Costs award reminder not to engage in “sharp practice”

November 24th, 2015 by

By Michelle Stephenson

A recent costs award in a personal injury action serves as a reminder to lawyers that their professional duty extends beyond representing their own client, to conducting themselves in a manner which promotes both parties’ right to a fair hearing. This includes being civil, acting in good faith, and not otherwise engaging in “sharp practice”.

The important distinction to be drawn is that between tactical decisions which strengthen your client’s position, to be decided on its merits at trial, and those tactical decisions or “games” which may hinder the opposing party’s ability to have its own position decided fairly at trial.

Saleh v. Nebel, an action arising from a motor vehicle accident, culminated in an 8 day jury trial, and was ultimately dismissed after the Plaintiff’s award did not meet the threshold of seriousness required by the Insurance Act.

When the time came for costs to be awarded for the action, the presumption was that the Plaintiff, as the unsuccessful party, would pay a portion of the Defendant’s costs.

However, costs are in the absolute discretion of the Court, and this was one case where the Court chose to exercise this discretion.

As a result of the conduct of the Defendant throughout the litigation, which was found to constitute sharp practice, the Court opted not to award it the “$100,000 costs award to which it would have presumptively been entitled”.

These sharp practices, described by the Court, included:

  • delaying organizing their documents and witness lists for trial, resulting in an 8 day trial which could otherwise have been completed in a few days;
  • temporarily denying the existence of documents already undertaken to be produced;
  • failing to fulfil undertakings until the eve of trial;
  • threatening to require proof of patently valid documents;
  • delivering new expert’s reports during the course of the trial;
  • failing to agree to the admissibility of relevant documents, while insisting on changes being made to irrelevant ones;
  • refusing to share the costs of joint expenses; and
  • refusing to cooperate on court ordered procedural matters.

This type of behaviour has the effect of slowing the process of an action proceeding to trial, lengthening the trial itself, and increasing costs to both parties. Furthermore, it is typically aimed at discouraging and/or disadvantaging the other party by making it difficult to them to respond to evidence adduced or to present their case effectively.

This type of sharp practice can interfere with the administration of justice and, as officers of the court, lawyers have an obligation to refrain from such conduct. In situations like this, where that obligation is breached, the Court may use costs awards to express its disapproval of this behaviour.

Ultimately this was a somewhat hollow victory for the Defendant as, despite not having to pay the Plaintiff the $30,000 jury award, they were stuck with the entirety of the legal costs of their defence, which was well over $100,000.

While the sharp practices engaged in were undertaken by counsel, and lawyers should be aware that this type of behaviour can lead to law society sanctions, this decision further serves as a warning to individual parties when it comes to instructing their counsel.

Instructing your lawyer to use aggressive defence tactics, such as “playing uncivil, tactical, inappropriate, old school, trial by ambush games” in the course of litigation, may ultimately be a costly move.

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