Law Times - Newsmakers

Dec 2009 Newsmakers

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news Ex-partner made to pay firm $500,000 in costs Judge rejects claim for bigger bonus BY GAIL J. COHEN I Linda Rothstein won the case on behalf of Aird & Berlis LLP against former partner Harold Springer. n May, Toronto firm Aird & Berlis LLP was awarded nearly $500,000 in costs from a former partner who lost a lawsuit. Harold Springer launched the suit against the firm claiming it should have paid him a bigger bonus before his departure. Superior Court Justice Frank Newbould's April ruling in Springer v. Aird & Berlis LLP makes fascinating reading for anyone interested in the compensation system at a big law firm. The case was a win for Paliare Roland Rosen- berg Rothstein LLP managing partner Linda Rothstein, who represented Aird & Berlis. She told Law Times the firm was very "pleased" with the result. Springer was a partner at Aird & Berlis until Jan. 25, 2002, when he notified the firm he would be withdrawing from the partnership as of Feb. 28, 2002. According to court documents, he claimed he was entitled to a larger number of partnership units than were allocated to him for the years 2001 and 2002 and claimed payment of the additional income that he would have received for those years had he been allocated the right number of units. Springer was paid a withdrawal payment under the firm's partnership agreement but wanted an additional amount to reflect the higher number of units that he claimed he was entitled to for 2002. On Jan. 25, 2009, Aird & Berlis offered $100,000 to settle the action. On Feb. 4, it made a further offer to settle for $150,000. Neither offer was accepted. The trial commenced Feb. 9, 2009, and Spring- er's claim was ultimately dismissed. In dismissing the claim, Newbould noted the firm's partnership agreement did not stipulate any appeal rights from an allocation of units. "Mr. Springer's claim is based on promises or representations said to have been made to him by certain members of the management and executive committees regarding the number of units he would be awarded," said Newbould. The judge said Springer's claim "rests in large measure on oral conversations that he said he had with various people in the firm. . . ." 12 December 2009 However, Newbould said he had "consider- able difficulty accepting much of Mr. Springer's evidence as reliable. "In my view, Mr. Springer's evidence of what was said in his conversations with other partners was in large measure not recollection but recon- struction, carefully crafted and rehearsed." Springer's lawyer Thomas Dunne of Gowling Lafleur Henderson LLP told Law Times they will be appealing the ruling. While the damages claimed in the statement of claim were for $1 million, the parties agreed prior to the trial on the quantum of damages being $585,759.37. Newbould awarded costs to Aird & Berlis, but that, too, became somewhat of a battle of wills. Aird & Berlis had sought about $524,000 on a partial indemnity scale until the settlement offer, while Springer suggested the proper amount would be about $262,000. He did not oppose the disbursements of about $47,000. Springer questioned the amount of time spent on the case by Aird & Berlis' counsel, includ- ing Rothstein and fellow Paliare Roland partner Robert Centa and associate Jean-Claude Killey, who began working on the case as a student. Newbould, however, took odds with Spring- er's failure to submit information regarding time spent by his own lawyers on the case while opposing submissions from the defence. "It is difficult to be able to be sanguine regard- ing the correct number of hours to be included in any award of costs, particularly when the plain- tiff has not produced any information about the hours spent by his solicitors," the judge wrote. Springer proposed substantial indemnity hourly rates for Rothstein of $360 and for Centa at $237. "In my view, these rates would be wholly inad- equate substantial indemnity rates for litigation in downtown Toronto conducted between major law firms," declared the judge. Newbould granted the defendant costs on a partial indemnity scale prior to the Jan. 25 offer and on a substantial indemnity scale thereafter in the amount of $440,000 plus GST and dis- bursements of $47,345.13 inclusive of GST.

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