Court costs no worry when taxpayers pick up tab

It's time to rethink the idea that governments should automatically pick up the tab when politicians or managers get into legal disputes.
Taxpayers in North Saanich, a Victoria-area community, are on the hook for $170,000 in extra costs after Coun. Peter Chandler was found to have made false statements that damaged the reputation of Donald Hunter, who lives in the community.
The award was only $15,000. The Municipal Insurance Association paid it, along with the district's legal fees above a $25,000 deductible.
But the municipality's insurance rates will now rise $144,000 over the next eight years as the insurer gets its money back. Add the $25,000 deductible and taxpayers are out about $170,000.
That didn't have to happen. When Hunter felt Chandler had attacked his integrity in a damaging way, he didn't immediately sue.
"There followed an exchange of letters between counsel in which an apology was requested and refused," the B.C. Supreme Court judgment noted. "Litigation was then commenced. Mr. Chandler has neither retracted nor apologized."
The taxpayers might have been spared any costs with an apology. A negotiated settlement could easily have been reached, cutting the costs by at least $120,000.
Instead taxpayers funded a losing legal battle and will be paying for it over the next eight years.
Chandler likely believed he was doing the right thing in refusing to apologize or settle.
But would he have committed $170,000 of his own money to pursuing the principles involved?
Even if he would have, that doesn't mean residents share his enthusiasm.
Most disputes are settled outside the court system because people look at the costs, rewards and risks of full-scale legal battles and settle.
It's not just a municipal issue. The B.C. government has funded expensive legal battles when settlement would have made sense. And taxpayers paid something like $2 million to the six lawyers representing Brian Mulroney's at the inquiry into his relationship with Karlheinz Schreiber.
And it's also not just a question of the cost to taxpayers.
For starters, there is a big fairness issue. Individuals or small companies, paying their own legal bills, find themselves facing governments with unlimited resources and the ability to wage a legal war of attrition.
Willow Kinloch sued the Victoria police after she was tethered in cells and pinned against a door for four hours. She had been picked up as a drunk 15-year-old.
Months before trial, her lawyer offered to settle for the lawsuit $40,000.
Instead of making a counter offer, lawyers for the police and city didn't respond.
The case went to trial. Kinloch was awarded $60,000 and the city spent something over $100,000 on its legal costs.
And the court ordered the city to pay her legal bills because it had been "unco-operative and difficult" during the litigation. Lawyers for the city and police had needlessly engaged in activities that increased for both sides, the Supreme Court judgment noted.
Which leads to conclusions of either gouging or a strategic attempt to make it too expensive for a 15-year-old to get access to the justice system. (The city appealed the award, then dropped the challenge and reached a confidential settlement.)
And then there are the messages sent when governments are so quick to turn to the courts.
Victoria's response to the Kinloch suit indicated to police officers and the public that it violating prisoners rights - the jury's conclusion -- was acceptable.
It's right to pay the legal bills of politicians and employees - government or private - who end up in court as a result of doing their jobs in good faith. Without that protection, they might shy away from issues for fear of legal action.
But when protection is automatic and the legal bills the taxpayers' problem, there is a risk governments will become bullies and waste taxpayers' money on unnecessary court battles.
It's time for governments to acknowledge the risk and turn decisions on legal case management - including negotiated settlements - over to an independent expert panel.