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Walker v Ritchie, [2006] 2 SCR 428, 2006 SCC 45

Facts:

Appeal based on increase to a cost award bc lawyer carried risk of non-payment through the course of litigation. P suffered injury from accident and sued D. D denied liability. Took 4 years to get to trial. During trial P issued offer to settle pursuant to rule 49. D found 100% liable. Award exceed P’s offer to settle.

Issue(s):

What is the proper assessment of costs? Could a premium be included in costs because a lawyer to a risk of not getting paid?

Ratio:

Where P makes offer to settle under r.49 – P gets judgment in their favour above the offer – P entitled to costs on partial indemnity up to point of offer and on substantial indemnity from point of offer onward – this rule works both ways

Risk of non-payment to a counsel is not a relevant factor under cost scheme in r.57.01(1)

Analysis:

Lawyers can have a premium between themselves and the client – but cant pass it on to the other side.

r.57.01(1) sets out factors to consider

Does risk of non-payment to counsel fall w/in r.57.01(1)?
**It is not an enumerated factor in the rule
**Concerns over the kinds of incentive it creates
***If bc lawyer took on a case that had risky facts – this is not a good incentive bc don’t want people to only take factual easy cases
***If the reasons there is a risk is bc of complexity of case – rule 57 factors also take this into account
***Don’t want to do it simply to promote access to justice bc we don’t need it anymore of the contingency fee basis

Holding:

Appeal allowed and the premium set aside


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