The case of Camacho v Lacroix, 2024 ABKB 179 highlights the need for defendants to carefully assess and challenge excessive or unsupported claims, particularly in relation to second counsel fees and pre-judgment interest adjustments.

Background

In March 2009, Ms. Camacho was involved in a rear-end collision that resulted in significant personal injury. Fifteen long years later, after a two-week trial, she was awarded $471,298 in damages for chronic pain stemming from a whiplash injury. The awarded amount was a fraction over the $2 million she sought. The present case centered on unresolved disputes concerning costs, disbursements, and pre-judgment interest, with the damages placing it in Column 3 of Schedule “C”.

Ms. Camacho sought total costs of $233,200, which included baseline costs calculated on Schedule ‘C” amounting to $116,650, doubled for an “inflation adjustment”. She argued the Schedule “C” tariff was outdated and inadequate. The Defendant contended this claim was excessive, proposing instead $85,800 in costs as reflective of Column 3 of Schedule “C”. Additionally, the Defendant attributed delay in litigation to Ms. Camacho, using this as a basis to contest the inflationary adjustments. 

Ms. Camacho claimed $155,530.09 in disbursements, including substantial fees of $59,035.64 for her economic loss expert. These fees covered three reports and trial preparation. Additionally, Ms. Camacho sought almost $5,000 for witness expenses for her brother and husband, who did not testify. The remaining disbursements involved filings, questioning costs, travel expenses, and other litigation-related costs which accrued over more than a decade. The Defendant argued that costs for unnecessary witnesses and the high fees for her economist were excessive, particularly given the limited impact of her evidence on the final decision. 

Ms. Camacho asserted that pre-judgment interest should apply for the entire duration of the claim. Conversely, the Defendant argued that excessive delays in bringing the action to trial warranted a reduction in the period for which pre-judgment interest was awarded. 

Decision

The Court’s decision incorporated a set principle ensuring costs awarded were reasonable and proportionate. Despite Ms. Camacho’s claim for nearly $400,000 in costs, the Court adjusted this amount to $111,800, reflecting the principle costs should be proportional to the complexity and conduct of the case. The base costs were determined using Schedule “C”, and an additional sum was granted for second counsel, who provided valuable assistance even though their presence was not strictly necessary. This approach adhered to the principle costs should be fair and reflective of the actual value added by second counsel. 

In assessing second counsel costs, the Court applied a pragmatic approach. Rather than making a binary decision on the necessity of second counsel, it evaluated their contribution based on the value they added to the case. The Court divided trials into three categories, those where: (i) second counsel is a luxury and not required, (ii) second counsel is obviously justified, and (iii) the assistance of counsel is valuable, but not necessary. Here, the Court determined the trial fell into the third category. The Court’s decision to award additional costs for second counsel was in line with the principle such fees should be proportionately assessed, acknowledging that second counsel’s presence, while not essential, did provide beneficial support.

Regarding disbursements, the Court carefully evaluated each claim to ensure it met the principle of reasonableness. The Court cited prior case law to clarify the reasonableness determination is made in reference to the time the expenditure occurred and does not need to have contributed to success at the trial. As such, Ms. Camacho was awarded costs for her economist’s initial report and certain travel expenses. Claims for a credit card surcharge and excessive trial preparation fees were denied. The Court highlighted the reasonableness of costs should be evaluated from the perspective of their reasonableness at the time they were incurred. 

On pre-judgment interest, the Court adhered to the general rule of awarding it but exercised direction to reduce the interest period by three years. The adjustment was made to account for the Plaintiff’s lack of diligent prosecution. The Court’s decision was consistent with the principle that pre-judgment interest can be varied based on factors such as the Plaintiff’s diligence and the overall fairness of the case, ensuring the final award was equitable. 

Take-Away

For insurance defence lawyers in Alberta, this case highlights the need for careful scrutiny of a plaintiff’s bill of costs. We should ensure claimed costs and disbursements are proportional and well-documented, disputing excessive or unsupported claims. 

This decision also underscores the importance of justifying the use of second counsel and being aware that pre-judgment interest can be adjusted based on litigation delays and the parties’ conduct.