Barbados Small Business Association (BSBA)

• Jurisdiction: Barbados
• Court: Fair Trading Commission (Barbados)
• Judge: Sir Neville Nicholls,Mr. Andrew Brathwaite,Mr. Gregory Hazzard,Mr. Alfred Knight,Mr. Andrew Willoughby
• Judgment Date: 17 November 2010
• Docket Number: NO. 0003/09

In the Matter of the Utilities Regulation Act, Cap. 282 and the Fair Trading Commission Act, Cap. 326B of the Laws of Barbados;

And in the Matter of an application by the Barbados Light & Power Company Limited for a review of electricity rates pursuant to Section 16 of the Utilities Regulation Act, Cap. 282 of the Laws of Barbados;

And in the Matter of an application for Costs by Intervenors pursuant to Section 46 of the Fair Trading Commission Act, Cap. 326B;

Barbados Small Business Association (BSBA)

Barbados Association of Non-Governmental Organisations (BANGO)

Barbados Association of Retired Persons (BARP)

Applicants

Before:

Sir Neville Nicholls Chairman

Mr. Andrew Brathwaite Commissioner

Mr. Gregory Hazzard Commissioner

Mr. Alfred Knight Commissioner

Mr. Andrew Willoughby Commissioner

NO. 0003/09

FAIR TRADING COMMISSION

DECISION

PART ONE – BACKGROUND

1 On May 8, 2009, the Barbados Light & Power Co. Ltd. (BL&P) filed an application with the Fair Trading Commission (Commission) for a review of its electricity rates pursuant to Section 16 of the Utilities Regulation Act, Cap. 282 (URA) of the laws of Barbados and Rule 60 of the Utilities Regulation (Procedural) Rules 2003 (the Rules).

2 In determining the review of the electricity rates, the Commission conducted a series of pre-hearing activities and convened a hearing from October 7, 2009 to October 23, 2009 in which parties to the proceedings participated.

3 Rule 64 of the Rules provides that persons may apply to be granted intervenor status in order to appear before the Commission in rate review hearings, such as the one referred to above.

4 Persons who are granted intervenor status are entitled to actively participate in hearings by cross-examining witnesses and making oral opening and closing statements. They are also entitled to participate in the pre-hearing activities by presenting evidence, filing interrogatories, making requests for information and appearing at whatever conferences the Commission convenes.

5 A number of persons were granted intervenor status and actively participated in the rate review proceedings. They were the Barbados Association of NonGovernmental Organisations (BANGO), the Barbados Association of Retired Persons (BARP), the Barbados Consumer Research Organisation Inc. (BARCRO), the Barbados Small Business Association (BSBA), Canbar Technical Services Ltd., Dr. Roland Clarke, Mr. Errol E. Niles, Attorney-at-Law, Mr. Douglas B. Trotman, Attorney-at-Law and Sentinel Group Caribbean Inc.

6 During the hearing the Commission issued Procedural Directions #3 on September 7, 2009 which advised that at the end of the rate application proceedings, any party to the rate application hearing is entitled to apply to the Commission for costs.

Filing of the Applications for Costs

7 Following the hearing, three (3) intervenors, namely BSBA, BARP and BANGO filed with the Commission applications for costs on November 2 and 3, 2009. These applications included claim forms which itemised the scope of work that was done by the intervenors' consultants. The Applicants submitted to the Commission their applications in accordance with the Fair Trading Commission Costs Assessment Guidelines 2007 (CAG).

8 Section 46 of the Fair Trading Commission Act Cap. 326B (FTCA) authorises the Commission to award costs arising out of Commission proceedings. Section 46 of the FTCA states, inter alia, that:-

“The costs of and incidental to any proceeding before the Commission shall be in the discretion of the Commission and may be fixed at a sum certain or may be taxed.”

9 Sections 5 (1) of the FTCA and 6 (1) of the URA provide that a panel of Commissioners shall sit to hear and determine, inter alia, matters relating to utility regulation. This includes the issue of costs. The Commission, having received the applications for costs, decided that this matter should be disposed of by way of a written hearing pursuant to Rule 37 of the Rules.

Duty of the Commission

10 In keeping with Section 3.3 of the CAG the Commission must determine if the Applicants are eligible to apply for costs. Section 3.3 of the CAG states that a party in a Commission proceeding is eligible to apply for a cost award where the party (a) primarily represents the direct interests of consumers or of rate payers in relation to the service provider or (b) is a person who is granted intervenor status by the Commission pursuant to the Rules.

11 The Commission granted intervenor status to all of the Applicants to permit them to participate in the electricity rate review hearing (a Commission proceeding). As such, in keeping with Section 3.3 of the CAG, the Applicants were eligible to apply to the Commission for costs.

12 By virtue of Section 5 of the CAG, an Applicant claiming costs must also demonstrate to the Commission why a cost award ought to be made in its favour. This means that the Commission must determine if the persons applying for costs are entitled to recover such costs.

13 The Commission assessed the entitlement based on the Applicants' contribution during the rate review proceedings and the requirements of the CAG.

14 The award of costs arising out of a Commission proceeding is a matter that is within the sole discretion of the Commission.

15 The Commission's discretion in awarding costs must be exercised judiciously and in accordance with the law. The Commission's scope in awarding costs is defined in the judgment of the Honourable Mr. Justice Christopher Blackman in High Court Suit No. 373 of 2006 – The Public Counsel v The Fair Trading Commission. In this case stated brought pursuant to Section 41 of the FTCA, Justice Blackman set out in his decision the boundaries of the Commission's discretion in relation to awarding costs.

16 The learned trial Judge determined that the law does not permit the Commission to award an honorarium to intervenors that are unrepresented by legal counsel in recognition of individual effort in preparing and presenting a case before the Commission. The law also does not permit intervenors to be awarded costs of preparing for and presenting the case before the Commission in the same way that costs for similar activity would be awarded to an Attorney-at-Law.

17 According to Justice Blackman if a person appears before the Commission and they are unrepresented by legal counsel, where the power to award costs exists, it is limited to an award of out-of-pocket expenses only. Out-of-pocket expenses include but are not limited to amounts paid to an expert or consultant. However, parties who are represented by an Attorney-at-Law are entitled to apply for costs for preparing and presenting the case to the Commission.

18 Two (2) of the Applicants, BARP and the BSBA, were represented by Public Counsel who is an Attorney-at-Law. BANGO was not represented by an Attorney-at-Law. BARP and the BSBA though represented by the Public Counsel cannot seek to recover legal costs. The role of Public Counsel under Section 9 of the URA is to assist consumers with preparing and presenting their cases. As such they are not entitled to claim legal costs for the work done by Public Counsel.

19 The BSBA, BARP and BANGO can only apply for out-of-pocket expenses, that is, reasonable disbursements such as travel, photocopying and proven consultation fees. In order for the Applicants to recover the funds that they are seeking, the Commission must be able to verify the Applicants' claims by examining all of the Applicants' receipts, travel claims and other documentation such as consultant reports and submissions which support the expenses being claimed. Parties may also rely on Affidavit evidence in support of a cost claim.

Burden of Proof

20 Pursuant to Section 3.2 of the CAG, the burden of establishing eligibility for a costs award is on the party who makes an application for a costs award.

Evidence before the Commission

21 In addition to the Applicants, the Commission invited the BL&P to be a party to the hearing as the costs applications arose out of proceedings which were triggered by the BL&P's rate review application, and the BL&P could be affected by the outcome of the cost assessment process. As such, on March 5, 2010, the applications were sent to the BL&P for their review.

22 Prior to commencement of the written hearing the Commission instructed the Applicants to submit further written submissions and documentation to support their claims. No further submissions were filed by the Applicants.

23 The BL&P was given an opportunity to respond to the applications and in its response dated May 31, 2010 addressed the individual applications and raised issues which it believed that the Commission should take into consideration when assessing costs.

24 After receipt of the BL&P's submissions the Applicants were invited to submit final written submissions or documents responding to the BL&P's submissions. None of the Applicants responded to the BL&P's submissions.

25 In determining this matter the Commission took into consideration the contribution made by each Applicant during the rate review proceedings, the costs applications of BSBA, BARP and BANGO and the submissions of the BL&P.

26 According to the CAG provision 10.4

“Recovery of costs for experts shall be limited to those experts who:

• (a) appeared before the Commission in the relevant proceedings; or

• (b) whose written reports, legal opinions, and affidavits were tendered in evidence to the Commission; or

• (c) whose reports, opinions or advice can be demonstrated to have assisted the Commission in the proceedings.”

Interpreted in its strictest sense this means that the consultant or expert appears before the Commission to give evidence or to make submissions or that they provided useful advice for their client and that such advice or submissions would form a part of the evidence and enhance the Commission's...