4.29: Costs consequences of formal offer to settle
10.29: General rule for payment of litigation costs
10.31: Court-ordered costs award
10.33: Court considerations in making costs award

Case Summary

The Defendant successfully defended an action for wrongful dismissal and sought party-and-party Costs against the Plaintiff based on 50% of its solicitors’ bills plus reasonable disbursements.

Justice Poelman referred to Rule 10.29(1) and stated that a successful litigant is presumptively entitled to costs. There is a reasonable expectation that an unsuccessful party is expected to compensate the successful party even where the unsuccessful party acted reasonably throughout the litigation.

Party-and-party costs, which are costs awarded between litigants, fall intro three broad categories: (a) partial indemnity under the Schedule C tariff, (b) solicitor-client costs, and (c) solicitor-and-own-client costs.

Justice Poelman relied upon McAllister v Calgary (City), 2021 ABCA 25 to state that the weight of recent authorities typically limits the party-and-party costs of a successful litigant to 40 to 50% of actual costs. The 40 to 50% guideline strikes a balance between fully compensating a successful litigant and the “chilling effect” of a cost award on an individual who was unsuccessful in claiming against a major corporation.

In making the cost award, Justice Poelman considered the following factors in Rule 10.33(1): (a) result of action and success of either party; (b) amount claimed and amount recovered; (c) importance of issues; and (d) complexity of the action. The main factors were that the amount claimed was not large and the issues were not complex. Combined with the fact that the parties were far from equal in their resources, Justice Poelman held that costs based on 40 to 50% of the Defendant’s legal fees would be excessive in this case, and instead awarded costs under Schedule C, Column 3.

View CanLII Details