Federal Court Of Appeal Allows $6.5 Million Lump Sum Cost Consequence

In a recent appeal (2017 FCA 25) relating to the issue of costs following a patent infringement trial, the Federal Court of Appeal commented that lump sum awards have found increasing favour with courts, and for good reason as they save the parties time and money. Lump sum costs awards further the objective of the Federal Courts Rules of securing "the just, most expeditious and least expensive determination" of proceedings (Rule 3). When a court can award costs on a lump sum basis, granular analyses are avoided and the costs hearing does not become an exercise in accounting. Furthermore, this case demonstrates that there are circumstances in which costs generated even at the high end of Column V of Tariff B bear little relationship to the objective of making a reasonable contribution to the costs of litigation. As a note of caution, however, the Court states that an increased costs award cannot be justified solely on the basis that a successful party's actual fees are significantly higher than the Tariff amount. As a matter of good practice, the Federal Court of Appeal notes that requests for lump sum awards should generally be accompanied by a Bill of Costs and an affidavit in respect of disbursements that are outside the knowledge of the solicitor.

Accordingly, the Federal Court of Appeal dismissed the appeal of a $6.5 million for lump sum cost consequence to the patentee's success in an action for patent infringement (2014 FC 844, affirmed 2016 FCA 216). At trial (2016 FC 91), the patentee (Dow) asked for costs above the amounts provided by Tariff B of the Federal Courts Rules. It...