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Appeal court clarifies costs orders against lawyers

|Written By Kendyl Sebesta

Counsel for an Ottawa lawyer previously ordered to pay $72,000 in costs for his actions on behalf of two former clients says an Ontario Court of Appeal decision setting aside that order provides important clarification for the profession.

The case is a reminder that lawyers shouldn’t fear personal costs awards against them, says Allan O’Brien.

“I think it certainly provides an important clarification to the courts about under what circumstances they are able to award costs personally against a lawyer,” says Allan O’Brien, who represented the lawyer, Kenneth Bickley.

The comments follow the June 15 ruling in Galganov v. Russell (Township), in which the Ontario Court of Appeal set aside the decision of Superior Court Justice Monique Métivier that awarded the eastern Ontario Township of Russell $180,000 in costs.

In her May 2011 ruling, Métivier ordered Bickley to pay 40 per cent of those costs.

Métivier had determined that although Bickley hadn’t acted in bad faith, his conduct during a constitutional challenge by his former clients to stop a bylaw that would require all new commercial signs to be in both English and French had caused unnecessary costs.

But the appeal court, in a ruling written by Justice Karen Weiler, decided otherwise this month. It determined Métivier didn’t adequately separate Bickley’s conduct from that of his clients or fully consider what aspects of his actions were inappropriate.

“The rule was not intended to allow the frustration of the opposing party’s counsel to be taken out against a counsel personally because he or she went down a series of blind alleys with his or her clients’ instructions or approval,” wrote Weiler in reference to the rule related to ordering costs against a lawyer.

“Rather, resort is to the general principles governing costs between parties, which include deterrence of unnecessary steps that unduly prolong litigation.”

Russell resident Jean-Serge Brisson and language-rights activist Howard Galganov, both represented by Bickley, had launched a constitutional challenge against the bylaw last year. They said it infringed their rights to freedom of expression.

Galganov participated in the constitutional challenge even though he wasn’t a resident of the township. In August 2010, Métivier ruled he had no standing to bring the application. Similarly, Métivier ruled the township’s bylaw didn’t violate Brisson’s constitutional rights.

Neither has brought actions against Bickley for improper conduct.

The court ordered $100,000 in costs against Galganov last year as well as $80,000 against Brisson.

Several issues arose during the litigation that put Bickley at the centre of allegations by the township of poor conduct.

The first issue involved a notice of examination of former Russell mayor Ken Hill filed by Bickley and an intention to call him as a witness in the matter. Bickley later changed his mind and decided not to call Hill. The moves cost the township significant time and money, the application judge noted.

But Weiler determined the application judge failed to “consider not only whether the mayor Hill incident caused unnecessary costs but whether, in doing so, Bickley was acting in his personal capacity or as an agent for his clients.”

Bickley explained the incident in an affidavit. “As I explained to counsel for the Township of Russell, my primary reason to cross-examine mayor Ken Hill was to ensure the admissibility of the transcript of the radio interview with mayor Ken Hill which took place on June 18, 2008, and to expand upon his positions,” Bickley said in his affidavit.

“In seeking his attendance at the hearing, I deny that my intention was to embarrass Ken Hill as alleged by the Township of Russell in the within motion. At all times, I was following instructions of my client.”

However, due to solicitor-client privilege, the appeal court decision noted Bickley couldn’t expand upon his actions as they pertained to his conduct in the case.

Similarly, the second issue involved an application by Bickley to obtain leave to have the Brisson and Galganov applications heard together and to have Galganov be an expert in Brisson’s matter.

“The township wasted time and money in cross-examining Mr. Galganov as to his expertise and researching the state of the law on biased expert witnesses,” the application judge noted.

However, Weiler said the court couldn’t use hindsight to evaluate Bickley’s decision.

Lastly, the township made several complaints that Bickley’s conduct both before the hearing and during it contributed significantly to its time and costs in the action.

Weiler summarized the township’s complaints when she noted that “at the hearing, Bickley often could not find cases to which he referred, had not always brought the materials he needed with him, and did not understand that the ‘joint’ book of authorities filed by the township referred to the Galganov and Brisson applications being heard jointly and were not intended for the joint use of counsel.”

Still, Weiler said the court must apply the principle of “extreme caution” in awarding costs personally against a lawyer.

“Finally, if an order of costs is to be made against a lawyer personally on the basis of negligence, then that negligence must be based on a breach of the objective standard of care of a reasonably competent lawyer in the same position,” wrote Weiler.

“Here, that position would be of a lawyer acting on instructions or with the approval of his clients.”

Ronald Caza, the lawyer for the township in the matter, was away from the office until July and was unavailable for comment.

O’Brien, meanwhile, suggests the appeal court has issued clear directions on the question of costs against lawyers. “In this case, the clients weren’t upset with Mr. Bickley. It was the succeeding party that was upset.

I think the court sent very clear directions that when a client hasn’t waived solicitor-client privileges and the clients have given their lawyer specific instructions throughout the process and all the steps taken were properly reviewed, courts must be vary cautious about awarding personal costs against a lawyer.”

O’Brien, a senior partner at Nelligan O’Brien Payne LLP, adds the ruling is also a good reminder that advocates shouldn’t fear personal costs awards against them in such cases.

Besides setting aside the order, the appeal court awarded Bickley the costs of the motion before the application judge, the motion for leave to appeal, and this month’s appeal on a partial indemnity basis. Weiler fixed those costs at $25,000.

For more, see "Lawyer on hook for 40% of clients' costs award."

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