Costs awards for Self-Represented Litigants in Ontario – The Basic Principles [video]

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Self-represented litigants may be entitled to costs in their legal proceedings. By understanding the fundamental concepts of a costs award, a self-represented litigant can present a better case for a reasonable costs award. This lecture explains the concept of costs awards in a legal proceeding, its purpose, the factors for determining costs and the underlying principles.

This lecture is taught by Amer Mushtaq, LL.B., M. Engineering , B.Sc. (Hons.), who is the Principal and Founder of Formative LLP.   Through his YouTube channel, YouCounsel, Amer shares practical advice from his years of legal experience to help anyone access justice and achieve their goals.  Subscribe today to learn more.

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Welcome everyone this is Amer Mushtaq from You Counsel. if you are a party to a litigation in a civil court in Ontario either as a self represented litigants or you are being represented by a lawyer... you may be entitled to certain cost with respect to that proceeding. Generally, if you are successful. What are those costs? What are the circumstances in which those costs are awarded? What are the fundamental principles for the court to decide what cost to award? We will cover those topics in today’s lecture.

We begin with our usual disclaimer that this course is not legal advice, if you have any specific questions you must contact a lawyer or a paralegal or the law Society of Upper Canada for any referrals. We’ll explain to you what is the cost award, what is that money that you get, what is the purpose of a cost award, what are some of the factors that the court will consider in awarding cost, what are some of the underlying guiding principles for the court to keep in mind, what is the record of activities, why do you need it, what is BIll of Costs and Cost Outline... these are specific documents that you may need to prepare, what are those about... we’ll explain that.

What is the cost award? it’s money that is given to you that is ordered by the court against one party and so, the money is related to either a step one specific step in a proceeding. So, for instance for a motion that you may have brought or may have dealt with and then the cost may be in relation to that motion... or with respect to an entire proceeding. So, it could be related to the cost, could be related to the time that you commence the court action to the time you were successful at trial. So, it could cover any step in that proceeding. Generally speaking, costs include lawyers fees. Traditionally, parties retain lawyers to fight their cases and civil courts Ontario... that scenario has been changing increasingly. But generally speaking, traditionally, these are lawyers fees... the lawyers time, the lawyers hours, that he or she spent on your file with respect to your claim with respect to your court action. Those are lawyers fees. The other component are the disbursements... these are court fees, process server fees, if you went through the discovery process then, you know. ordering the transcripts for discoveries of booking the room, the court reporter... those costs, mediation costs, copying, binding, faxing, all of these costs that you may have incurred with respect to your civil action. Those are called dispursements. In some cases, those costs could be significant. For instance, in personal injury cases where you may be required to provide doctors reports, and these all third party medical reports. The cost could be in thousands of dollars. So, these are the disbursements. could be significant and these are also recoverable. So, there are two components lawyers fees and disbursements, generally... but as I said increasingly we have self represented litigants who are representing their cases by themselves in the courts of Ontario... some reports suggest that about sixty to sixty five percent of litigants in Ontario Courts are self represented. So, self represented litigants if they are spending their own time with respect to their case, then obviously, they’re entitled to certain cost the court will award... and costs may not be as much as a lawyers fees, but they will get certain costs. There could be other scenarios in which a self represented litigant may seek guidance or assistance from a lawyer or a paralegal from time to time, so, there may be a combination of cost self represented litigants own costs and then some partial cost that the litigant may have incurred through through the guidance counseling of a lawyer or a paralegal. So, these are the costs award. What is the purpose of the cost award? The basic purpose is that the winning side gets some reasonable indemnification for the cost that they have incurred. So, going back, so, let’s take the example that you commence a court action against a party for one hundred thousand dollars and let’s say you were successful. The court at the end of the day, at the end of trial, gave you the judgment that the other side is required to pay you one hundred thousand dollars, as you claimed. So you get your one hundred thousand dollars with respect to your fundamental case, but what happens to the cost that you incurred in the process of that fight? So, from the time you commence, you incurred court fees, maybe legal fees, disbursements. What happened to that and the court may award you that cost to a certain degree. So that’s a reasonable indemnification and remember that you never ever get actual cost that you have incurred. So, if you, let’s say, you incurred one hundred thousand dollars in your legal costs that includes dispersement, legal fees, whatever... you have incurred one hundred thousand dollars... you will never get one hundred thousand dollars, I shouldn’t say never, but it is extremely extremely unlikely that you will get one hundred percent of the cost awarded. So, you spent one hundred thousand dollars, and generally speaking, you may get about fifty thousand dollars back, you’ll get fifty cents on a dollar, sixty cents on a dollar, maybe seventy cents on a dollar but you will not get the full cost. So, it’s not the actual cost of the court will award and the concepts... one concept is called partial indemnity. You will see this word being used in Rules of Civil Procedure, it has a specific definition, I’m not going to get into that... but generally speaking, what you should understand from partial indemnity is that you may recover about thirty percent, forty percent, maybe fifty percent of your actual costs. If you’ve spent one hundred thousand dollars, generally yields, you’ll get thirty maybe forty thousand dollars recoverable as costs, right, so thirty forty cents on a dollar not one hundred cents on the dollar. The other concept is substantial indemnity which is also defined in the rules and I’m not going to get into definition, but generally speaking, you may get about fifty to seventy five percent of your actual cost to substantial indemnity. Now generally speaking, the court generally awards partial indemnity. Right? So, the majority of the cases this is what the court is awarding in costs not this one. And there are specific circumstances in which the court may work substantial indemnity and we’re not going to discuss that today but but this to give you a sense that these are available in the Rules of Civil Procedure.

OK, remember that the court may even award costs against the winning side. The basic principle is that the winning side does get cost awarded for it, against the other side, but there may be circumstances in which the court may consider that the winning side has to pay the cost of the losing side. and so, there are specific ways in which that’s awarded. Generally, if your conduct was so bad in terms of litigation, in terms of the conduct of that litigation, that even though you won the case, the judge believes that you should not be entitled to your cost, or worse, that you may have to pay the cost of the other side. So, it doesn’t happen that often but it does happen based upon the conduct. So, what you want to keep in mind, with respect to the cost award it is that the cost of war is at the discretion of the judge. Section 131 of the Courts of Justice Act, show you in a moment, that is the one that provides that the judge the power to award costs and the judges have a huge, huge, huge, discretion. So, and again, the in terms of the cost award and the way the judges will decide the cost award is not really a science, it’s an art and it’s based upon a number of factors and principals we’ll talk about that. Let’s look at Section 131 of the Court of Justice Act and it states one 131 sub 1 subject to the provision of an act or rules of court, the cost of an incidental to a proceeding, or a step in a proceeding, are in the discretion of the court that’s important and the court may determine by whom and to what extent the cost shall be paid. So the key message here is that it’s in the discretion of the judge, you want to keep that in mind, and second, authority that you want to look at is the is Rule 57 of the rules of civil procedure and we’ll show you that in a little bit... but those are the two items that you want to look at if you want to understand more about the cost award. Now, factors for awarding cost. It’s covered in rule 57.01. Some factors I’ll show you and then we’ll take you to the rule... but what is the reasonable expectation of the winning side? The court will consider that, in terms of awarding costs. If there’s lawyers involved, what was the lawyer’s hourly rates and what was the amount of time that the lawyer spent on the file? What was the amount that you had claimed in that court action or defending it? What is the amount that you actually recovered? If you claimed one hundred thousand dollars in your claim, but you recover ten thousand dollars then the cost of war is going to be significantly different and there are rules about that as well... what was the complexity of the proceeding? So, these are some of the factors, let’s look at rule 57.01 which talks about these factors, the amount that you probably recovered, the amount claimed, and the amount recovered in the proceeding apportionment of liability. Let’s say, was the defendant liable for the for the case one hundred percent or were there other parties where the plaintiff also had some liability? Complexity of the proceeding, importance of the issues, for the court, for the public, the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding. So, this is the parties conduct... if you took certain steps in the proceeding that unnecessarily lengthened the duration of the preceding, you are going to get some sanctions by the court with respect to cost award... or, whether any steps in the proceeding was improper, vexatious, or unnecessary... the court will consider that. Taken through negligence, mistake, or excessive caution a parties denial of or refusal to admit anything that should have been admitted. So, when you look at these factors, what is the overarching principles? The overarching principle is that you must act reasonably at all times during the litigation, during the proceeding. And what do you what do I mean by acting reasonably? I’ll give you an example, let’s say you serve a statement of claim on the other side and under the rules that the defending side has to serve their defense within twenty days, thirty days, forty days, sixty days depending upon what rules apply... and the other side contacts you, let’s say it was due in thirty days, the other side contacts you, and says to you listen we can’t serve you our defense in thirty days... but we’ll do that within forty five days, is that OK? You may turn around and say, “absolutely not, I want strict compliance with the rules”... meaning I want you to serve your defense within thirty days or I’m going to go and note you in default... meaning that you will not be able to file your defense... and you can actually do that. So technically speaking, you can demand a strict compliance of that rule but what’s going to happen, in majority of the cases, what will happen is you noted this party in default, you denied them the opportunity to serve there, and file their defense. Now you will go and bring a motion for default judgment because that’s what naturally will be the next step... and the other party will come and defend that motion for default judgment and present to the court, that they wanted to serve the defense but it was getting delayed by fifteen days and you refused to do that. The court may, in majority of the cases, will find your conduct to be unreasonable and then that may be a situation where you acted unreasonably because it was only a matter of fifteen days... and that may be there may be a circumstance in which fifteen days may not may be as a big deal in your specific case... but generally speaking, if the court finds that that was unreasonable a few that you did not allow another fifteen days for a party to file their defense, you may even get a cost award against you. So acting reasonably at all times and there could be many, many, more examples we can talk about. But generally speaking, if your conduct is unreasonable in advancing the litigation, then the court may award costs against you. So the reasonable ness is one principle that the court will look at. Then, settlements are always encouraged in courts, the court will always be looking into what did the parties do to resolve this matter? What kind of offers, settlement offers, did they make to each other? When did they make those offers... and the court will consider that because, ideally, the court will like parties to resolve their disputes through a mutual agreement and not waste the court and everyone else’s time and resources.

So, you want to keep full records of your activities and that’s important because if you have a lawyer... you will notice that the lawyer will have a detailed log of their activities based upon the date and the time and the number of hours and minutes that they spent on your file and it will indicate what kind of activity they were performing at that time. So, you want to do the same for yourself and you will need that at the end of the day when you are requesting for your cost. So, if you are researching a specific case, then you want to put a note that on October so and so date to you spent three hours researching this part for your case. If you’re preparing certain documents, let’s say, statement of defense, then you want to.. you want to note down how many hours you spent doing that activity and on what date. So, detailed log of activities is important. You also want to keep an account of disbursement so, keep all invoices, whatever the cost, additional costs you have incurred... you want to keep detailed amounts in record and you want to keep as much invoices as possible because you may need them, at the end of the day to show to the court that you actually incurred those costs. Now there are two kind of documents mentioned in the rules, one is called Bill of cost, and second is called cost outline and then essentially, these documents basically explain the amount of time that you’ve spent doing certain activities and what are the disbursement that you have incurred. So, especially the cost outlined, when you have finished your case, let’s say a trial and the trial is over... the court will ask you to provide cost outline. If the cost are not agreed by the parties, then the court will ask for the costs outlined in which you will explain to the court why X amount of dollars should be awarded to you, in costs... and that’s your sort of persuasive argument, if I may say that... that you will have to present it to the court and the court will review that and then award costs. So, these two forms are important and we’ll cover those topics, those forms, in a separate lecture, and we’ll probably go through cost outline to show you what kind of information goes in a cost outline and how do you go about filling that out. So, that that’s about keeping records. essentially what you want to keep in mind with respect to cost is the principle of proportionality. The word proportionality is a very important word in a civil litigation matter, what you are doing is that proportional to your underlying case... if you have a case worth ten thousand dollars and the issues are not complicated but you are bringing motion after motion just to, you know, create trouble for the other side and increase their costs and whatnot... the court may find that to be disproportionate conduct and then the rules of proportionality will be applied and you may get sanctions against you for acting like that. So, always act reasonably in a litigation, in a civil litigation, so, at the end of the day when you’re in front of a judge you can hold your head up high and indicate to the judge that you acted reasonably at all times with respect to the conduct of the litigation and you did not take any steps, you did not do anything that was unreasonable. Always try to settle if you can and keep those two principles in mind and hopefully this gives you a broad sense of how the costs are awarded, especially if you’re a self represented you may not have any understanding of this.

So, hopefully, this explains to you... we’ll talk about Rule 49 offers I believe to have a lecture on Rule 49, but if not I’ll check and I’ll put a lecture on Rule 49 which is important with respect to offers of settlements and what is their role with respect to the actual cost that you are awarded at the end of the day. Avoid unnecessary of accessions steps, we’ve already covered that, and so, please contact us, give us your feedback and any questions or comments you may have we look forward to your feedback... thank you for watching!


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