Q: I have been involved in a court case for quite a long time. We had a trial and just got a judgment, and won. I was even awarded costs. However, my lawyer says that even after receiving costs I owe him some money on the legal bill. How can this be?
A: Costs in litigation are probably one of the least understood aspects of being involved in a court case.
First, in any court case, there is no guarantee that you will be awarded costs. They are always in the court’s discretion and there are numerous factors that go into a judge’s decision to award costs.
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While there is a general concept that whoever wins a court case is awarded costs, this is not an ironclad rule.
There are several scales or types of cost orders. The most usual are called “party and party costs.” Every court has a tariff of costs, usually set out on a chart that makes a monetary award for every step taken in a civil court action. If the judge gives you this type of cost order, your lawyer (or you) must go through the chart, see what steps or actions were taken in your case and add up the amounts awarded in the chart. You then propose to the other side the total amount and seek their agreement. If there is no agreement, either the judge or a court official assesses the proposed costs and comes up with the final figure.
From your question, I think you received a party-and-party award of costs. This is because in many provinces, the tariff costs only cover 25 to 50 percent of your actual legal bill. This is not the lawyer’s fault, it’s just the way the system works.
The other main award of costs is “solicitor-client costs.” This generally means that the judge expects the other side to cover most or all of the winner’s legal bill. This is the type of order clients want and expect, but courts award this type of cost relatively rarely.
Usually, such a cost award is made when the court wants to voice its disapproval of the losing side’s conduct during the case. If the other side ran the case to trial unnecessarily, or delayed or ran up extra costs through a serious lack of co-operation, the judge may feel the winner should not be out-of-pocket for the litigation costs.
Under a fixed-cost order you don’t have to spend more time and money getting them assessed. The judge has already done this and you know exactly what you are getting with the judgment.
Remember, your fees will be subject to GST and possibly a provincial tax. Also, keep careful track of your out-of-pocket costs because these could be reimbursed as well.
Rick Danyliuk is a practising lawyer in Saskatoon with McDougall Gauley LLP. He also has experience in teaching and writing about legal issues. His columns are intended as general advice only. Individuals are encouraged to seek other opinions and/or personal counsel when dealing with legal matters.
