Attached is a decision handed down last week, dealing with an issue that is (or should be) of growing concern to insurers: premiums on costs.
In Walker v. Ritchie, Ontario Superior Court judge Brockenshire awarded a costs premium of $200,000 to the successful plaintiffs’ lawyers. This was in addition to an award of over $500,000 for partial indemnity costs. The costs were given in a personal injury case that was tried in 2002 over four weeks and that culminated in a judgment of more than $5 million.
The main basis for a premium was that the firm that represented the plaintiffs had “carried” the file without payment (and is in fact still doing so, as the decision has been appealed). In allowing the premium, Justice Brockenshire followed a couple of other recent Ontario cases in which premiums had also been given: Banihashem-Bakhtiari v. Axes Investments Inc. (premium of $350,000) and Dybongco-Rimando Estate v. Lee (premium of $150,000).
These cases all involved serious injuries and relatively large awards of damages (although damages in the Dybongco case were less than a million dollars). However, it appears that premiums are being sought by plaintiffs’ counsel more and more frequently and in some less serious types of cases. There was a soft tissue claim recently tried in Ottawa and settled after the trial had commenced, for an amount less than $500,000. The case is Russet v. Bujold. The plaintiffs in that case are seeking a premium on costs from trial judge Power J. If Justice Power sees fit to allow a premium, this might signal that such an approach is becoming the norm. We expect his decision on costs to be released any day now and we will update you further at that time.