In a recent judgment for costs (Harris v. Leikin Group Inc.  O.J. No. 2633), Judge D.M. Brown examined counsel’s claim for costs for the documentary discovery phase. Citing “the threat that runaway discovery costs now pose to our civil litigation system” he urged courts to scrutinize cost claims for documentary discovery. He went on to do just that in this estate litigation case.
Justice Brown expressed his expectation that firms would apply a staffing pyramid for discovery that would see the bulk of the work done at the bottom – at the lowest hourly rates. In this case, he noted the plaintiffs had done the reverse. On the documentary discovery phase alone, senior counsel had accumulated 244 hours and 220 hours respectively, while junior associates spent only 8 hours, and a law clerk only 12 hours. Calling this division of labour “out of line and unreasonable”, Justice Brown stated:
If a client wants to pay through the nose for documentary discovery by having its counsel apply an invested pyramid profile to that task a client is free to do so. But an opposing party cannot reasonably be expected to pick up the tab for such an unreasonable division of labour, even if the opposing party is obliged to pay substantial indemnity costs. (paragraph 42).
A total of 475 hours was spent on discovery. In Justice Brown’s view, staffing had not been appropriately distributed by the firm, accordingly, he inverted the fee schedule himself, applying the most senior rates to only 60 hours of the time, and the law clerk’s rate to the balance of 415 hours.
So what is reasonable for staffing the discovery phase? Justice Brown noted with approval the defence team’s breakdown as follows: one hour for the most senior lawyer, 40 hours for the second most senior, 150 hours for a junior associate and 100 hours for two law clerks. In Justice Brown’s own words “this is a reasonable staffing pyramid profile for documentary discovery”.
This interesting decision illustrates the need for counsel to approach the discovery phase in a defensible and cost-effective manner. In short, invert the pyramid at your own risk.
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