Written by Neil Zimmerman
Justice Sullivan’s decision in Couch v Olatiregun, 2023 ABKB 402, is an important reminder to all litigants that costs are to be awarded in accordance with the principles of proportionality, fairness, and efficiency that underlie the Alberta Rules of Court.
Couch is the decision of Justice Sullivan on costs following a personal injury trial in which the Defendant did not attend the trial. Justice Sullivan awarded the Plaintiff less than $5,000 for a WAD I injury, following a two-day trial. Exercising his discretion on costs, in accordance with the principles underlying the Rules, Justice Sullivan awarded the Plaintiff $1,300 in costs out of the $12,378 claimed. This is a significant decision as it highlights the importance of proportionality in costs, offering a valuable precedent to reference when seeking to curtail cost exposure in cases that settle for proportionately modest sums.
The Decision in Couch v. Olatiregun, 2023 ABKB 402
In Couch v Olatiregun, 2023 ABKB 104, the Plaintiff was awarded $4,722.00 in damages for a WAD I injury he suffered in an April 2017 motor vehicle accident. Despite alleging he suffered from chronic pain, the court concluded the Plaintiff was not suffering from chronic pain, he did not suffer a serious impairment, and he had pre-existing medical conditions relevant to his post-accident complaints.
Couch v Olatiregun, 2023 ABKB 402, is the costs decision from Justice Sullivan related to the Plaintiff’s personal injury matter. The Defendant did not attend the trial and many of the Plaintiff’s medical records were submitted without calling the treating doctor in an attempt to expedite the trial and save costs. The Plaintiff claimed $12,378.00 in costs from the Defendant who was found 100% liable for the accident.
The Court rejected the Plaintiff’s submissions on costs and awarded only $1,300. The Court reviewed each of the considerations under Rule 10.33 of the Alberta Rules of Court, and determined that in accordance with the Rules and the underlying principle of proportionality, the Plaintiff should only recover a fraction of their costs. Justice Sullivan noted that the Plaintiff claimed $225,000 in damages in the Statement of Claim and was awarded less than $5,000, representing just over 2% of the damages claimed. The litigation did not involve novel issues and the case would not likely have far-reaching implications on future motor vehicle accidents. Additionally, the trial only last for 111 minutes over two days.
Some of the factors reviewed by Justice Sullivan favoured the Plaintiff. The Plaintiff took steps to shorten the length of the trial by entering medical records without witness testimony and bypassed the JDR process. However, Justice Sullivan held, that despite the attempts to shorten the trial there was a significant discrepancy between the amount awarded at trial and the amount claimed that warranted a reduction of costs. Although the Plaintiff only claimed 75% of Column 1 fees a further adjustment was required to account for the principles of proportionality, efficiency, and fairness that underlie the Rules. The evidence presented at trial provided no indication that damages amounting to $225,000 were warranted and at paragraph 42 Justice Sullivan stated:
There was no reasonable basis for claiming such exorbitant damages and pursuing this action in the Court of King’s Bench when there were more efficient avenues in which this action could have been addressed.
Takeaways for the Insurance Industry
While Justice Sullivan’s decision is a welcome reminder to litigants in general, the decision holds particularly positive implications for insurance adjusters. Legal costs are a leading expense for personal injury matters and this decision reflects the Court’s mission to maintain the principles of fairness and proportionality. By aligning legal costs more closely with the specific circumstances and outcomes of each case, this decision not only promotes a more balanced and equitable approach, but also empowers insurance adjusters to advocate for cost reductions that reflect the actual magnitude of settlements.