Bencher awarded $65,000 after judge rules LSO acted "unreasonably" in dealing with his request
Law Society of Ontario bencher Murray Klippenstein has been awarded “substantial indemnity” legal costs in his lawsuit against the province’s legal regulator, a higher rate of costs than is commonly awarded.
In a decision from Judge Colin Stevenson of the Ontario Superior Court of Justice, the court fixed the costs award at $65,000, a figure far short of the $200,000 Klippenstein had asked for in a case where he was asking, as a bencher, to have access to law society documents.
It is “much less than what I had actually spent,” Klippenstein says, “but it is a substantial amount and sends a message.
“As a litigator, I always knew that one rarely receives full compensation in a lawsuit, but I knew the risk, and I accept the financial hit, albeit a little sadly, because I did it all for the integrity of my and our profession.”
He adds: “I care about our profession, and what was happening at the Law Society was wrong, so sometimes you have to do your duty and take the hit.”
The case started in 2021 when Klippenstein, concerned about the law society’s Equality, Diversity, and Inclusion (EDI) policies, asked to have certain documents reviewed.
The LSO treasurer at the time advised Klippenstein to either bring the matter to Convocation or await the outcome of a committee the LSO established to consider it. Instead, Klippenstein started an action seeking a court order for the documents to be produced. The LSO countered that the benchers are not corporate directors, and that Convocation should decide the issue because the information requested exceeds that generally given to benchers.
The LSO argued it did not act unreasonably, as it is not subject to Common Law or the usual legislation governing corporate law. It is “sui generis,” or unique, being governed by statutes that have often been amended since 1822.
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The LSO said it had at least an arguable case that a bencher is not entitled to this level of document production any more than a corporate director is entitled to the production of every document they may request from corporate staff.
Klippenstein had conceded his role as bencher is one primarily of “oversight” and that a bencher isn’t automatically entitled to anything requested. Nonetheless, he argued “it was plain and obvious” that he should have received the documents he was eventually given.
Both sides devoted considerable time to affidavits before the LSO agreed to Klippenstein’s requests and produced all the documents. The LSO also agreed to pay Klippenstein’s costs. However, the parties could not agree on the scale—full indemnity, substantial indemnity, or partial indemnity—or the quantum under the applicable scale.
Full indemnity costs are awarded only in rare and exceptional cases where there is “reprehensible and egregious” behaviour. “This is not such a case,” said Justice Stevenson.
“The LSO did take a very slow and arguably unduly cautious approach to deal with the issues, which were a matter of political debate, but that does not make the LSO approach worthy of sanction on the highest costs standard.”
However, Justice Stevenson wrote, “The court does have discretion to award substantial indemnity costs if the party responding to the summary judgment motion acted unreasonably.” Substantial indemnity costs are a method that courts can use to censure or reprimand a party for their behaviour in litigation.
In his decision, Justice Stevenson wrote: “The fundamental question is whether the LSO’s response to the motion was unreasonable. I find that it was, in the circumstances …, not reasonable for the LSO to ‘stonewall’ a director for over a year before capitulating and producing everything he had requested.”
The “stonewalling” took the form of an unnecessary long response time to the summary judgment motion, the judge wrote, “but not enough to be awarded according to the full indemnity standard.”
Justice Stevenson added: “The LSO did take a very slow and arguably unduly cautious approach to deal with the issues, which were a matter of political debate, but that does not make the LSO approach worthy of sanction on the highest costs standard.”
However, Klippensten’s claim for $200,000 in costs was “excessive on any scale,” according to Justice Stevenson.
Klippenstein argued that his senior lawyer spent 180 hours on the matter at a rate of $650 an hour, and junior lawyers spent about 300-plus hours. That compares with the LSO, whose senior lawyers spent 80 hours at $350 an hour.
Klippenstein also said he could not hire a senior Ontario lawyer because those he approached were reluctant to oppose the LSO. He ended up using one from Alberta, making the matter more complex and costly.
“I do reduce the costs claimed [by Klippenstein] because of the extra complexity and expense added by the plaintiff and his choice of lawyer, Stevenson wrote.
Law society spokesperson Jennifer Wing said in an emailed statement that benchers have “always had measures in place to ensure they have the information they need to decide the matters they are considering.” The issue raised by Klippenstein’s case was about how to deal with requests from benchers for information in addition to that already provided, an issue that arises infrequently, she said.
“At the time Mr. Klippenstein made his request, there was no policy in place that addressed this issue. The treasurer asked Mr. Klippenstein to raise the issue in Convocation. Instead, he started his action.”
In the interim, Wing wrote, the then treasurer, “having identified the absence of a policy, appointed a working group to develop one.” This led to the society’s Strategic Planning and Advisory Committee proposing the policy on bencher information requests.
“That policy was adopted by Convocation on April 25, 2024. It allows a bencher to request additional information directly related to the bencher’s duty as a governor of the Law Society and reasonably required to fulfill their oversight and policy-making responsibilities.”
After the request is made, the treasurer decides on it in consultation with the society’s CEO. If the request is denied, the treasurer must provide written reasons within 30 days and advise what documents were reviewed and what consultations were made to reach the decision.
Wing added: “Convocation believes that this Policy fairly and responsibly deals with the question.”
As for Klippenstein’s lawsuit, she wrote, “The society determined that, in the circumstances, it would provide him with the specific documents he had requested before the policy was in place.”
The society also offered to pay his costs, but the parties could not agree on an amount. “Mr. Klippenstein requested $200,000; he was awarded $65,000. The Law Society accepts this decision.”
Klippenstein says he is glad for a resolution to the matter but notes: “This years-long history of the law society’s resolute withholding of information from a bencher trying to do his governance job, about EDI policies that are fundamentally defective but still in effect, is a story of incompetence, secretiveness, and cover-up, and this lawsuit fiasco for the law society is another chapter in that story.”