Newbould J. in Stetson Oil & Gas Ltd. v. Stifel Nicolaus Canada Inc , 2013 ONSC 5213 has done many Ontario litigators a great service by making the calculation of costs less of an art and more of a science.
Rule 57.01(1) of the Rules of Civil Procedure, RRO 1990, Reg 194, (as am.) [the “RCP”] sets out the general principles and factors for the court to consider when exercising its discretion to award costs under section 131 of the Courts of Justice Act.
Sub-rule 57.01(5) of the RCP requires a party who is awarded costs to serve a bill of costs (Form 57A) on the other parties and file it with proof of service.
Pursuant to sub-rule 57.01(6) of the RCP, unless there is prior agreement on costs, each party intending to seek costs for any step in the proceeding must bring to the hearing a costs outline (Form 57B) not exceeding three pages.
The common approach is to set out the lawyer’s name, year of call and hourly rate and provide a table with three columns: Actual Rate, Partial Indemnity Rate and Substantial Indemnity Rate. The degree of variation of what comprises the partial indemnity or substantial indemnity rate is well-known. Some lawyers specify 50% for partial indemnity, while others set out 60%, or more. As far as substantial indemnity rates are concerned, I have seen some lawyers claim between 75% to over 90%, approaching Full Indemnity Rate.
Fortunately, Justice Newbould has provided a straightforward calculation as follows: