Months after the Commissioner of Competition’s application to challenge the merger between Rogers and Shaw Communications was rejected, the Competition Tribunal has ordered the commissioner to pay nearly $13 million in costs to Rogers and Shaw. The tribunal ruled that the commissioner’s approach to block the merger was deemed “unreasonable,” although the Competition Bureau insists on standing by its decision to challenge it.
Some argue that the commissioner’s challenge was wrong, citing the tribunal’s decision as evidence that Commissioner Matthew Boswell’s approach is ineffective and should be abandoned. However, this interpretation is incorrect. The awarding of costs is not a condemnation of the losing party. It is customary for the winner to receive compensation for the expenses incurred while presenting their case, and the losing party is required to make a reasonable contribution to these costs.
The calculation of costs in competition cases is determined by the tribunal. Ideally, parties should agree on a compensation amount before the outcome of the case is determined. If an agreement cannot be reached, the tribunal examines the claims made by each side and applies the principles and rules followed in federal courts to make a decision.
In the Rogers-Shaw case, the tribunal acknowledged the public interest in the litigation but noted that the commissioner did not succeed on any of the issues. The tribunal also rejected most of the commissioner’s arguments regarding excessive cost claims. It is worth mentioning that both sides incurred significant costs in this case, and although Rogers-Shaw claimed a higher amount, the commissioner would have sought $10.9 million if successful.
To understand the tribunal’s decision, it is necessary to differentiate between disbursements and legal fees. Disbursements include expenses related to case preparation, such as hiring experts and document management. In this case, the tribunal accepted all but two disbursement claims as reasonable.
Claims for legal fees are calculated differently, taking into account factors like case complexity and the behavior of the parties involved. While tariffs are used as a guideline, they have not kept up with rising legal costs, resulting in amounts often being calculated as a percentage of actual fees incurred.
In the Rogers-Shaw case, the main issue concerned the proportion of legal fees the commissioner should pay. The tribunal agreed with Rogers and Shaw that elevated legal fees were justified due to the commissioner’s refusal to adjust their strategy. However, the impact of this decision on the total amount of $13 million was minimal, as the majority of it was allocated to disbursements.
Overall, the tribunal’s decision emphasizes the reality of litigation, where compensation for costs is customary. It also highlights the need for responsible handling of cases to avoid excessive expenses.