Q:I am involved in defending a lawsuit. The other side is asking that I pay their legal costs on a “solicitor-client basis.” What does that mean? Why should I pay the other side’s costs if I win?
A:The law of costs is a complex area. It is governed by the rules of the courts of each individual province and territory, so there are variations from place to place.
In any lawsuit, a person involved as a party to the litigation is able to put forth a claim for costs. Costs can be awarded at different levels. Whether costs are awarded at all, in whose favour and at what level depend on a number of factors that vary from case to case.
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First, remember that costs are discretionary. It is up to the judge to award costs and in what amount. The judge making this decision has a wide range of choices and there is little to fetter his or her discretion. Even on appeal, appellate courts are reluctant to interfere with a judge who is exercising discretion over costs. There are general principles that come into play.
It is usually maintained that “costs follow the event,” meaning that the person winning the case is entitled to costs unless there is some reason not to do so. If you successfully defend the lawsuit, you should be able to claim your costs and not pay any costs of the other side.
There are many exceptions to every rule. Even if you win, you may not get your costs. If the case raises a new point of law that could have gone either way, sometimes the judge will say everyone should bear their own costs of the lawsuit. If you and/or your lawyer were guilty of some misconduct during the course of the case, the judge may deprive you of costs.
Once the judge decides who, if anyone, will get costs paid to them, he or she must then decide the scale or level of costs to be paid. It falls into two categories: party and party costs and solicitor-client costs.
Party and party costs are based on a tariff or chart, published by each court in each province. This chart sets out what costs are to be claimed in the various components of a lawsuit. In addition, there are payments for expert witnesses and out-of-pocket costs that are allowed. These costs generally do not equal the legal bill that you pay your lawyer, and are only a partial indemnity to offset legal costs.
Solicitor-client costs are more extreme and higher. Solicitor-client costs mean that one side has to pay the legal bill of the other side. Sometimes this is modified. These costs are awarded in rare cases, and are usually indicative of the court expressing its disapproval of the conduct of one side in the lawsuit.
It often relates to conduct regarding the litigation, not the conduct giving rise to the litigation. If you get solicitor-client costs awarded against you, it is likely that the court sees you as having done something seriously wrong in the lawsuit.
Both types of costs are subject to review by court officials. If you cannot agree on the costs, an independent court worker assesses the costs and comes to a decision, which can be reviewed by a judge of that court.
Costs are an important part of the civil litigation process. You should discuss them with your lawyer throughout the action.
Rick Danyliuk is a lawyer with McDougall Gauley LLP in Saskatoon.
