Cost Basics in Ontario

Motions for costs arise with extraordinary frequency in Ontario, so it is helpful to revisit some basic concepts as illustrated by Brock v. Sorger, 2016 ONSC 1498.

Costs serve three main purposes: to indemnify successful litigants, to encourage settlement, and to sanction unreasonable behaviour by litigants (Fong v. Chan (1999), 46 O.R. (3d) 330, at para 22).

Cost awards should reflect what the Court deems to be a fair and reasonable amount that should be paid by the unsuccessful party (Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 at para 24). The actual amount incurred by the successful litigant is of course relevant, but not determinative (Delellis v. Delellis, 2005 CanLII 36447 (Ont. S.C.).

Determining who was successful is not always a straight forward task. Some issues are, not surprisingly, more significant than others (Brennan v. Brennan, 2002 CanLII 2742, at para 3 (Ont. S.C.).

Rule 24(11) of the Family Law Rules establishes factors the court considers in determining costs, including: the importance, complexity, or difficulty of the issues; each parties’ behaviour; the lawyers’ rates; the lawyers’ preparation; expenses paid and so on.

Offers to settle impact cost determinations. Under Rule 18, if a party does as well or better than an offer they made, they are entitled to full recovery effective the date of the offer if it is not accepted by the other side.

In strategizing, counsel should plan very carefully to obtain the most favourable cost consequences for clients.