Tag: District Registrar Nielsen

Adverse Costs Insurance "Is Not a Proper or Necessary Disbursement "

Reasons for judgement were released last week by the BC Supreme Court, New Westminster Registry, finding that the cost of an insurance policy protecting a plaintiff from adverse costs/disbursements consequences should the prosecution of an injury claim not proceed favorably is not a recoverable disbursement.
In the recent case (Wynia v. Soviskov) the Plaintiff hoped to recover the costs of the insurance policy from the Defendant in the underlying tort action. In finding the expense was not a recoverable disbursement District Registrar Nielsen provided the following reasons:

[4]             The plaintiff has raised the novel issue of whether the cost of an insurance policy obtained by the plaintiff to insure against own disbursements, and opponents’ costs and disbursements, in a lost or abandoned court case, is a recoverable disbursement pursuant to SCCR 14-1 (5). 

[5]             The defendants object to this particular disbursement and rely upon an Ontario case, Markovic v. Richards et al, 2015 ONSC 6983, in support of their position. In Markovic v. Richards, supra, the issue was stated succinctly as “Is the plaintiff’s premium for after-the-event insurance, a compensable disbursement”. The court concluded at paragraph 7 that it was not, stating:

While it is clearly the plaintiff’s prerogative to obtain ATE insurance [which is after-the-event insurance], I do not accept that such premium should be reimbursed by the defendants as a compensable disbursement. Such disbursements have not, as far as I am aware, ever been entertained in Canada and have certainly not been the subject of legislative reform as was the case in the UK. I can think of no policy reason that such should be compensated as a taxable disbursement. Existence of the policy may well provide comfort to the plaintiff, it is however an expense that is entirely discretionary, does nothing to advance the litigation, and may in fact even act as a disincentive to thoughtful, well-reasoned resolution of claims.   

[6]             In British Columbia, to be recoverable as a disbursement SCCR 14-1(5) provides that the disbursement must have been necessarily or properly incurred in the conduct of the proceeding.  The phrase “necessarily or properly incurred in the conduct of the proceeding” was recently addressed by the Court of Appeal in MacKenzie v. Rogalasky, 2014 BCCA 446. The Court of Appeal  states at paragraphs 78 through 80:

[78]      In my opinion, the various iterations of the rule set out above permitting recovery of expenses focuses most naturally on the exigencies inherent in the particular litigation rather than capturing expenses arising from the financial circumstances or other choices of a party. Embedded in the rule is the requirement for a causal connection between the issues in the case and the expense incurred to prove or disprove them.

[79]      The rule, in its current form, permits the recovery of “disbursements … incurred in the conduct of the proceeding”. In my view, quite apart from the language “incurred in the conduct of the proceeding” the term “disbursement”, when used in the context of a costs rule that relates to the taxation of costs in particular litigation, does contain limits that narrow its potential broad applicability. It appears to me that the purpose of permitting the recovery of disbursements in the context of a costs regime is to permit the recovery of those expenses that arise inherently and directly from the issues in the case which relate, as the appellants suggest, to the direction, management, or control of litigation and which pay for materials and services used to prove a claim or defence. These expenses arise directly from the nature and conduct of the allegations in a proceeding. By contrast, interest expenses do not arise from the nature of the allegations or the conduct of proceedings, they arise from unrelated causes including the financial circumstances of a party. In my view, as such, they do not fall within the meaning of the word “disbursements” in the context of a costs rule.

[80]      It will be apparent that the conclusion I have reached does not depend on limiting the applicability of the word “disbursements” by reference to the phrase “incurred in the conduct of the proceeding”. I consider that the meaning of the words “disbursement” or “expense” has always excluded out-of-pocket interest expenses. The addition of the phrase “incurred in the conduct of the proceeding” in the rule in 1990 did not narrow or change the meaning of the word “disbursement” or otherwise limit its application. Rather, the phrase reinforces and confirms what has always been the case. To be recoverable a disbursement must arise directly from the exigencies of the proceeding and relate directly to the management and proof of allegations, facts and issues in litigation, not from other sources. In my view, that is what is captured by the phrase “the conduct of the proceeding”.

[7]             In my view, applying the reasons of the BCCA in MacKenzie v. Rogalasky, supra, the cost of insurance coverage is not a proper or necessary disbursement incurred in the conduct of the proceeding. No doubt it provides a measure of financial comfort to the plaintiff, however, it does not arise from the exigencies of the proceeding and relate directly to the direction, management, or control of the litigation used to prove a claim against the defendants. Accordingly, the cost of the insurance coverage is disallowed.

Reasonable Disbursements – What's Good for the Goose is Good for the Gander

Reasons for judgement were released recently by the BC Supreme Court, Vancouver Registry, ordering a Defendant to disclose the cost of their medico-legal reports where they were contesting the reasonableness of the Plaintiff’s disbursements.
In the recent case (Sturdy v. Dhadda) the Plaintiff was injured in a collision and sued for damages.  The claim was eventually settled for $300,000 plus costs and disbursements.  The Defendant disputed the reasonableness of the costs of some the plaintiff’s expert reports.  The Plaintiff applied for and was granted an order for the Defendant to disclose the cost of their expert reports.  In finding this was fair District Registrar Nielsen provided the following reasons:
[18]         What these cases demonstrate is that a comparison of the same or like expert within the same litigation is relevant. By allowing the party who challenges the reasonableness of the assessments charged by the assessing party’s experts to cherry pick what accounts they will or will not disclose leads to selective and inconsistent disclosure. If disclosure suggests the other party’s accounts are too high, they are readily disclosed for that purpose. On the other hand, if they do not, those records, for strategic reasons, are simply not produced. In my view, this leads to an imbalance which requires the levelling of the playing field…

[29]         The onus of proving the reasonableness of the plaintiff’s expert’s charges clearly rests upon the shoulders of the plaintiff who is the assessing party. The accounts of the plaintiff’s experts have been disclosed and scrutinized by the defendants, following which the defendants have alleged those charges are unreasonable within the context of Supreme Court Civil Rule 14-1(5).

[30]         In these circumstances, where the defendants have served their expert reports upon the plaintiff, the amounts paid by the defendants to their experts in the same specialities, involving the same patient, with the same clinical history, will be relevant. While a comparison of fees and charges would not be determinative and is only a single factor in the analysis, it is a matter properly considered in the context of this case, where the defendants are directly challenging the reasonableness of the plaintiff’s experts’ accounts.

[31]         The plaintiff’s application is allowed with respect to Dr. Pullmer and Dr. Dost. The plaintiff’s application with respect to Dr. Grypma is dismissed. I am not satisfied that the evidence before me provides a sufficient basis to establish the relevance of the invoices of Dr. Grypma, orthopedic surgeon, to those of Dr. Adrian, physiatrist.

[32]         Since the plaintiff has been substantially successful, they are entitled to the costs of their application.

Two Sets of Costs Approrpriate When Two Actions Are Combined for Trial

Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, addressing what costs are payable when two actions, set for trial at the same time, settle prior to trial.
In today’s case (Wang v. Dhaliwal) the Plaintiff was involved in two collisions and filed separate lawsuits both of which were set to be heard at the same time.  The cases settled for trial for an agreed sum plus costs.  The Plaintiff argued that two sets of costs were warranted while the Defendant suggested a single set of costs was appropriate given ‘the efficiencies achieved by having the cases joined“.  In agreeing that two sets of costs were appropriate District Registrar Nielsen provided the following reasons:
21]         Although the two actions were ordered to be tried together, by consent, they involved different defendants and the issues were not identical: liability had been denied in the December 15, 2010 action and an allegation of contributory negligence had been raised by the defendant in the June 14, 2011 action. Further, the defendants required two examinations for discovery of the plaintiff in the two separate actions and the plaintiff had to conduct an examination for discovery of each defendant in the two actions.
[22]         The only commonality in the two actions was the fact that they involved injuries to the same plaintiff. In the circumstances, it was appropriate to bring two separate legal actions involving the different defendants and circumstances. It was equally appropriate to eventually join the cases for the purposes of trial once it became apparent this approach was workable and efficiencies would be achieved…
[27]         There will be circumstances where two sets of Civil Rule 15-1 costs will not be appropriate. In the presence case, the defendants have had the benefit of the streamlined process of Civil Rule 15-1 and the benefit of the two actions having been combined for the purpose of being heard together. The defendants have also had the further benefit of two separate legal actions having been commenced, which allowed the plaintiff to be examined for discovery twice, once in each action. In both actions, trial preparation was substantially completed.
[28]         In the circumstances, the sum of $6,500 in fees is awarded for each action, with applicable taxes.
 

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ERIK
MAGRAKEN

Personal Injury Lawyer

When not writing the BC Injury Law Blog, Erik is the managing partner at MacIsaac & Company, based in Victoria, B.C. He is also involved with combative sports regulatory issues and authors the Combat Sports Law Blog.

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