Edited by Amanda Kostek
Last week’s Court Rulings from the Alberta Court of King’s Bench, Court of Appeal and SCC.
Camacho v Lacroix, 2024 ABKB 179
Trial Costs in Personal Injury Matter
The Plaintiff was awarded $471,298 in damages following a successful personal injury Trial. At issue was costs and prejudgment interest. Although the Plaintiff was successful at Trial, she recovered less than 25% of the over $2 Million sought. The Plaintiff sought costs of $233.300 and disbursements of $160,533, but did not provide a formal bill of costs. This included cost of second counsel and doubling of costs as a result of beating a formal offer. The Plaintiff further sought an inflation adjustment resulting in the proposed total of $233,300 on the basis of schedule “C” being out of date. The Plaintiff relied on Hearn v Kirk Montoue Dawson LLP, 2023 ABKB 449 and Grimes v Governors of the University of Lethbridge, 2023 ABKB 432, cases in which the Court applied multipliers to bring the awards in light with legal reality and the 40-50% indemnity suggested by the Court of Appeal in McAllister v Calgary (City), 2021 ABCA 25.
Items that stood out in the disbursements sought included just under $60,000 for Cara Brown’s economic reports and attendances at Trial, and witness expenses of $4600 for the Plaintiff’s brother and husband, neither of whom testified at Trial. The Defendants argued that unnesseary witnesses should not be reimbursed and Cara Brown’s fees were excessive in light of the limited weight given by the Court to this expert.
The Court concluded that the Plaintiff’s failure to provide an actual account of her legal costs precluded her from seeking reimbursement based on the indemnity approach highlighted in McAllister:
[9] The Defendant points out that the Plaintiff’s choice not to reveal her actual fees and costs preclude reliance on the McAlister ‘principle’:[1] see Ho v Lau, 2023 ABKB 15 at paras 42-51. While Ho addressed a different scenario, I agree with the Defendant’s submission insofar as the failure to provide an actual account of Ms. Camacho’s legal costs precludes her from making arguments premised on the percentage indemnity approach described in McAllister: see also Barkwell v McDonald, 2023 ABCA 87 at paras 54-55 and 58. Furthermore, the Defendant relies on the delay of this litigation, which falls at the feet of the Plaintiff, as a basis to deny inflationary adjustments in the period of unreasonable delay: Jones v Gerosa, 2016 ABQB 614 at para 50.
Delay was also an issue in the litigation. The collision in question occurred 14 years before Trial.
The court made two specific directions on costs hearings generally:
- Contested disbursements should be supported by affidavit evidence. Reliance on bare listings of expenses will generally be insufficient.
- Where the parties limit their submissions and materials based on prior out-of-court resolution of certain expenses (something that is laudable and should be encouraged), they must communicate this facet of the evidentiary scene to the Court.
Ultimately the Court concluded that the costs proposed by the Plaintiff were excessive and the proposed doubling of already doubled numbers would result in over indemnification. The appropriate based costs were assessed at $85,800, which was increased to $111,800 to account for second counsel. No further multiplier was warranted.
In terms of disbursements, the initial retention of the economist was reasonable, but there was no basis for including a 3.75% credit card surcharge. However, the need for a second report from Cara Brown was necessitated by the delay in bringing the matter to Trial. The Court substantially reduced the cost of her second report to $7000. (Her second report cost $14,579 and third report cost $6,133.) Further, the Court found Cara Brown’s trial rate of $695 as opposed to her ordinary hourly rate of $495 was unreasonable as was her 4% arbitrary surcharge. The Court allowed for 6 hours of her testimony, and 2 days of preparation. It found her 60 hours of preparation unreasonable, especially since she had just done an updated report a couple weeks prior. The Court noted that it may have been appropriate for the expert to spend more time on preparation given the age of the file, but that delay was caused by the Plaintiff, and the “defendant should not be on the hook for incidental costs of it.”
In terms of the witnesses that did not testify, it was reasonable to have them at Trial, but the amounts claimed were substantially reduced.
Finally, the Court reduced interest by 2 years to take into account the Plaintiff’s delay in prosecuting the claim:
[46] Applying all the relevant considerations in this case, I am persuaded that a reduction of prejudgement interest of two years is appropriate. As Cote JA held in Rayani:
[i]n the first place, the policy of s.2(3) is obviously to encourage promptness, and (if need be) to penalize delay by denying interest. In the second place, the plaintiff has no right to treat the defendant as its compulsory banker. A torts claim should not be treated like a savings account, idly drawing interest as long as the holder of it wishes.
[47] Like Meehan v Holt, 2011 ABQB 110, this case took far too long to reach trial. It was not diligently prosecuted at all stages. This was perhaps understandable given Ms. Camacho’s life circumstances, but constituted a litigation choice. The matter took 15 years to reach trial. Even in light of Covid court closures, this is almost incomprehensible. At one point in early 2019, dismissal for long delay came into view. The Defendant also did not hurry the matter along, likely because it believed its exposure to be minimal. However, on the full historical record, I find it would be unjust to award interest for the full prejudgment period.