Power J. Analyzes Right of Self-represented Solicitor to Be Paid Costs

Mr. Justice Denis Power released an interesting and rather novel costs ruling yesterday in the ongoing Riddell v. The Conservative Party of Canada litiigation.

Ottawa lawyer Alan Riddell, once the Conservative Party of Canada’s candidate in the federal riding of Ottawa South, is embroiled in a lawsuit with the party over the circumstances of his withdrawal from the 2005 election campaign. In yesterday’s ruling, Justice Power was fixing costs of an application brought by Mr. Riddell, who had been the successful party.

Counsel for Mr. Riddell sought costs on a full indemnity or, in the alternative, a partial indemnity basis. He argued that the Conservative Party had “attempted to smear Riddell’s reputation as a lawyer and lifetime Party activist in the hope that he could be pressured into abandoning his application without a hearing” and that the Party had filed an affidavit containing false allegations that impugned Mr. Riddell’s mental stability and professional integrity.

Mr. Riddell also submitted that the result achieved on the application was more favourable than two offers to settle that he had made.

What is particularly noteworthy about this decision is that part of Mr. Riddell’s claim for costs was for time spent by him personally and by others at his law firm, even though he also had counsel from McCarthy Tetrault representing him. As Justice Power noted, “in theory at least, had it not been for Mr. Riddell’s efforts, the McCarthy Tetrault fees would have been considerably higher than the claim now being made on account of the McCarthy Tetrault fees.”

Justice Power awarded costs on a partial indemnity basis. He said that the Conservative Party had “played hardball” but had not engaged in conduct warranting costs on a full or substantial indemnity basis. He reviewed the authorities and the provisions of s. 131 of the Courts of Justice Act to conclude that Mr. Riddell and his firm were entitled to recover, as costs, a portion of the value of the time that they had expended on this case. He noted that s. 131 confers on the court a discretion with respect to “the costs of and incidental to a proceeding”. His Honour felt that the phrase, “incidental to” must mean something more than just “costs of a proceeding”.

Satisfied that he had a discretion to order that Mr. Riddell and his firm be paid costs for their own time, Power J. noted that there was little in the way of guidance from the authorities, as to how that discretion should be exercised. He also remarked that he had not been provided with evidence of the profit-sharing arrangement in place between Mr. Riddell and his law firm. However, Justice Power considered that he was able to draw some inferences. He estimated that Mr. Riddell would have received in payment from his firm a net return of about 40% for his own time and that of his employees.

So, having determined that a partial indemnity award of costs was appropriate, Justice Power awarded to Mr. Riddell 60% of that 40%, applied to the value of the time for which a claim for costs had been made; in other words, the fees were allowed at a rate of twenty-four percent of the actual time. (This was on the basis that a partial indemnity costs award would normally be about 60% of the actual rate charged to the client.)

Justice Power also analyzed, in the usual way, the time spent by McCarthy Tetrault and made an award of partial indemnity costs relative to those fees.

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