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A Special Report: The Litigation Tidal Wave (4 of 6)

Your liability for costs


Rule 57.07

No matter how you slice it, Rule 57.07 is very much a double-edged sword that comes at a significant cost, financially, personally, and through increased risk to lawyers individually and collectively.

Although it's been on the books for 15 years, the Rule has only become an issue for litigators in the last two or three years.

Dutton, Brock's Brian Brock, a veteran of litigation practice, suggests two possible explanations for this increase in Rule 57.07 claims:

  • a more aggressive, uncivil practice style among some litigators which has those on the receiving end of multiple and unnecessary motions seeking revenge by moving under the Rule to impose a costs award against opposing counsel personally; and
  • recent liberal interpretations of the Rule, which itself is broadly worded.
That broad wording, suggest both Brock and Nancy Spies, a senior litigator at Stockwood, Spies, is itself a double-edged sword. Although designed to help reign in lawyer conduct, it presents an exposure to claims where many lawyers thought there was none.

All conduct at risk
Moreover, says Spies, lawyers need to understand that the Rule applies not only to counsel's conduct at trials, but also to every aspect of the way a lawyer handles a case: "The way you conduct yourself, your conduct towards the court and other lawyers, your conduct at out-of-court examinations and on motions, all potentially expose you to a Rule 57.07 claim."

A few court rulings which, in Brock's view, wrongly interpreted the Rule's wording away from the traditional context of requiring a finding of a serious and important breach of conduct to a standard of ordinary negligence have the potential to exacerbate the problem.

"The expectation was - and should be - that behaviour must be egregious or outrageous, more akin to what would normally result in a ruling of contempt of court for the Rule to apply," explains Brock.

Rulings in which Rule 57.07 was interpreted to apply in a broad range of circumstances could be offset by more recent decisions in which the courts took a more narrow view of the Rule, suggests Spies - but both agree the jury is out on which view will prevail. And until such time, both Brock and Spies suggest lawyers be wary - not only because of their real exposure under the Rule, but also because the tables could be turned on the lawyer bringing the motion.

Tables turned, moving lawyer can be assessed costs
"If the test under which the Rule applies becomes stricter, those who seek to impose a cost award under the Rule and are found to be wasting the court's time could find themselves having to pay solicitor/client costs, along the lines of failing to prove an allegation of fraud," points out Spies. And that, she suggests, opens the door to clients seeking costs or the courts disallowing costs between the lawyer and client.

Lawyers considering the Rule should also take note that although the claims are numerous, few claims for costs sanctions actually succeed. Many such claims, suggests Brock, are in fact frivolous, revengeful and otherwise unsupportable - again opening the moving lawyer to the possibility of having solicitor/client costs awarded against them. And even where they are substantiated, claims for costs sanctions generally have not stood up to the test of being serious and unequivocal.

Win or lose, Rule 57.07 claims come at a cost
No matter how frivolous or valid the claim and no matter what the outcome, claims brought under Rule 57.07 exact a price. The costs to the insurance program to administer and defend these claims get passed along to the whole of the bar - through insurance premiums.

But more compelling is the personal cost of this type of claim, suggests Brock: "It strikes at the core of your being, because it's your behaviour, your decisions, the way you acted, what you said that all are on trial. This type of claim exacts a huge personal price that, based on my experience, leaves lawyers quite shaken."

Why then do lawyers nowadays resort to the Rule? One theory offered by Brock has to do with the nature of practice and the attitude of lawyers who litigate. Today's litigators, he says, reflect today's society. Everywhere we turn, people are more aggressive, self- interested, uncivil and impatient and that, along with changing values and a changing structure of law practice, translates into a decline in civility in the profession.

"The fact is, we often do say terrible things to each other, on the record. Instead of stepping back and focusing on moving the litigation forward, we get caught in the moment, in going face-to-face with opposing counsel," he admits. "What we should be doing is sit back, take a deep breath, and focus on the strategy - not the emotion of the moment."

Spies agrees. "Increased pressures in practice, higher stress levels, less supervision of young lawyers, less opportunity for mentorship, more young lawyers out there on their own, aggressive lawyers enjoying success standing out as examples to follow - all are factors contributing to a decline in civility in legal practice."

One solution: Make lawyers more aware of the Rules of Professional Conduct, their obligations to the courts and to each other, suggests Spies, as a first step in restoring some civility to litigation practice.

Getting it Right by ...

Avoiding Rule 57.07 Claims for Costs Personally
1) Abide by the Rules of Professional Conduct by
    a) balancing your multiple duties as an officer of the court - to your client, to your colleagues and to the court;
    b) employing patience and respect towards your adversary;
    c) reigning in those emotions and hostilities and resisting the temptation to engage in verbal or written warfare; and
    d) venting your frustration through a mentor or outside of work in exercise, hobbies or reflection.
2) Remain the capable advisor that you are by
    a) staying independent;
    b) staying true to the client's objectives rather than your own; and c) exercising judgment with respect to using the litigation process
3) Recognize that such claims are costly to you as a litigator whether you use the rule as a sword or must respond to the rule in terms of:
    a) the cost to your insurance program overall;
    b) the cost to your reputation if you face a motion for costs personally;
    c) the cost to you if you bring a costs motion unsuccessfully; and
    d) the cost to all of the clients involved who become entangled in this sideshow.

Key DatesMore

January 31, 2012
Real estate and civil litigation transaction levies and forms are due for the quarter ended December 31, 2011.

 

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