In the Court of Appeal’s 2021 decision in Charlesfort Developments Limited v. Ottawa (City), the Court had to determine whether the successful party was entitled to its expert fees. The amount being sought was for just over $478,000 with regarding to accounting fees.
The respondent took the position that the fees were not properly supported and were excessive. The Court of Appeal considered the case law surrounding the expert fees and applied the “reasonableness test” as also applied to the fees of counsel.
The Law Society of Ontario has a practice directive of Fair and Reasonable Fees and Disbursements. It states that what is fair and reasonable will depend on issues such as the time and effort spent on the matter, the difficulty of the matter, the importance of the matter to the client, whether special skill or service has been required and provided and the amount involved or the value of the subject matter, amongst other issues.
In Charlesfort Developments, the case law on expert fees was analyzed. It is interesting to note that “fees of experts are not however, subject to further reduction based on the distinction between substantial indemnity costs and partial indemnity costs” (3664902 Canada Inc. v. Hudson’s Bay Co. (c.o.b. Bay Department Stores), (2003)). Therefore, the responding party must only pay what the court views as reasonable. (Yip v. HSBC Holdings plc, 2018 ONCA 626).
Also interesting to note that a party is entitled to be paid for its expert whether the expert is called to give evidence or not. (Harding v. First Associates Investments Inc., 2003 ). Just because the expert is not called, did not mean that the expert’s report did not assist with certain issues and reducing issues for trial.
Factors which will be considered, include the complexity of the matter and how many experts were actually working on the report.
Taking all of the above into consideration, the Court of Appeal concluded, in this instance, that the expert fees being sought were reasonable for the respondent to bear.
However, that is not always the case. The decision in Hamfler v. Mink, a 2011 decision demonstrated that disbursements can sometimes found to be unreasonable and will be reduced.
Therefore, the reasonableness test is an important test to keep into consideration, when determining whether an expert’s report is required. Otherwise, that might be one disbursement which is not recoverable!