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Ottawa, 15 May 1989
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Taxation Order CRTC: 1989-4
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In Re: British Columbia Telephone Company - Revenue Requirement Proceeding for the Years 1988 and 1989
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Joan E. Vance, for the Social Planning and Research Council of British Columbia et al (SPARC)Peter W. Butler, for British Columbia Telephone Company (B.C. Tel)
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TAXATION OF COSTS OF SPARC
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Taxing Officer: Sheridan Scott
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This order constitutes the taxation of costs awarded to SPARC in the case of British Columbia Telephone Company - Revenue Requirement Proceeding for the Years 1988 and 1989, Telecom Decision CRTC 88-21, dated 19 December 1988. Costs were awarded to SPARC by Telecom Costs Order CRTC 89-1 (Costs Order 89-1), dated 5 January 1989, in accordance with subsection 44(1) of the CRTC Telecommunications Rules of Procedure. In that order, the Commission determined that SPARC was entitled to 60% of its costs to be paid by B.C. Tel.
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SPARC submitted a Bill of Costs in the amount of $27,085.02, consisting of $23,400.00 in counsel fees, $3,125.00 in consultant fees and $560.02 in disbursements. In the course of the taxation, which proceeded by way of written submissions, the following issues were raised and discussed.
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Counsel Fees
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B.C. Tel objected both to the rate requested by counsel for SPARC and to the number of hours claimed for preparation time. B.C. Tel pointed out that SPARC was asking for $100.00 per hour for preparation and $600.00 per day for attendance, representing increases of 17.6% and 9% respectively over the amounts awarded to the same counsel in Taxation Orders 1988-4 and 1988-6. B.C. Tel suggested that the increase for both preparation and attendance should be no more than 9%.
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In addition, B.C. Tel pointed out that the proposed rate structure was inconsistent with that applied by the Commission to the Consumers' Association of Canada (CAC). The company pointed out that the CAC charges less for preparation time than for hearing time, and that this practice has been followed by the Commission in the past.
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B.C. Tel also submitted that the 153 hours spent by counsel on preparation seemed excessive given the results and given the assistance provided by the consultant, Mr. Peter Anderson. B.C. Tel suggested 130 hours instead.
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In reply, SPARC argued that its counsel fees should be increased to reflect both inflation and experience acquired by counsel in prior hearings. SPARC submitted further that counsel rates should increase by a greater percentage during the first years of a lawyer's practice, to recognize the acquisition of skills. In support of this proposition, SPARC cited the practice in Vancouver law firms, where rates for lawyers level off after five years in recognition of the fact that the learning curve is not as steep as that during the earlier years. As for the proposed rate structure, SPARC argued that it is entirely appropriate to charge preparation time at a higher rate, since this time is expended totally in preparation while attendance at the hearing sometimes involves merely being present listening to other cross-examination rather than actual direct participation in the case.
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Finally, SPARC argued that the ratio of preparation time claimed by SPARC to the amount of attendance time was substantially less than the ratio of two to one that the Commission has used as a rule of thumb in previous taxation orders. This was due in part, submitted SPARC, to the participation of Mr. Anderson in the preparation of interrogatories.
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In establishing the appropriate rate of compensation, I have taken as my starting point Taxation Orders 1988-4 and 1988-6. In those orders, the Taxing Officer reviewed the qualifications of SPARC's counsel, Ms. Vance. After noting the number of years since her call to the Bar as well as her litigation and regulatory experience, the Taxing Officer set rates of $85.00 per hour for preparation and $550.00 per day for attendance. In determining the appropriate rates for her participation in this proceeding, I have considered whether an adjustment for inflation and for any experience Ms. Vance has acquired since the last taxation order is warranted.
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In her Bill of Costs, counsel for SPARC requested rates of $100.00 per hour for preparation and $600.00 per day for attendance. These amounts represent increases of 17.6% and 9% respectively over the rates approved one year ago in Taxation Orders 1988-4 and 1988-6. In my view, SPARC has advanced no compelling reason for increasing the rate for attendance more rapidly than the rate for preparation. Indeed, I consider that the arguments she has advanced relate equally to preparation and attendance and I have concluded that any upward adjustment to these amounts should reflect approximately the same percentage increase.
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With respect to the specific level of increase, I have concluded that 9% is overly generous for the following reasons. First, I do not find persuasive the argument that counsel fees should increase at a more dramatic rate during the first several years of legal practice. The Commission has never taken this approach in the past, and I do not consider that the apparent practice in Vancouver law firms should determine this issue. Furthermore, I note that other interveners who participated in this proceeding received an average increase of 4% in Taxation Order 1989-3 or no increase at all in the case of Taxation Order 1989-2. Finally, according to the consumer price index for Vancouver published by Statistics Canada, the inflation rate for 1988 was 4.1%.
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In arriving at an appropriate rate, however, I must also take into consideration the concerns raised by B.C. Tel with respect to the appropriateness of charging more for preparation time than for attendance time. This issue was fully canvassed in Taxation Order 1989-3, in which the Taxing Officer concluded that, in his opinion,
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"...a taxing officer would be justified in allowing counsel a higher preparation rate than
attendance rate where, for example, the proceeding in question involved multiple interveners
and a lengthy public hearing and related to a subject matter sufficiently complex or innovative
as to warrant detailed preparatory work."
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I agree that, in the circumstances cited above from Taxation Order 1989-3, it is appropriate to tax preparation time at a higher rate than attendance time. I am also of the view that such circumstances are present in the current proceeding. With respect to the specific quantum, I have concluded, in light of the considerations outlined above, that Preparation time should be taxed at $90.00 per hour, representing an increase of approximately 6% over last year and $575.00 per day for attendance time, representing an increase of approximately 4.6% over last year.
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With respect to the number of hours of preparation to which this rate should be applied, I note that the 153 hours claimed by Ms. Vance are well within the Commission's established guideline that the ratio of preparation time to attendance time should not exceed 2:1. At the same time, I am aware of the participation of Mr. Anderson, which ostensibly reduced the amount of preparatory work that Ms. Vance had to carry out. I have also reviewed the amount of transcript time devoted to cross-examination by Ms. Vance and by the interveners whose costs were taxed in Taxation Orders 1989-2 and 1989-3. I note that both of these interveners engaged in cross-examination for twice as long as Ms. Vance, but, at the same time, they claimed similar preparation time. While this difference in time may be due, in part to the fact that some of the areas for which Ms. Vance had prepared cross-examination were covered by these other interveners, I cannot conclude, on this basis alone, that SPARC has justified the same amount of preparation time as these other interveners. In these circumstances, I have concluded that the amount of time claimed for preparation is excessive and have reduced the number of hours from 153 to 135. Accordingly, I have taxed 135 hours at $90 an hour and 13.5 days at $575 per day for a total of $19,912.50.
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Consultant Fee
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B.C. Tel objected to the quantum of the fee to be paid to SPARC's consultant, Mr. Peter Anderson. First, B.C. Tel was of the view that the rate for preparation time should be less than the rate for hearing time. In addition, B.C. Tel submitted that the rate for Mr. Anderson represented a significant increase over the rates allowed in Taxation Order 1985-4 for a legal assistant and articling student. B.C. Tel was of the view that a 9% increase since 1985 would be appropriate.
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In reply, SPARC pointed out that Mr. Anderson's rates were simply not comparable to those of an articling student and a legal assistant, particularly in light of Mr. Anderson's experience in telecommunications regulation, his appearance before the CRTC with respect to several matters, his experience as a professor of Communications Law at Simon Fraser University, and his technical background and knowledge.
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I do not consider that the experience of Mr. Anderson is at all comparable to that of an articling student and a legal assistant who apparently were involved in a telecommunications rate case for the first time. Moreover, B.C. Tel offers no justification for its proposed increase of 9% to account for inflation and added experience over a five year period.
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I agree with the taxing officer in Taxation Order 1989-3 that $250 per day does not exceed the fair market value of the services rendered by Mr. Anderson and, indeed, as suggested by SPARC, this amount appears relatively modest. Accordingly, I conclude that the rate paid to Mr. Anderson is reasonable and have taxed his 12.5 days at a rate of $250.00 per day for a total of $3,125.00.
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Disbursements
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In its Bill of Costs, SPARC included a $34.80 payment to the Sheraton Plaza Hotel, apparently for meals. B.C. Tel objected to this expense on the grounds that it did not think it appropriate to pay for meals of local counsel. In addition, B.C. Tel took exception to a payment of $18.00 to the Insurance Corporation of British Columbia to upgrade temporarily Ms. Vance's car insurance from rate class 01 (pleasure) to class 02 (pleasure-work). B.C. Tel also questioned SPARC's claim for mileage costs of $10.92 on the grounds that it did not think it appropriate to pay the personal transportation costs of local counsel. Finally, B.C. Tel objected to a claim of $18.25 for parking, again on the grounds that it did not normally pay such charges. B.C. Tel indicated that it has not always objected to paying small amounts claimed by local counsel for parking or taxi cab fares where the claim related to a single or a small number of incidents but was unwilling to disregard SPARC's broader claim for transportation costs.
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B.C. Tel was also critical of SPARC's affidavit of disbursements since it provided no evidence that counsel put in all the time that she said she did or that SPARC actually paid $3,125.00 to its consultant.
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In reply, Ms. Vance argued that the $34.80 payment to the Sheraton Plaza related to a working lunch and therefore was an appropriate expense. With respect to the payment associated with upgrading her car insurance, Ms. Vance pointed out that the location of the hearing was not close to her residence or office nor was it on any direct bus line from either her home or office. Moreover, she argued that she took home a large volume of materials almost every day of the hearing and considered that it was more expedient and inexpensive to transport such materials in her own car, rather than have them sent by courier each day, an expense to which she did not think B.C. Tel would object. As for the mileage claim, Ms. Vance explained that this represented two trips made to the University of British Columbia to get photocopied materials available only at a departmental library. She pointed out that the amount was substantially less than the cost of having librarians photocopy the articles and courier them to her office. With respect to all but $7.00 of the parking charges, SPARC noted that these were incurred for parking at the University library and for parking during evening hours when Ms. Vance worked at her office. Since she could not remember the particulars associated with the remaining $7.00, she withdrew this portion of her costs.
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As for the affidavit of disbursements filed by SPARC, Ms. Vance pointed out that such an affidavit had been used on several occasions in the past and that there had been no objection by B.C. Tel. She expressed her willingness to swear an affidavit to attest to the time spent preparing for or attending at the hearing, if it was required.
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In determining whether the costs claimed for a working lunch should be allowed, I have considered the Commission's practice with respect to taxing the costs associated with travel time spent preparing for a hearing. I note that in Taxation Order 1985-3, the Taxing Officer found no reason for distinguishing between time spent preparing while travelling and other preparation time spent at one's place of work or elsewhere. Similarly, I can see no reason for not allowing costs for time spent on preparation during a luncheon meeting. At the same time, I note that SPARC has not indicated the amount of time devoted to preparation during the meal. I am also mindful of the fact that it is difficult to devote an entire meal time to work. However, the amount claimed is significantly less than the hourly rate that I have found acceptable for preparation and, accordingly, I find this payment to be an acceptable proxy for the likely amount of time spent in preparation during the meal time.
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I turn now to the issue of the costs associated with the upgrading of Ms. Vance's car insurance in order to drive to and from the hearing. In commenting on SPARC's Bill of Costs, B.C. Tel noted that it had not objected in the past to paying the occasional taxi cab fare claimed by local counsel and, indeed, did not object to such payment in the case of cab fares claimed by another local counsel in conjunction with its costs for the current proceeding. I consider that it would not be unreasonable for B.C. Tel to cover the costs of any necessary taxi rides from SPARC's office to the location of the hearing and I am also of the view that several trips by car were likely required during the course of the proceeding. Since the amount claimed for upgrading Ms. Vance's car insurance is certainly less than the total of 4 or 5 such trips, I do not consider this cost to be unreasonable. This reasoning applies as well to the $10.50 which represent parking charges incurred while commuting between the hearing location and the office.
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Similarly with respect to the claim for mileage and for parking charges, in the amount of $11.67, B.C. Tel did not object to the costs of sending documents by courier. I accept SPARC's assertion that the claim for mileage was substantially less than the cost of having librarians photocopy the articles and courier them to SPARC's office. Finally with respect to the form of the affidavit of disbursements, I note as did the Taxation Officer in Taxation Order 1989-3, that a modification to the wording used by SPARC should address the concerns raised by B.C. Tel.
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Appeal of Telecom Costs Order CRTC 89-1
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I note that on 12 April 1989, SPARC requested that the Commission review and vary Costs Order 89-1, to allow SPARC all of its costs of participation in the B.C. Tel Revenue Requirement Proceeding for the Years 1988 and 1989. I have decided to issue this Taxation Order before the Commission has disposed of SPARC's request, in order that SPARC may receive immediately 60% of its costs, to which it is entitled in accordance with Costs Order 89-1. Should the Commission determine that SPARC is entitled to more than 60% of its costs, a further taxation order will be issued.
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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
Counsel $19, 912.50
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Consultant $ 3,125.00
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Disbursements
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Postage 2.03
Telephone 28.77
Photocopies 330.50
Courrier 100.75
Parking 11.25
Miscellaneous Expenses 79.72
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$ 553.02
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Total Fees and Disbursements $23,588.52
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Costs to be paid by B.C. Tel
(60% of total) $14,153.11
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Sheridan Scott
Counsel
Canadian Radio-Television and Telecommunications Commission
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