Trevor Todd and Jackson Tod have practiced contested estates for over sixty combined years, including dealing with contentious costs awards.
Re Chou Estate 2024 BCSC 481 dealt with the issue full indemnity for costs.
Full indemnity costs are generally awarded when one party is so successful at trial for what could be a number of reasons , that the court essentially says that the losing party must pay all the legal fees of the winning party, so that there is full indemnity.
Full indemnity costs are still subject to review to ensure their reasonableness, and an award of full indemnity costs is not a “blank cheque” ensuring recovery of all legal fees and disbursements, as Justice Donegan discussed in Hobbs v. Warner, 2020 BCSC 1180, at para. 12.
In Hobbs v. Warner, Donegan J. determined that it was appropriate on an assessment of full indemnity costs under the PPPA to adopt the approach taken on a review of a lawyer’s bill under the LPA, which requires the registrar to consider the factors set out in s. 71(4) of the LPA.
In reaching this determination, Donegan J. referred to two decisions of the Registrar of the B.C. Court of Appeal, although neither of them involve the assessment of full indemnity costs awarded in estate proceedings: Wanson (Bristol) Development Ltd. v. Sahba, 2019 BCCA 459 [Wanson], and Pallot v. Douglas, 2018 BCCA 315. Decisions of the Court of Appeal Registrar are not binding on the Registrar of the Supreme Court, but they provide helpful guidance.
In Wanson, Registrar Outerbridge contrasted full indemnity costs to special costs, determining that when assessing full indemnity costs, “the question is subjective: examining the bills of the solicitor in this matter, are the charges reasonable in the circumstances?” (para. 14). Justice Gibb-Carsley repeated this phrase in Mah Estate v. Lawrence, 2023 BCSC 1256, at para. 17 [Mah Estate] (an estate case, but one involving indemnity costs under an agreement).
In Mah Estate, Gibb-Carsley J. emphasized that s. 71 of the LPA (or an analysis akin to it) “does not require mathematical precision … instead, the assessor is entitled to employ a global approach to reach a ‘fair fee’ in the circumstances” and that “the costs awarded on a full indemnity basis must ultimately be ‘fair, reasonable and proportionate’” (para. 18).
In their written submissions, both parties agreed that it is appropriate to follow the approach Donegan J. adopted in Hobbs v. Warner, that is, that I should apply the s. 71(4) LPA factors when reviewing the bills on which the respondents’ full indemnity costs are based.
Section 71(4) of the LPA provides:
71 (4) At a review of a lawyer’s bill, the registrar must consider all of the circumstances, including
(a) the complexity, difficulty or novelty of the issues involved,
(b) the skill, specialized knowledge and responsibility required of the lawyer,
(c) the lawyer’s character and standing in the profession,
(d) the amount involved,
(e) the time reasonably spent,
(f) if there has been an agreement that sets a fee rate that is based on an amount per unit of time spent by the lawyer, whether the rate was reasonable,
(g) the importance of the matter to the client whose bill is being reviewed, and
(h) the result obtained.
