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Ottawa, 15 March 1993
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Taxation Order CRTC : 1993-3
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In Re: Competition in the Provision of Public Long Distance Voice Telephone Services and Related Resale and Sharing Issues - Telecom Decision CRTC 92-12. Telecom Costs Order CRTC 91-4 and Telecom Costs Order CRTC 92-4
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Philippa Lawson, for the National Anti-Poverty Organization and Rural Dignity of Canada (NAPO/RDC)
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Bernard A. Courtois, for Bell Canada (Bell).
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Ralph A. Davis, for British Columbia Telephone Company (B.C. Tel).
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D.R. Tarrant, for Newfoundland Telephone Company Limited (Newfoundland Tel).
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William G. McMurray, for Unitel Communications Inc. (Unitel).
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No one for B.C. Rail Telecommunications and Lightel Inc. (BCRL).
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No one for The Island Telephone Company Limited.
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No one for Maritime Telegraph Telephone Company, Limited.
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No one for The New Brunswick Telephone Company, Limited.
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TAXATION OF COSTS OF NAPO/RDC
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Taxing Officer: Lorne Abugov
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This order constitutes the taxation of costs awarded to NAPO/RDC in the case of Competition in the Provision of Public Long Distance Voice Telephone Services and Related Resale and Sharing Issues, Telecom Decision CRTC 92-12, 12 June 1992 (Decision 92-12).
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Interim costs were awarded to NAPO/RDC by Telecom Costs Order CRTC 91-4, 22 April 1991 (Costs Order 91-4), in accordance with subsection 45(1) of the CRTC Telecommunications Rules of Procedure (the Rules). In that order, the Commission limited NAPO/RDC's award of interim costs to disbursements, other than those relating to fees, incurred in connection with its intervention in the above-noted matter. NAPO/RDC was awarded a maximum of $56,775 for the purpose of obtaining transcripts of the central hearing and a maximum of $8,625 for other disbursements. Costs Order 91-4 provided that 60% of the costs awarded were payable by the applicants to the main proceeding, with the remaining 40% payable by the respondent telephone companies. Unitel and BCRL were directed to contribute to their 60% share, and the respondent telephone companies were directed to contribute to their 40% share, in proportion to their operating revenues from telecommunications activities.
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Final costs were awarded to NAPO/RDC by Telecom Costs Order CRTC 92-4, 30 June 1992 (Costs Order-92-4), in accordance with subsection 44(1) of the Rules. Costs were to be paid to NAPO/RDC by the applicants and respondents to the main proceeding, in the same proportions as set out in Costs Order 91-4.
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NAPO/RDC submitted a Bill of Costs in the amount of $179,280.73, consisting of $138,927.73 in counsel fees, $1,123.50 in consultant fees and $39,229.50 in disbursements. Of that latter amount, $31,801.80 had already been billed by NAPO/RDC under the terms of Costs Order 91-4, leaving an amount of S147,478.93 in fees and disbursements outstanding.
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Written comments with respect to the costs claimed by NAPO/RDC were submitted by Bell, B.C. Tel, Newfoundland Tel and Unitel.
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In the course of the taxation, the following issues were raised and discussed:
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Counsel Fees
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a) Senior Counsel
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None of the parties submitting comments objected to the amount of time claimed for preparation and attendance at the central hearing by Mr. Watkins, senior counsel for NAPO/RDC. All of the parties, however, questioned the quantum of the per diem fee of $1350 requested by senior counsel for attendance at the hearing, and Unitel objected to the hourly fee of $190 claimed by Mr. Watkins for preparation.
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With regard to the quantum of the attendance fee, Bell pointed out that NAPO/RDC senior counsel was seeking a per diem rate that represented an increase of 28.5% over the amount of $1,050 awarded to Mr. Gathercole, senior counsel for the B.C. Old Age Pensioners' Organization et al. (BCOAPO et al.) in Taxation Order 1990-1. By contrast, Bell noted that the preparation rate claimed by NAPO/RDC senior counsel of $190 per hour amounted to a 5.5% increase over the rate of $180 per hour allowed to BCOAPO et al. senior counsel in Taxation Order 1990-1. Bell questioned the 28.5% increase on several grounds, notably that BCOAPO et al. senior counsel was called to the Bar nine years prior to Mr. Watkins, and possessed more direct experience in telecommunications proceedings before the Commission. In addition, Bell referred to Taxation Order 1989-6 as support for the proposition that, absent any compelling reason for a disproportionately larger increase in the rates proposed for attendance time than for preparation time, any adjustment for inflation and additional experience should be approximately the same for attendance and for preparation. Bell also cited Taxation Order 1989-3 as a basis for arguing that, where the rates for attendance and preparation are not the same, one would expect the rate for preparation time to be higher than that for attendance. Bell concluded that an attendance rate of $1,110, representing a 5.5% increase over the attendance rate awarded to BCOAPO et al. senior counsel in Taxation Order 1990-1, would constitute an appropriate per diem fee for Mr. Watkins. Both B.C. Tel and Newfoundland Tel contrasted the per diem claimed by NAPO/RDC with the amount of $1,125 awarded to Mr. Gathercole by the Taxing Officer in Taxation Order 1991-1.
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B.C. Tel argued that Mr. Watkins' per diem attendance rate should not exceed $1,125, while Newfoundland Tel suggested that the same limit plus an unspecified inflation adjustment would be appropriate.
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Unitel submitted that, taking Mr. Watkins' seniority at the Bar into account, an attendance rate of $1,050 would represent the upper range of a reasonable per diem. Moreover, according to Unitel, the hourly preparation rate of $180 allowed for BCOAPO et al. senior counsel in Taxation Order 1990-1 was an appropriate amount to award to Mr. Watkins in the present case.
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In its reply, NAPO/RDC stated that Mr. Watkins' per diem rate for attendance amounts to only 7.11 hours at $190 per hour. It argued that the rate is reasonable since 1) a typical hearing day for NAPO/RDC counsel lasted 10 to 12 hours and 2), owing to NAPO/RDC's limited resources, much of Mr. Watkins' attendance time was also spent in preparation, reviewing transcripts and evidence, and preparing cross-examination.
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With respect to the preparation rate claimed by senior counsel, NAPO/RDC submitted that Mr. Watkins' requested rate of $190 per hour is well below his 1991 market rate of $275 per hour, notwithstanding his experience before the CRTC and the Alberta Public Utilities Board and his lengthy background of administrative law practice. NAPO/RDC also pointed out that, while called to the Bar in 1975, Mr. Watkins graduated from law school in 1967, worked for a five year period thereafter with the Law Reform Commission of Canada and headed the Commission's Administrative Law and Procedure Project that examined the procedures of Federal administrative agencies, including the CRTC.
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I note that all of the parties objecting to the counsel fees claimed by NAPO/RDC's senior counsel have based their comments on a comparison of rates awarded by the Taxing Officer to BCOAPO et al.'s senior counsel in either of Taxation Orders 1990-1 and 1991-1. As I indicated in Taxation Order 1989-3, the quantum of fees for counsel has in a number of instances been determined in relation to those allowed for other counsel (see, for example, Taxation Order 1987-3).
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As noted by several parties, Mr. Watkins has somewhat less seniority at the Bar and less direct CRTC telecommunications proceeding experience than does Mr. Gathercole. However, Mr. Watkins has appeared in the past before the CRTC and the Alberta Public Utilities Board and possesses a lengthy background of administrative law practice, including a five year period with the Law Reform Commission of Canada prior to his call to the Bar, during which he examined the procedures of Federal administrative agencies, including the CRTC. I have concluded, based on these considerations, that the rates awarded to Mr. Watkins in this proceeding should be lower, but not significantly so, than the rates that I have awarded to Mr. Gathercole in Taxation Order 1993-2 ($205 per hour of preparation time; $1,260 per day of attendance time), also issued today.
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In my view, the amounts awarded to Mr. Gathercole in Taxation Order 1991-1 for attendance time ($1,125 per day) and preparation time ($190 per hour) represent a fair and reasonable benchmark against which to assess Mr. Watkins' claims in the present proceeding.
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While I am prepared to allow Mr. Watkins' claimed hourly rate of $190 for preparation time, I consider his claimed per diem rate of $1,350 for attendance time, representing a 20 % increase over the rate granted to Mr. Gathercole in Taxation Order 1991-1, to be excessive in the circumstances.
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Before determining an appropriate per diem attendance rate for Mr. Watkins, I would first comment upon NAPO/RDC's statement in its reply that a typical hearing day for its counsel lasted 10 to 12 hours. In this Taxation Order, I have based my calculations of per diem attendance rates on a seven hour day, representing the average amount of time that the hearing was in session on a normal sitting day. I have no doubt that counsel for NAPO/RDC, like counsel for many other parties, worked well beyond the close of the hearing day on many occasions during the proceeding in question. However, for taxation purposes, I regard most of such time as having been spent in preparation and not, as might be inferred from NAPO/RDC's reply comment, in attendance at the hearing.
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With respect to Mr. Watkins' per diem attendance rate, I have taken into account, amongst other factors, the nature of the proceeding that led to Decision 92-12. I have no difficulty in concluding, on the basis of the criteria I employed in Taxation Order 1989-3, that the long-distance competition proceeding is one in respect of which a higher rate for preparation time than for attendance time can be justified. This proceeding involved multiple interveners, a lengthy central hearing and related to matters that were complex and innovative and required detailed preparatory work.
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While I note, and am prepared to accept NAPO/RDC's statement that some of the time spent by senior counsel in attendance at the central hearing was actually spent in preparation, I am of the view that the length of the hearing and the sheer number of interveners that participated resulted inevitably in some periods of relative inactivity for attending counsel, as opposed to actual direct participation.
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In light of the foregoing, I have decided that it is appropriate to set a lower attendance rate than preparation rate for Mr. Watkins. However, in view of the unique and difficult nature of this proceeding, I have also decided that a modest additional increment for attendance time beyond the per diem amount of $1,125 awarded to Mr. Gathercole in Taxation Order 1991-1 is warranted. I will therefore allow Mr. Watkins a per diem attendance rate of $1,155.
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Accordingly, I have taxed the fees claimed by Mr. Watkins at 249.5 hours of preparation time at $190 per hour, totalling $47,405, and 21 days of attendance at the central hearing at a per diem rate of $1,155, totalling $24,255. The total combined fee awarded to Mr. Watkins is $71,660.00 (net of GST).
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b) Junior Counsel
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None of the parties that submitted comments objected to the amount of time claimed for attendance at the central hearing by Philippa Lawson, junior counsel for NAPO/RDC, but all such parties did question the time claimed by Ms. Lawson for preparation. In addition, Unitel objected to the quantum of the counsel fee requested, namely $90 per hour for both preparation and attendance time, and observed that Ms. Lawson did not claim a per diem rate for attendance.
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Unitel submitted that the number of hours of preparation time claimed by Ms. Lawson was excessive, both in its own right and when compared with the hours claimed by another intervener in this proceeding, BCOAPO et al. Unitel stated that NAPO/RDC's Bill of Costs reflected a 3.5 to 1 ratio of preparation time to attendance time for Ms. Lawson, greatly exceeding the general guideline employed in certain Taxation Orders of two days of preparation for each day of attendance at a hearing. In particular, Unitel noted that the time claimed by Ms. Lawson for preparing NAPO/RDC's final argument was almost equivalent to her claim for total attendance time at the hearing.
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In reply to Unitel's comments, NAPO/RDC furnished an informal market survey of 1991 billing rates for legal counsel in both Ottawa and Toronto. The Ottawa survey data was based upon the 1991 Financial Results compiled by the Ottawa Chapter of the Association of Legal Administrators, while the Toronto data was based upon the 1991 Price Waterhouse Law Firm Omnibus survey. Relying upon the survey data, NAPO/RDC submitted that the $90 per hour rate claimed by Ms. Lawson was reasonable for an Ottawa lawyer in her first year of call to the Bar.
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NAPO\RDC stated that Ms. Lawson chose not to claim a per diem rate for attendance at the central hearing since her attendance was extremely sporadic (usually a few hours at a time when topics of interest to NAPO/RDC were being considered) and much of her time in attendance was also preparation time.
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Finally, NAPO/RDC noted that in Taxation Order 89-2 (at page 3), the Taxing Officer stated, with respect to the proper ratio of preparation time to attendance time, that the ratio of two days preparation for each day of hearing attendance was merely a guideline and " ... slavish adherence to it in all circumstances would be neither realistic nor appropriate."
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All of the parties submitting comments objected to a claim by Ms. Lawson of 13.7 hours for preparation of NAPO/RDC's interim cost application, its reply therein and its interim Bills of Cost. Bell objected to paying for the time spent which it regarded as akin to time spent by counsel preparing a client's bill, which is not normally chargeable time.
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NAPO/RDC replied that, of the disputed 13.7 hours, 10.9 hours were spent drafting the interim cost application and reply, and researching and preparing argument on the Commission's jurisdiction to award interim costs. NAPO/RDC disputed Bell's view that this time was akin to time spent billing clients, observing rather that the interim cost application is a formal element of CRTC procedure and was critical to NAPO/RDC's participation in the proceeding.
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According to NAPO/RDC, the balance of 2.8 hours was devoted to reviewing interim Bills of Costs and corresponding with the parties. NAPO/RDC stated that no time has been claimed for the actual preparation of the interim Bilis of Costs, nor has a claim been made regarding the time spent on the final Bill of Costs.
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Turning first to the quantum of fees claimed by NAPO/RDC junior counsel, I note that she was newly called to the Bar when she participated in the proceeding under consideration, and that the central hearing marked her first in attendance before the Commission. In setting an appropriate rate for Ms. Lawson, I have reviewed the rates awarded to junior counsel in their first year of call to the Bar in previous Taxation Orders (see for example Taxation Order 1990-1). I find that, taking inflation into account, the hourly rate of $90 claimed in this instance by Ms. Lawson is consistent with the rates awarded for preparation time to other junior counsel with similar experience. I note that this rate is also consistent with the average 1991 hourly rate of $94 billed by Ottawa lawyers with two or less years of practice, as set out in the market survey filed in reply by NAPO/RDC. I therefore find that $90 per hour is warranted for preparation.
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Prior to setting an appropriate attendance rate for junior counsel, I will address a related point that was raised in the pleadings. In its comments, Unitel noted that NAPO/RDC employed an hourly rate for attendance rather than a per diem rate. I consider the use of a per diem attendance rate to be preferable for purposes of taxation to the hourly attendance rate claimed in this case by NAPO/RDC. In almost every instance in the past, the Commission's Taxing Officers have awarded fees for attendance on a per diem as opposed to an hourly rate basis. As such, both parties and Taxing Officers are more readily able to refer to and rely upon the existing body of Commission Taxation Orders when fees for attendance in a proceeding are claimed on a per diem basis.
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Moreover, I do not find NAPO/RDC's arguments in support of the use of an hourly attendance rate to be persuasive. Attendance at a hearing for periods of less than one full hearing day can be accounted for on a per diem basis through the use of appropriate shorter increments that accurately reflect the time in attendance. Time spent in attendance at a public hearing while the hearing is in session has traditionally been viewed, for taxation purposes, as attendance time regardless of whether the party in attendance may also be engaged in activities such as preparing cross-examination or reviewing transcripts.
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In this Taxation Order, I will set Ms. Lawson's attendance rate on a per diem basis. In future taxations, I will expect counsel to submit claims for attendance rates on a per diem as opposed to an hourly basis.
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For the reasons set out earlier in this Taxation Order, I have allowed a lower rate for Ms. Lawson's attendance time than for her preparation time. I have also taken into account attendance rates allowed by other Taxing Officers, adjusted for inflation, for junior counsel with similar experience to that of Ms. Lawson. Finally, as I did in the case of Mr. Watkins, I have incorporated into the attendance rate an additional increment owing to the unique and difficult nature of this proceeding. I consider that $560 per day is warranted for attendance and, accordingly, I will allow 20 days of attendance at $560 per day, totalling $11,200 (net of GST).
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Turning to the matter of hours of preparation time claimed by NAPO/RDC's junior counsel, I will deal first with the claim of 13.7 hours spent generally preparing the intervener's interim costs application and reply therein, and reviewing its interim Bills of Cost.
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I have no difficulty in allowing NAPO/RDC costs associated with the 10.9 hours of time claimed by Ms. Lawson for the preparation of the interim cost application and the reply. I consider the time claimed to be reasonable in view of the legal research necessary to address the issue of the extent of the Commission's jurisdiction to award interim costs. The associated costs were necessarily incurred in connection with NAPO/RDC's intervention, and cannot reasonably be regarded as being akin to time spent billing a client.
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With respect to the remaining claim of 2.8 hours of preparation time spent by Ms. Lawson in reviewing interim Bills of Cost and corresponding with the parties, I would note the following paragraph in Taxation Order 1985-5, at page 7:
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"This appears to be the first occasion in which an intervener in a proceeding before the
Commission has requested costs related to the taxation process. However, I do not read the
CRTC Telecommunications Rules of Procedure or the award of costs to WID et al. in
this proceeding as precluding me from allowing costs lncurred ln the taxation process. The
costs requested by WID et al. were reasonably and necessarily incurred in connection with its
interventinn. I wnuld be reluctant to allow the requested costs if the courts never allowed costs
associated with taxations. In this regard, I note that in Smerchanski v. Minister
of National Revenue (1977), 20 N.R. 257, on an application for review the Federal Court of
Appeal allowed costs for preparation for taxation on the basis of paragraph 2(1)(c) of Tariff B of
the Federal Court Rules."
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I note that Tariff B of the Federal Court Rules has undergone revision since the Smerchanski case and now provides, in paragraph 1(1)(c), that the Court may allow costs for the services of counsel for taxing costs and all matters incidental thereto. I note also the recent Federal Court of Appeal taxation, Canada (Minister of Employment and Immigration) v. Chan, (No. 91-A-3828, judgment rendered 3 November 1992), in which the Taxing Officer allowed costs relating to the recovery of costs in a solicitor-client bill.
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I agree with the approach taken by the Taxing Officer in Taxation Order 1985-5 and, accordingly, I will allow NAPO/RDC's claim of 2.8 hours of preparation time for review of interim Bills of Cost and corresponding with the parties.
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In its final Bill of Costs, NAPO/RDC has claimed 473.3 hours of preparation time spent by its junior counsel, including 119.2 hours claimed for preparation of final argument. By adding to these amounts the preparation time claimed by senior counsel, Mr. Watkins, which claim was not contested by any parties, NAPO/RDC claimed a total of 722.8 hours of preparation time during this proceeding.
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I note, for comparative purposes, that BCOAPO et al. has claimed total preparation time of 283.7 hours, of which 126.5 hours has been claimed by its junior counsel, Ms. Braha and Mr. Doherty.
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It is reasonable to assume, and I am prepared to do so, that NAPO/RDC junior counsel would expend more time in preparation during this complex proceeding, her first appearing before the Commission, than would junior counsel for BCOAPO et al., both of whom are more senior than Ms Lawson. Unlike Ms. Lawson, Ms. Braha has participated in previous Commission proceedings. I have also noted the following statement of the Taxing Officer in the Chan case, referred to earlier, at page 17, with which I would agree:
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"Indemnification of costs between parties is not intended to fund the education of solicitors.
However, part of the professional service to the client necessarily involves review or awareness
of applicable law to ensure the best possible, but not excessive or needless, representation of
the client."
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Taking these and other considerations into account, I am nevertheless unable to conclude in the circumstances that the full amount of the preparation time claimed by NAPO/RDC's junior counsel has been reasonably and necessarily incurred in connection with this proceeding and is, therefore, warranted. Accordingly, I have reduced the total preparation hours claimed by Ms. Lawson to 350 hours. I have taxed her preparation time at $90 per hour for 350 hours, totalling $31,500 (net of GST).
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I note that GST, at a rate of 7%, has been included in NAPO/RDC's Bill of Costs in respect of both fees and disbursements. I sought and obtained confirmation that, unlike the other disbursements claimed, the claim of $1,417.06 for photocopies does not include, and is not subject to, GST. It is my understanding that a 50% GST rebate is available under the circumstances of this case. Accordingly, I have allowed costs relating to GST at a rate of 3.5%, as distinct from the rate of 7% claimed by NAPO/RDC, in keeping with the principle that allowed costs should not exceed the net expenses incurred.
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Costs as Taxed
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I hereby tax the fees and disbursements (inclusive of GST at a rate of 3.5%) as follows:
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Fees
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Counsel
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Mr. Watkins $ 74,168.10
Ms. Lawson $ 44,194.50
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Consultant
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Mr. Todd $ 1.086.75
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Total Fees $119,449.35
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Disbursements
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Air Travel 5,200.18
Accommodation 1,083.36
Meals 68.45
Taxi and Parking 1,192.18
Telephone and Fax 1,769.10
Photocopies and Binding 1,587.55
Courier and Postage 856.11
Transcripts 26,214.99
Miscellaneous 20.70
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Total Disbursements $ 37,992.62
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Total Fees and
Disbursements $157,441.97
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Less:
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Costs Already Recovered $ 31,801.80
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Total Fees and
Disbursements Owing $125,640.17
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As noted above, this amount is to be paid to NAPO/RDC by the applicants and respondents to the main proceeding in the same proportions as set out in Costs Order 91-4.
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Lorne Abugov
Senior Counsel
Canadian Radio-television and Telecommunications Commission
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