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Ottawa, 19 January 1987
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Taxation Order CRTC: 1987-1
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In re: Bell Canada - Review of Revenue Requirements for the years 1985, 1986 and 1987, Telecom Decision CRTC 86-17, 14 October 1986 and Telecom Costs Order CRTC 86-4
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Andrew Roman, for National Anti-Poverty Organization (NAPO)
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E.E. Saunders, Q.C., for Bell Canada (Bell)
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TAXATION OF COSTS
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Taxing Officer: Sheridan Scott
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This order constitutes the taxation of costs awarded to NAPO in the case of Bell Canada - Review of Revenue Requirements for the years 1985, 1986 and 1987, Telecom Decision CRTC 86-17, dated 14 October 1986. Costs were awarded to NAPO in Telecom Costs Order CRTC 86-4 (Costs Order 86-4), in accordance with section 44 of the CRTC Telecommunications Rules of Procedure.
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In response to Costs Order 86-4, NAPO submitted a Bill of Costs in the amount of $104,800.06, consisting of $58,025 in fees and $46,775.06 in disbursements. In the course of the taxation, which proceeded by way of written submissions, the following issues were raised and discussed by the parties.
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1. Counsel fees and travel expenses
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Bell did not object to the time claimed for preparation and attendance of counsel at the hearing into Bell's revenue requirements for the years 1985, 1986 and 1987. However, Bell found the relationship between counsel, NAPO and the Public Interest Advocacy Centre (PIAC) unclear and submitted that an elaboration should be provided with a view to shedding light on whether the costs claimed are consistent with the principle of indemnification. In this connection, Bell pointed out that a "causally allocable costs" approach was adopted in Taxation Order 1980-1, based on the arrangement that existed at that time.
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Bell also noted that there was no explanation as to what the travel expenses for PIAC related to or who incurred them.
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In reply, NAPO submitted that according to the Supreme Court of Canada's judgment in Bell Canada v. Consumers' Association of Canada, [1986] 1 S.C.R. 190, the only issue is whether the costs claimed exceed those necessarily and reasonably incurred by the intervener in connection with the intervention.
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With respect to the travel expenses, NAPO replied that they were incurred by the two counsel acting for NAPO in connection with travel between Toronto and Ottawa and for travel between PIAC's office in Ottawa and the hearing room.
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I note that the Supreme Court of Canada gave the following guidance in its judgment cited above:
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"[The Commission] should ... be able to fix the expense which may be reasonably attributed to
a particular participation by a public interest intervener as being deemed to have been incurred,
whether or not as a result of the particular means by which the intervention has been financed
there has been any actual out-of-pocket expense" (page 208).
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In my view, this passage indicates that the Taxing Officer is not required to determine whether an intervener is represented by outside counsel, counsel on a first retainer basis or in-house counsel, as long as he or she adopts "a reasonable approach ... to what should be deemed to be the expenses incurred for the interventions".
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With respect to the relationship between counsel, NAPO and PIAC, I am satisfied that senior counsel provided services to NAPO with respect to the 1986 hearing into Bell's revenue requirements for the years 1985, 1986 and 1987 and that he is entitled to have his costs for these services taxed pursuant to Costs Order 86-4. I note that Mr. Roman's costs have previously been taxed either on causally allocable basis, as in Taxation Order 1980-1 or on the basis of a "market rate" as in the taxation pursuant to Telecom Costs Order CRTC 82-6, described in a letter from the taxing officer to the British Columbia Public Interest Advocacy Centre dated 8 November 1982. In my view, it would be reasonable in the circumstances of the present case to tax the costs of Mr. Roman in the same manner as I have taxed the costs for CAC's outside counsel with respect to his participation in the same hearing. I have therefore decided that a market rate approach is reasonable and have concluded that $150 per hour represents a fair rate for someone who was called to the bar in 1973.
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I note that NAPO has claimed this hourly rate with respect to those hours during which Mr. Roman was travelling between his place of residence in Toronto to the hearing room in Hull. On 10 December 1986, I invited NAPO to indicate the percentage of this travel time that was used for preparation for the hearing. NAPO replied that, in their view, all such time should be taxed since Mr. Roman was out of the office during the entire period. The exact percentage of the travel time that was devoted to preparation was not provided.
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In my view, the hourly rate of $150 should be applied to travel time, only to the extent the time is used for preparation. In the absence of a specific breakdown of the number of hours, I have taxed the hours spent travelling in the same proportion as that applied in Taxation Order 1985-3 dated 16 September 1985, where counsel was allowed $250 per day travel time and $700 per day preparation time.
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Accordingly, for senior counsel, the 258.5 hours claimed for attendance and preparation are taxed at $150 per hour totalling $38,775 and the 30 hours claimed for travelling are taxed at 36% of this amount, namely $54 per hour. totalling $1720.
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For junior counsel, the 29.5 days claimed for preparation and attendance are taxed at $500 per day for a total of $14,750.
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2. Fees for witnesses
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Bell objected to the amount claimed in respect of the participation of Drs. Booth and Berkowitz, namely $800 per day for preparation and $1200 per day for testifying. Bell noted that this amount was higher than that taxed for CAC's witness in Taxation Order 1985-3 and that Dr. Booth had considerably less experience than Dr. Gould. In addition, Bell found that the number of days claimed by NAPO were high, in comparison with that claimed by CAC in respect of Dr. Gould's participation in this hearing.
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In reply, NAPO submitted that the witnesses were in great demand, that quality as well as experience was a relevant factor and that the fee claimed for its witnesses represented the fair market value of the services secured. In addition, NAPO stated that the witnesses had actually spent the number of days claimed and suggested that more work and preparation was involved than that carried out by Dr. Gould. NAPO also observed that the witnesses spent considerable time assisting counsel in the preparation of cross-examination.
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In previous cases, taxing officers have looked to the experience and ability of expert witnesses, in order to determine an appropriate rate for their service and, in the case of counsel fees, have made comparisons on the basis of the number of years that counsel has been called to the bar as well as the complexity of the issues discussed. In addition, previous taxations with respect to an intervener are used as a starting point for subsequent taxations with respect to the same intervener.
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In the case of Drs. Booth and Berkowitz, neither has been the subject of a taxation order by the Commission. However, the costs for Dr. Gould, who has testified several times on behalf of the CAC, serve as useful benchmark, particularly in light of the fact that his testimony before the Commission has related to the same area explored by Drs. Booth and Berkowitz, namely the computation of the cost of equity capital.
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While NAPO has suggested that the fees claimed for Drs. Booth and Berkowitz can be justified in light of the demand of their services, I can see no evidence that they are in much greater demand than Dr. Gould or that they have much greater experience.
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Indeed, I understand from pages 1-2 of their evidence, contained in NAPO exhibit 7 and introduced at the hearing into Bell's revenue requirements for the years 1985, 1986 and 1987, that Dr. Booth has previously appeared as an expert witness only once, before the Ontario Securities Commission, while Dr. Berkowitz has appeared as an expert on three occasions. I also note the significant number of publications contained in Dr. Booth's résumé, the fact that he has prepared evidence on the cost of capital for presentation at unspecified regulatory hearings, and Dr. Bertkowitz' activities as a consultant; however, I cannot conclude that there is evidence of any greater demand for the services of Drs. Booth or Berkowitz than for Dr. Gould who, according to his evidence in CAC Exhibit 11, has appeared before the Commission on at least three occasions and before other regulatory bodies in the United States and Canada on at least eight other occasions. In addition, he has to his name a number of publications in refereed journals and has been employed as a consultant in a number of public utility rate cases. I also note that Dr. Gould has 11 years of experience following his doctorate while Dr. Booth has 8 and Dr. Berkowitz has 10.
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At the same time, I accept NAPO's point that the number of topics examined by Dr. Gould in his memorandum was more limited than the number examined by Drs. Booth and Berkowitz; in my view, the lengthier memorandum submitted by NAPO's witnesses indicates a greater time commitment as well as the need to call on a broader knowledge base.
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On the basis of all of these considerations, I have concluded that the appropriate fee for Drs. Booth and Berkowitz is the same as that fixed for Dr. Gould in Taxation Order 1986-6 issued with respect to CAC's participation in the same hearing; namely $750 for preparation and attendance. With respect to the number of days, I am satisfied that the memorandum and testimony of Drs. Booth and Berkowitz justify the time claimed. Accordingly, I will allow 48 days at $750 a day for a total of $36,000.
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With respect to other disbursements, I note that the total amount claimed for courier services should be $157.10 and not $308.85, as claimed.
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Bell did not object to any other disbursements.
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Costs as taxed
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I hereby tax the fees and disbursements as follows:
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Fees:
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Senior Counsel $ 40,495.00
Junior Counsel 14,750.00
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Disbursements:
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Accommodation and meals,
senior counsel 1,320.00
Mr. Berkowitz & Associates
Fees 36,000.00
Disbursement 1,653.54
Research assistance 500.00
Telephone 185.44
Photocopying 2,746.88
Travel 1,260.35
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Courier services 157.10
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Total fees and disbursements 99,068.31
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Sheridan Scott
Legal Counsel
Canadian Radio-television and Telecommunications Commission
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