For many civil litigation lawyers, the merits of the case and the complexity of the legal issues are their daily bread. They pursue their intellectual fascination with the power and process of the law. Of course for some lawyers, the fees to be earned is their raison d’être and you may be familiar with one or two of these members of our bar. What is lost between Pericles and the plumber is some early, sustained focus on the costs to the client of proceeding with any type of litigation and the client’s understandable terror that he will suffer a costs order. The costs order represents a triple insult – usually the loss on the case, the sting of legal fees thrown away on his own counsel, and the ignominy of signing the cheque payable to the opponent’s advocate. Any counsel who has practiced in the civil Courts will at some point have experienced the client remorse of the lost case and the costs order. This cannot be avoided. But what can be done is that both lawyer and client start discussing costs more seriously early on.
There has been a lot of discussion about a movement to fixed fees, contingency fees and other creative risk sharing between lawyer and client. The reality in Ontario is the continuing norm of hourly rates and monthly accounts. So on the “my lawyer” side of things there is not much change in sight. But what about the “their lawyer” side of things?The recent decision of the Ontario Superior Court in Farlow v. Hospital for Sick Children, 100 OR (3d) 213 provides a good first principles analysis of how the “their lawyer” costs system works and should work. A fresh approach was called for as the Court was asked for an entirely new type of costs relief – an order that from day one, even if the plaintiff did not succeed, no costs would be ordered against her. In the final result, the Court declined to provide the novel order but made clear that its judicial mind is always open to new types of costs orders to fit new types of situations. The Court did not foreclose the argument in future that it could provide some bullet-proofing to a party to avoid the consequences of a lost Court proceeding.In one growing segment of civil litigation, the world of estates, the Courts have historically taken a rather civilized approach to costs and ordered them out of the estate, as long as the losing party demonstrated at least some merit to his position. This costs philosophy no doubt stems from the human element of estate litigation when the judge considers such fact situations as a caring adult child cut out of his father’s estate by a last moment Will in favour of the young, female, live-in nurse. The child is viewed as occupying the moral high ground, however, he clearly occupies the legal low ground. The recent trend has been against using the estate as an ATM for costs but the old maxim of “costs follow the event” will never be adhered to slavishly in the estates world. And so it should not be adhered to slavishly in other civil matters.The last word on costs remains the Supreme Court of Canada decision in British Columbia (Ministry of Forrest) v. Okanagan Indian Band 3 SCR 371 The Court retains broad discretion to order costs as it sees fit. More than mere indemnity of the winning party must be considered. Other factors such as the fair and efficient use of the legal process should come into play.Counsel should not be shy in arguing for costs orders out of the norm when the circumstances dictate.