein J. as enunciating that on broad policy grounds, successful plaintiff’s counsel should be able to seek compensation for undertaking the financing of litigation, and the acceptance of the risks involved in the litigation, but that such compensation is to come from their own clients, rather than the losing parties, even though such compensation (unless coming from some special assistance fund) may well be funded from the damage award to the plaintiffs.