The costs a successful litigant is entitled to recover from an unsuccessful party is governed by “Division 2 – The Tariff: Schedule C” of the Alberta Rules of Court, Alta Reg 124/ 2010. Schedule C, and the costs a party is entitled to recovery for steps taken in an action, have not been adjusted since 1998. The Rules of Court Committee recently released its recommendations for amendments to Schedule C and the costs awarded during and after litigation. The Committee noted that there was a broad consensus amongst interested parties who provided feedback that Column C should be increased. An increase of 35% was recommended by the Committee to account for inflation. It was further recommended that Schedule C be reviewed and increased every three years to adjust for inflation.
Costs are primarily intended to indemnify the successful litigant for a portion of their legal costs. Full indemnification (referred to as “solicitor-client costs”) are less frequently awarded by the Courts because cost awards are intended to also promote early settlement, encourage efficient use of Court time and to promote efficiency during litigation (British Columbia v. Okanagan Indian Band, 2003 SCC 71). Schedule C provides the basic structure for cost awards; however the Court holds ultimate discretion to determine what costs a party receives.
The Committee recommended that a fee should not be added where an action resolves through Mediation or Judicial Dispute Resolution. Although preparing for and attending a dispute resolution may involve considerable legal expense, the Committee recommended that dispute resolution not be viewed as something a party can “win or lose”. Dispute resolution, the Committee suggested, was not necessary for the majority of actions where the parties were represented by counsel and where the parties take reasonable positions.
With respect to feedback on several other changes to Column C, the Committee noted that costs were intended to provide a party with between 30% and 50% of their actual legal expenses. On that basis, the Committee was not prepared to recommend that fees be allowed for background work which included steps such as organizing experts, answering undertakings, for cancelled Questionings, the service of documents or scheduling of trials. The Committee was mindful that parties may attempt to drive up their costs as a strategy in litigation and recommended not adding additional fee items which a party could seek to recover.
What this means for you?
The Committee’s proposed changes to Column C are not dramatic despite costs having been unchanged since 1998. The Committee is recommending an increase of approximately 35% in each of the existing columns which would come into effect on July 1, 2015. It was further recommended that a successful litigant be entitled to the increased schedule of costs regardless of whether a step was taken before or after July 1, 2015.
This post is intended to provide general information concerning developments in the law and is not intended to provide legal advice in respect of any particular situation.