Roger writing the LAWmag
18
Jun 2014

Access to Justice Culture Shift on Costs Starts in Québec

A new, avant garde and phenomenal change to the culture of law as we know it is regrettably presented in legalese. Click here to see the legalese behind this initiative that nonetheless has "access to justice" and the "simplification of the justice system" written all over it.

Perhaps it matters less how arduous the crusade, as long as Jerusalem has is reached.

Costs (see Legal Definition of Costs) have forever been a thorn, a bane to the self-represented individual who tries to present his/her own case before a court of law.

The law of costs is not simple. It is complicated and for the self-represented litigant, it would be fair to say it is very, very complicated.

In a nutshell, the theory goes, if/when you are successful in litigation, you ought to be able to retrieve something from the other side as partial recognition for the compensation for the legal fees you have had to spend, and full compensation for expenses such as expert opinions, service of process, photocopies and the like.

This discourages frivolous lawsuits but had become such a complex area of law that the baby has long been lost with the bath water.

Each jurisdiction has developed a system of costs whereby the winner in an action presents the loser with a bill of costs which is much like an invoice, and which proposes what that amount of compensation would be, item by item. In many jurisdictions, the costs are calculated based on guidelines or a grid which might propose so many hours for specific tasks and which may also propose a higher hourly rate for the more complex cases. Getting in and out of those guidelines, often referred to as tariffs, is a challenge for any lawyer the first time they do so and it is hardly easier as one's practice of law continues. So specialized in the area costs that some lawyers do nothing but; they rent themselves out to other lawyers to help them prepare bill of costs or to review and critique bill of costs received from other lawyers. In every Canadian major urban centers it is not at all unusual to find a small little cottage industry comprised of a handful of lawyers who are experts in the law of costs in that particular jurisdiction. It is a perfectr exemple of the unbundling of legal services at the professional level.

When, for example, a huge bill of costs is contested between litigants with deep pockets such as major corporations, it is usually these guys or gals that go at it before the magistrate that is tasked with the job of setting costs when costs are in dispute. That exercise, further litigation, is called a taxation.

Complicated? Think ice cream flavours at  "Baskin Robbins". Here are just some of the unique phrases in the law of costs: Solicitor and Client Costs, Solicitor and Own Client Costs, Increased Costs, Double Costs, Costs Follow The Event, Costs if Demanded, Costs in any Event of the Cause, Costs in the Cause, Taxation of Costs, Bill of Costs, Security for Costs, Party and Party Costs, etc.

Books on CostsCosts, as a subject area of law, has its very own section in any good law library - call number KN 397. And the 100+ books are not 20-pagers.

That is the reality in Canada, the United States, Australia, England - in most jurisdictions which might be referred to as "modern democracies".

It is a very real problem in terms of access to justice especially for self-represented parties and any individual or group such as First Nations who must, in most cases, face the Government of Canada in cases where they seek to assert legal rights. Aboriginal law cases tend to be long and complicated and a small aboriginal community must live with the terror of not only possibly losing the case but also of facing a substantial bill of costs from the government in the event of loss in the courts.

And lawyers defending their clients especially against an appeal, can force the issue in costs, demanding a taxation and security for costs in the event of an appeal. This is the chilling reality faced by self-represented litigants in Canadian courts today.

This very same access to justice problem faces virtually every citizen who needs to square off against a deep pocket or wealthier plaintiff or defendant. So very real is this threat that it is not uncommon at all for lawyers to actually try to spook the other side by writing in the preliminary letters that they exchange, slightly veiled references to costs such as, "you realize that if we are successful in this action as we believe that we will be, we will be seeking full costs from your client including if applicable, special costs." And, if the other side is really aggressive, they can demand security for costs before the first day of trial. More litigation.

As an access to justice soldier, I've often wondered if I am guilty of common law heresy for fostering the idea that costs ought to be done away with entirely; that each party ought to be responsible for their own costs in any event of the result of the litigation except for legitimate disbursements such as expert opinions, photocopying, whatever costs are associated with actually filing court documents, witness fees and those kinds of real, hard disbursements.

Which brings me to Quebec's guillotine solution to the problem of costs. It is not yet law but that appears to be only a matter of time as it has gotten through all the legislative steps in the National Assembly of Québec. Bill 28, An Act to Establish the New Code of Civil Procedure received Royal Assent on February 21, 2014 and now awaits only the government's decree to become law.

Leïla Jananji of the Montréal law firm Donati Maisonneuve (http://www.donatimaisonneuve.ca/) wrote, in an article published in August 2013 on the proposal:

"The new (Code of Civil Procedure) revisits the concept of costs. Instead of adjusting the amounts granted by the Tariff of Judicial Fees of Advocates, Bill 28 repeals it. Thus, each party will assume their own professional fees and won’t be able to include the amounts that were granted by the Tariff to their bill of costs. At the same time, the Bill (#28) maintains the rule that the party that was successful in its proceedings is entitled to the legal costs, unless the court decides otherwise. The legal costs that the successful party will be able to recover are the following: court costs and fees, professional fees and expenses for the service or notification of pleadings and documents, witness indemnities and allowances, expert fees, interpreter fees, fees for registration in the land register or the register of personal and movable real rights, costs related to taking and transcribing oral evidence filed in the court record."

Ms Jananji refers, in her article, to those historic sections of law proposed at §339 to §342 of the new Code of Civil Procedure of the Province of Québec which in all likelihood will become law before the end of 2014.

As noted above, first, the somewhat-convoluted language is admittedly taken from the English language version of what would have been a French language bill before the Quebec National Assembly. To see the actual language of the relevant sections, that being §339-344 of the prospective new Code of Civil Procedure, click here.

There will still exist the rigmarole of a bill of costs but divested now, for the most part, of the extravagant items and amounts otherwise available in regards to compensation for legal fees except, as noted above by Ms Janaji for disbursements and, below, for exceptional cases.

The magic of the new rules being proposed for Quebec is that it reverses the time honored and problematic presumption that, including a tariff amount in respect of legal fees, costs follow the event and that are presumed payable to the successful party. Instead, once Bill 28 comes into force, costs, as the common law knows them to be, insofar as they would include an entitlement to a tariff amounts as compensation for legal fees spent, is presumed to not be available to the successful side of any litigation. "Legal costs" are limited to disbursements - such things as expert fees.

The court is allowed, though, to allow costs inclusive of compensation for legal fees in some limited cases mostly related to cases where a litigant has abused the court process, and on the basis of judicial discretion as set out at §341 and §342. One little bit of contemporary language found in Bill 28 is the ability of the court to order costs including compensation for legal fees (§341):

"... if it is of the opinion that the successful party did not properly observe the principle of proportionality or committed an abuse of procedure…."

It is unusual, and in fact it runs counter to the entire principal of civil law generally and a Civil Code jurisdiction specifically, to leave so much to mercy of judicial discretion. But that would appear to be a small price to pay to finally, put into place, a system where costs are the exception and not the rule.

The challenge now, if it can ever be faced successfully, is to find a common law jurisdiction willing to pull the plug on costs like this in the name of access to justice. Costs is one of those sacrosanct shrines of the common law. The keepers, the traditional decision-makers of the common law are loath to thinking outsie-the-box of precepts handed down from the old villages of medieval England, it must be perfection itself and if ever "experimented" or meddled with, might cause the whole system of law to collapse. If it was good enough for Coke, Bacon, Littleton, Blackstone, Mansfield, Jeffreys, Rommilly and the list goes on, it must be for the best.

In Canada, bijurality comes with benefits. In our own common law backyard, Quebec, it seems, is not so-institutionally adverse to change and has not just looked outside the box - it is proposing to set foot there.

REFERENCES:

  • Duhaime, Lloyd, 1267 A.D.: Costs Are Born .... and Borne - A History of Costs
  • Duhaime, Lloyd, The Law of Costs: Juastice's Boogeyman
  • Jananji, Laila, Quebec’s New Code of Civil Procedure: Towards a New Culture of Law, August 2013, published on the website of the Risk Management Counsel of Canada, an association of law firms that provide legal services to the insurance industry. The article was still available on the Internet as of June 18, 2014 at http://www.rmc-agr.com/quebecs-new-code-of-civil-procedure-towards-a-new-culture-of-law/.
Ed. note: the opinions expressed in this article are the personal opinions of Lloyd Duhaime only.

Posted in Current Events, Litigation
on
by

Attached Images

  • Access to Justice Culture Shift on Costs Starts in Québec