Consultation Paper Regarding the Costs Grid

Introduction

The Civil Rules Committee resolved to strike a Costs Subcommittee to attempt to determine possible solutions to the problems identified in the present system for fixing costs, including whether a block fee structure as generally proposed in a report prepared by a committee of judges of the Superior Court, could be developed that would be responsive to the principle of indemnification, permit costs to be fixed in a speedy, simple and uniform way and result in awards that in most, if not all, cases are fair and reasonable.

The Costs Subcommittee prepared a consultation paper setting out a proposal for a block fee model for fixing costs. The report contained background as to the subcommittee's mandate and deliberations leading to the preparation of the consultation paper. This paper was widely distributed and on February 27, 2004 was (and remains) posted on the Ontario courts' web site.

The subcommittee received a large number of responses to this consultation paper, most of which had significant reservations about the proposed model. At the same time, there was a wide consensus that the existing Costs Grid as contained within the Rules of Civil Procedurehas led to a number of difficulties, as set out in the consultation paper, and does require revision. Additionally, a number of the responses suggested other potential models for fixing costs that were considered worth investigating further. The subcommittee reported these results at the spring meeting of the Civil Rules Committee, held on June 24, 2004.

The Rules Committee unanimously voted to request that the Subcommittee continue to meet in order to develop a different model for fixing costs, for consideration at its fall meeting in November 2004. The Subcommittee has met on the number of occasions since June and has developed a new model for fixing costs, incorporating some of the best practices that have developed since the enactment of the Costs Grid rule in 2002.

The proposed model, more fully described below, is designed to be fair, consistent, predictable, efficient and preserves the current requirement that judges fix costs in all but exceptional cases.

The Costs Subcommittee of the Civil Rules Committee is seeking input concerning this new model for fixing the costs of proceedings. Responses from interested parties relating to this, or any other, model for the fixing of costs of proceedings may be forwarded to the attention of John Kromkamp by fax at (416) 327-6153 or by email John.Kromkamp@jontario.ca.

The next meeting of the Civil Rules Committee will take place in November 2004. In order to permit any responses to this consultation to be considered by the Costs Subcommittee with a view to providing the best possible proposal to the Rules Committee, responses should be received no later than Monday, October 25, 2004.

Costs Subcommittee Proposal #2

The following revised proposal for fixing costs is proposed by the Costs Subcommittee for comment:

1. The Costs Grid will be eliminated.

2. The following factors will be added to rule 57.01 as additional considerations when the court fixes costs:

(a) the amount of costs that an unsuccessful party could reasonably expect to have to pay for the procedure for which costs are being fixed;

(b) the principle of indemnity including, where applicable, the experience, rates charged and hours spent by counsel for the party entitled to costs.

3. Rule 57.01(5) will be amended as follows:

(5) - Bill of Costs - Unless the parties have agreed on the costs that would be appropriately awarded for any stage in a proceeding, every party who intends to seek costs for any stage shall exchange with every other party involved in the particular stage for which costs are being sought, and bring to the hearing, a costs outline (Form 57B) not exceeding three pages in length.

4. A Notice to the Profession will be issued by the Rules Committee incorporating a guide for the profession regarding the fixing of costs under Rule 57 and the completion of Form 57B.

5. The definition of substantial indemnity costs in rule 1.03 will be amended as follows:

"substantial indemnity costs" means costs awarded in an amount that is 1.5 times the partial indemnity costs that the court would otherwise fix.

The following appendices (pdf only) are attached:

Appendix A - Costs Outline (Form 57B)

Appendix B - Notice to the Profession

Appendix C - Ancillary Amendments to the Rules