Tag: reasonable disbursements

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.

Privileged Report Detrimental To Plaintiff's Claim Declared Reasonable Disbursement

Just because a medico-legal report proves harmful to a Plaintiff’s claim does not make the costs of obtaining the report, in and of itself, an unreasonable disbursement.  Reasons for judgment were released last week by the BC Supreme Court, Prince George Registry, demonstrating this.
In last week’s case (White v. Reich) the Plaintiff was injured in a 2008 collision.  He sustained a chronic knee injury which impacted his ability to work.  The Plaintiff had a history series of heart problems which also impacted his choice of working in remote locations.   His treating cardiologist did not wish to be involved in litigation and the Plaintiff retained an independent physician to address this issue.  Ultimately the independent physician provided an opinion which was detrimental to the Plaintiff’s litigation interests indicating “that the heart condition was in no way related to the motor vehicle accident and that in any event, if the plaintiff were to follow a regime of rehabilitation and medication he could seriously reduce the risk of further heart problems.  In short, the evidence established that with proper actions, there was no physical reason for the plaintiff not to return to his Northern Alberta position.”
The Plaintiff claimed privilege over this report and it was not exchanged with defence counsel.  The matter settled prior to trial.   The Defendant argued the disbursement associated with this report was unreasonable.  Master Caldwell disagreed finding simply because the report was ultimately unhelpful to the Plaintiff’s claim the decision to explore the issue was reasonable.  In allowing the disbursement the Court provided the following reasons:
[19]         The applicable legal principles were canvassed and summarized recently by Master MacNaughton in Turner v. Whittaker, 2013 BCSC 712 at para. 5.  In particular it is noted that the test is not one of hindsight and that a proper disbursement may be one which is ultimately not necessary but which was reasonably incurred for the purposes of the proceeding.
[20]         In this regard, counsel for the defendant acknowledged that if the report had determined that the most recent heart problems had been caused by or contributed to by the accident and that that was the cause of the plaintiff’s being unable to return to work, there would be no question that the report was not only reasonable and proper but in fact necessary to the proper conduct of the litigation.
[21]         In all of the circumstances, I am of the view that the course of investigation with Dr. Isserow, which culminated in and included his report, was reasonable and proper at the time that it was undertaken and accordingly the disbursements which relate to Dr. Isserow are allowed as presented.

More Than Lawyer's Say Needed For MRI's to be Recoverable Disbursements


Further to my previous post on this topic, reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, discussing when an MRI is a reasonable disbursement in a personal injury lawsuit.
In today’s case (Farrokhmanesh v. Sahib) the Plaintiff was injured in two BC collisions.  He sued for damages and settled his claims prior to trial.  However, the parties could not agree on whether some of the Plaintiff’s disbursements were reasonable.  The parties applied to the Court to resolve the issue and Registrar Sainty held that the Plaintiff’s privately retained MRI was not a recoverable disbursement.  The Plaintiff appealed this ruling.  Mr. Justice Ehrcke dismissed the appeal and in doing so made the following comments about MRI’s in personal injury lawsuits:

[33]         The applicant submits that the Registrar erred in principle by saying that there must be a medical reason for ordering the MRI. In my view, the applicant’s submission seeks to parse the Registrar’s decision too finely. In reviewing the Decision of the Registrar with the appropriate level of deference, it would be wrong to focus on a single word or a phrase taken out of the context in which it occurs.

[34]         When read in context, the Registrar’s reason for disallowing the cost of the MRI is that she found it was not necessarily or properly incurred. In coming to that conclusion, she took into account that no medical professional had advised counsel of the probable utility of an MRI in the particular circumstances of this case. Mr. Fahey had deposed in para. 11 of his affidavit that he was unaware of the plaintiff exhibiting any objective signs of injury when he ordered the MRI scans.

[35]         I am unable to find that the Registrar acted on a wrong principle in disallowing the cost of the MRIs in this case, and I would not interfere with her Decision.

To be on the safe side it is a good idea to have a treating medical practitioner requesting an MRI or other diagnostic test to maximize the chance that these expenses will be recoverable disbursements.

Cost of MRI and Medical Report Ordered By Lawyer Disallowed


The winning side to a lawsuit in the BC Supreme Court is allowed to recover reasonable disbursements.  Some of the greatest costs of advancing injury lawsuits are those associated with expert medical evidence.  Today, reasons for judgement were released by the BC Supreme Court, Vancouver Registry, considering two common disbursements of Plaintiff lawyers in ICBC injury lawsuits; Private MRI’s, and medico-legal reports.
In today’s case (Farrokhmanesh v. Sahib) the Plaintiff was injured in two BC car crashes.  He settled his claims for $42,000 plus costs and disbursements.  The parties could not agree on some of the disbursements and the BC Supreme Court was asked to resolve the dispute.  The two biggest items in dispute were private MRI’s ordered by the Plaintiff’s lawyer and a medico-legal report from a psychologist.  Both of these items were disallowed as unreasonable expenses.

  • MRI

The Plaintiff’s lawyer sent his client for a private MRI to better investigate a shoulder injury.   The two scans cost just over $2,000.  The Plaintiff’s lawyer gave the following explanation for incurring this expense in the prosecution of the claim:

The plaintiff claimed damages herein as a result of injuries she sustained to both her neck and trapezius (shoulder area). Her symptoms persisted for years after the accident and were continuing when I made arrangements to have the plaintiff undergo magnetic imaging. I wanted to obtain the best possible imaging in order to ascertain the nature and extent of the plaintiff’s injuries and to uncover objective evidence of injury…

I ordered the scans because in my view presentation of my client’s claim required it. The plaintiff had been off work for a long time and had continuing complaints. These pain symptoms were also causing significant depression. I knew the fact of whether or not there were objective signs of injury as opposed to only subjective complaints was going to be an important issue at trial and thus I ordered the scans to obtain evidence going to this issue.

I knew when I ordered the scans that upon resolution of the subject claims the client would likely be required to sign a release thereby ending her ability to make any further claim for damage, on a permanent basis, to her neck and shoulder. Knowing this and the fact I was responsible for giving advice to the plaintiff regarding her injury and damages and the release, I ordered the scans to ensure there was no latent injury not previously uncovered. This was one of the reasons I ordered the scans. The plaintiff herein was going to forever give up her right to sue in connection with these injuries and thus it was my view that it was important to have the scans undertaken. In fact it was a term of the settlement herein that the plaintiff sign an ICBC form of release.

Registrar Sainty disallowed these disbursements providing the following reasons:

[38] The test for determining whether a disbursement ought to be allowed is:

…whether at the time the disbursement or expense was incurred it was a proper disbursement in the sense of not being extravagant, negligent, mistaken or a result of excessive caution or excessive zeal, judged by the situation at the time when the disbursement or expense was incurred”. (Van Daele v. Van Daele, [1983] B.C.J. No. 1482; 56 B.C.L.R. 178 (C.A.) (at para. 109))

[39] The provisions of Rule 57(4) of the Rules of Court relating to the Registrar’s discretion to award disbursements are broad. In general:

The registrar must consider all of the circumstances of each case and determine whether the disbursements were reasonably incurred and justified. He must be careful to balance his duty to disallow expenses incurred due to negligence or mistake, or which are extravagant, with his duty to recognize that a carefully prepared case requires that counsel use care in the choice of expert witnesses and examine all sources of information and possible evidence which may be of advantage to his client. (see Bell v. Fantini(1981), 32 B.C.L.R. 322 (S.C.)) at para. 23.))..

[44] I am going to disallow the claim for reimbursement for the two MRI scans. I cannot accede to Mr. Fahey’s argument that simply because he, as counsel, thought it was necessary to obtain MRI scans I ought not to question that decision unless I find it to be extravagant or overly zealous. In my view, and I am going to expand on what Registrar Blok held in Ward v. W.S. Leasing Ltd., to be allowed as a necessary and proper disbursement, there must be some medical reason for ordering an MRI. It is not simply enough that counsel seeks some (potential) objective evidence of an injury. Nor is it enough that counsel wishes to ensure that there is no latent injury such that his client might sign the standard release required. There is always a risk in personal injury litigation that a new injury or an injury that has not yet been determined might be found following settlement. That is simply a risk of litigation and a risk of settlement.

[45] I am not satisfied on the evidence before me that costs of the MRI scans were necessarily or properly incurred in the conduct of the proceeding and I will not allow them.

  • Psychologists Medico-Legal Report:

The other disputed item was a medico-legal report from a psychologist.   The Plaintiff retained the services of both a psychologist and a psychiatrist.  They both authored reports addressing the Plaintiff’s injuries.  The cost of the psychologist’s report was near $4,000.  The Defendant argued it was unreasonable for the Plaintiff to retain both experts stating that “(either) one of them could have provided the expert evidence required“.  Registrar Sainty agreed and disallowed this disbursement.  In doing so the Court reasoned as follows:

[52] I am not convinced, on the evidence before me, that it was necessary and proper to hire both experts given that their expertise clearly overlaps and each used similar methodology in assessing the plaintiff. The plaintiff saw both Dr. Joy and Dr. Sehon in July 2008. There was no reason, in my view, to have the plaintiff assessed by both, except to some extent, to do some “doctor shopping” (and in saying so I mean no disrespect to Mr. Fahey’s decision to have the plaintiff seen by both Dr. Joy and Dr. Sehon). My view is bolstered by the fact that, at the time that both experts were retained (or at least at the time their reports were ordered), the plaintiff had not yet seen Dr. O’Shaunessy (and certainly his report was not available) and thus Mr. Fahey’s concerns over having an expert who could “match” Dr. O’Shaunessy were unfounded.

[53] I find that is was not necessary or proper to have two experts engaged in a similar assessment at the time these experts were retained and, accordingly I disallow the claim for the expert report and fees charged by Dr. Joy in the amount of $3,937.50.

BC Injury Litigation – An Expensive Business


Ask any personal injury lawyer in BC and they will tell you that Injury Claim prosecution can be a very expensive business.
The greatest expense associated with this type of litigation involves the services of expert witnesses.  It is very rare to prosecute an injury claim without hiring at least one expert to address issues such as diagnosis of injury, cause of injury, prognosis and future care needs.  Medical experts cost money and these expenses are usually paid by Plaintiffs lawyers up front.
Reasons for judgement were released today by the BC Supreme Court, New Westminster Registry, demonstrating just how expensive the services of expert witnesses can be.
In today’s case (Hamo v. Khan) the Plaintiff was injured in a 2001 BC Motor Vehicle Accident.  After the accident the Plaintiff started to suffer from collapsing spells.  The Plaintiff’s lawyer retained Dr. Hurwitz who is trained as both a psychiatrist and a neurologist to provide an opinion with respect to the relationship of the collapsing spells to the trauma.  Dr. Hurwitz generated two reports and billed the Plaintiff’s lawyer $69,543 for his services.
The parties to the lawsuit could not agree whether this expense was reasonable and the matter was brought before the BC Supreme Court.  Ultimately Registrar Blok held that the disbursement as presented was not reasonable and considerably reduced the amount recoverable for the disbursement associated with Dr. Hurwitz’s services.  In addressing this disbursement Registrar Blok provided the following useful reasons:

[47] I conclude that the time spent on the summarizing of the collateral medical information was excessive; in fact, vastly excessive, particularly given that a fair amount of the pertinent history seems to have been summarized elsewhere in the reports.  I also agree that, based on Dr. Hurwitz’s own evidence, in the case of the first report there was inefficiency as a result of the lengthy time it took to complete the process.

[48] As Master Joyce made clear in Cloutier v. Wong, and also as stated in Chandi v. Atwell, there is simply no need to prepare meticulous summaries of medical information obtained from other sources.  I accept that there was a need for Dr. Hurwitz to read and fully absorb this other medical information, but there was no need to do it in this expensive and time-consuming way.  If that is the only way Dr. Hurwitz can accomplish this task then that is all very well as between Dr. Hurwitz and counsel who retain him, but for the purposes of costs between party and party it is excessive and that excessive element cannot be passed on to the opposing party.

[49] I turn now to the hourly rate.  This was the subject of much debate, mostly on the significance of the B.C.M.A. fee schedule, which at present has a guideline fee of $356 per hour for “court preparation” and a fee of $1,495 for preparation of a “medico-legal opinion”.  The defendant did not rely on the “medico-legal opinion” guideline fee (and here I note that the defendant’s own experts did not appear to adhere to it) but did rely on the court preparation fee as providing guidance when considering the $500 per hour rate charged by Dr. Hurwitz.  For her part the plaintiff cited Mohr v. Dent (1983), 40 C.P.C. 8 (B.C.S.C.), where the court said that the B.C.M.A. fee schedule was a guide to the medical profession and had “nothing to do with what is a proper fee for an unsuccessful defendant to pay” (at para. 62).

[50] Both submissions are correct, in their way.  The B.C.M.A. fee schedule is not determinative of the proper amount that ought to be allowed as a disbursement but, as was noted in Moore v. Dhillon, [1992] B.C.J. 3055 (S.C.), it is “of some assistance … to know what the medical profession, in this province, views as a fair, and, presumably, competitive rate, for that particular service” (at para. 212).

[51] In my experience the B.C.M.A. fee schedule can be somewhat helpful in more straightforward cases, but as the cases become more complicated and the medical experts more specialized or accomplished its utility is much less.  Of more relevance, in my view, is the $375 hourly rate charged to the defendant by Dr. Davis, a psychiatrist, who although he does not have a dual specialty in psychiatry and neurology like Dr. Hurwitz, does have a postgraduate specialist degree in both disciplines.  I accept that, all other things being equal, Dr. Hurwitz could rightly charge a higher hourly rate than Dr. Davis because of his additional specialty, but the question is whether the plaintiff has met the burden of showing that Dr. Hurwitz’s hourly rate ought to be 33% more than that of Dr. Davis.

[52] I should say, because it was argued, that I did not find any assistance in knowing the hourly rate of the neuropsychologist, Dr. Crockett.  His specialty is really quite different than that of the medically-trained experts.

[53] The plaintiff made much of the unique nature of Dr. Hurwitz’s qualifications, and submitted that since he is the only one around with this dual specialty “he is the market”.  But this is circular reasoning which could be used to justify any rate at all (he charges this rate, he is the market, therefore it is the market rate and it is ipso facto reasonable).  It also ignores the alternative avenue of retaining two experts instead of one very expensive expert.  Counsel for the defendant did not advance this argument, but it seems to me that a good case might have been made that the plaintiff ought to be limited in her costs recovery to the possibly cheaper reasonable alternative of retaining two experts.

[54] Although the plaintiff submitted that Dr. Hurwitz’s dual qualifications avoided the “wasteful” alternative of having to retain specialists in two different fields, that argument falls rather abruptly in light of the evidence of the charges of the other medical experts, neurologists Dr. Cameron ($2,182) and Dr. Robinson ($2,500), and psychiatrists Dr. O’Shaughnessy ($2,600) and Dr. Davis ($3,850 for his first report), compared to the $45,000 (exclusive of GST) charged by Dr. Hurwitz for his first report.

[55] For these reasons I have concluded that the plaintiff has not met the burden of showing that Dr. Hurwitz’s hourly rate is reasonable.  Doing the best I can on the evidence available I am satisfied that an hourly rate of $425 is a reasonable one in all the circumstances.

[56] For the first report I conclude that fees of $18,000 (plus GST) are appropriate.  In general, this reflects my conclusions on the hourly rate, the unproductive and unnecessary clinical records summaries (though accepting and allowing for time that had to be spent reviewing those records) and the element of inefficiency due to the lengthy report-creating process, while accepting the time spent on the examination of the plaintiff and related interviews (that is, all the time spent prior to February 16, 2005) and the time that was shown to have been spent on the actual preparation of the report.

[57] For the second report I would allow fees of $9,800, plus GST, based in general on the elimination of the time spent on the records summaries (while allowing for time to have been spent reviewing those records) and the reduction in the hourly rate.

[58] The trial preparation charges I would allow at $936.25, based solely on the reduction in the hourly rate.  For some reason GST was not included in the subject invoice and therefore GST is not to be added to this disbursement.

[59] I disallow the “administration and processing” charges included in the first two accounts.  While it may be an interesting debate whether these charges should be disallowed because they are part of overhead (as they usually are with lawyers’ bills) or may be charged in addition (which, for reasons unknown, is by case authority allowable for receivers and bankruptcy trustees), I leave the answer to that question for another time because in this case there is no (or at least, insufficient) evidence to show what Dr. Hurwitz’s actual costs were or the relationship between the round-figure charges of $500 and $250 and his actual costs.

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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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