Judge orders costs in lawyer-versus-lawyer dispute

If a partner at a law firm successfully represents his own firm, will his costs be evaluated as if he were counsel for the firm or a self-represented litigant?

That was part of the question in a recent cost endorsement by an Ontario Superior Court judge who decided the successful lawyer, James Herbert of Chappell Bushell Stewart LLP, will receive costs as if he were counsel for his own law firm.

Justice Heather McGee ordered costs against Peter Cozzi, another Toronto lawyer, after finding that he brought “unnecessary, unfounded and potentially damaging allegations” against Chappell Partners LLP.

Cozzi’s lawyer Steven Benmor had argued that the hourly rate for Herbert, who is a partner at Chappell Bushell Stewart, should be assessed as if he were a self-represented litigant and not counsel for the law firm. The court rejected that argument.

“The applicant did not bring this motion against Mr. Herbert in his personal capacity. Mr. Cozzi served a motion on CP per Rule 14 (3) seeking an order to remove or extinguish a collateral mortgage secured by CP as security for fees during an active retainer. CP answered through counsel — the counsel who had carriage of the file,” McGee said.

Benmor says Herbert appeared in court not as counsel for Chappell Partners but as a member of it. “In this case, the judge basically said that even though the party was Chappell Bushell Stewart and even though James Herbert appeared not as the lawyer for Chappell Bushell but as a member of the firm, he should still get his costs paid based on what he would have charged the firm if he were the lawyer to the firm,” Benmor says.

“In effect, James is the firm and the firm is James. And more importantly, there is no bill from James to the firm,” Benmor adds.

How the value of litigants’ time in court is assessed is important as the majority of people in the family law system now appear on their own behalves, Benmor says.

“If I am a neurosurgeon and I make half a million dollars a year, do I get different costs than if I work at Tim Hortons and take an hour or two hours off work to go to family court?” he asks.

Herbert says he cannot comment on the case as it’s before the courts. Lee Akazaki, professional responsibility lawyer at Gilbertson Davis LLP, says what the court did in this case in fact makes sense.

“If the lawyer is representing his own law firm in court, that’s time he could [have spent] representing a paying client in court,” Akazaki says, adding there’s also precedent for compensating in-house counsel for their time in court even though they are on salary at the companies for which they work.

In this case, Cozzi is ordered to pay $5,518.50 for the one-hour motion, an amount McGee said is “reasonable” for a motion of such complexity.

Hebert and Chappell Partners LLP had represented Cozzi’s former common-law spouse in a family law matter. Cozzi sought an order to remove a collateral mortgage secured by Chappell Partners as security for fees during an active retainer with his former common-law spouse after suggesting the scheme contained a couple of “badges of fraud.”

“Unnecessary, unfounded and potentially damaging allegations were made against CP. None were demonstrated,” McGee said. “CP did nothing more nefarious than to earnestly and prudently provide legal services to Mr. Cozzi’s — a lawyer himself — former spouse.”

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