Insurers Flat Fee Agreements Should Not Inure to the Benefit of Unsuccessful Plaintiffs: Connors v. D'Angelo
Apr 18, 2017
The Defendant, Ms. Tartaglia, being successful in her summary judgment motion, was awarded $33,858.86 in costs, which comprised of an award of $17,974.80 for the motion itself, and $15,884.06 for the action.
Counsel for the Plaintiff objected to the costs award on the basis of delay in bringing the motion, and noting that some of the disbursements on the bill of costs were not proper tariff items and should be disallowed. Justice Perell, however, found that the defendant’s claim for costs was modest, due to a flat fee arrangement between the defendant’s counsel and her insurer which capped the recoverable legal fees for the proceeding to date, other than work on the summary judgment motion, at $15,000. The actual time docketed for the motion, which was permitted to be billed as additional to the flat fee was $29,229.50, and counsel charged a low hourly rate at $200/hour (we note that defence counsel was a 2009 call, and a partner at his firm).
Justice Perell held that the legal fees were “modest and most reasonable” to a crucial and successful resolution of the claim against her. Without addressing which disbursements reasonable, and which were not, he disallowed the disbursements but increased counsel fees correspondingly.
This decision is another along the lines of that made by Justice Sanderson in Traders v MVAC where judges will assess cost based on what a reasonable fee would have been but for the special rates negotiated by the insurer, and allow a far greater percentage than the customary 60% to 2/3 on a partial indemnity basis where it is perceived that the rate charged to the Defendant is below market rate.
If you have any questions about this blog or a costs issue, please contact the author, Timothea Leung.