Is the Tariff System for Costs Broken?

Dow Chemical Co v Nova Chemicals Corp 2017 FC 759 Fothergill J
            2,160,705 / film-grade polymers / ELITE SURPASS

In this costs decision related to the remedies phase of this litigation, Fothergill J awarded Dow, the successful plaintiff, legal fees in the amount of $1,200,000.00. This was about 15% of Dow’s claimed costs, though Fothergill J found that the legal fees claimed by Dow were not adequately supported by evidence, and did not on their face appear reasonable [20]. Of more interest than the size of the award is that Fothergill J used his discretion to assess the award at three times the maximum specified under the Tariff (approximately $400,000.00) [22]. As discussed here, O’Keefe J also departed from the Tariff in awarding costs in the liability phase, 2016 FC 91 saying the Tariff award would be “totally inadequate” [26]. This suggests that the Tariff system is so outdated as to be effectively broken, at least for major patent litigation. The Federal Court has long since recognized this, with a Sub-Committee having been struck almost three years ago, in November of 2014, and a discussion paper issued in October of 2015. Perhaps I’ve missed it, but I haven’t seen anything more from that Sub-Committee since then.