What’s The Difference Between Partial Indemnity and Substantial Indemnity Costs?

Image via stephensockett.com

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:

[25]           I think it appropriate to award costs at 60% of the time charged for partial indemnity costs and 90% for substantial indemnity costs for the work after the offer to settle. The rates charged, however, must be reduced because the rates have been claimed throughout at the 2013 rates.

Tags: , , ,

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: