Starting a lawsuit can be unpleasant, costly, and time-consuming.
The legal system is not intended for self-represented parties, but sometimes people have no choice but to represent themselves. Sometimes, self-represented parties lose their case. Sometimes, they prevail. Typically, when a party wins at trial, they receive compensation for damages, and also something called a costs award. The costs award is meant to offset legal fees.
But what happens when there are no legal fees because you handled it yourself? A recent court case in Ontario examined the principles that apply when deciding an appropriate costs award for someone representing themselves.
First, some background on the costs system.
The loser pays system
If you are successful in your case, either through a win or settlement, you are usually awarded costs to help pay your legal fees. There is a very good and thorough blog post on this topic here. If you lose your case, you may have to pay the other side’s legal costs.
This is the “loser pays” approach used by Canadian courts.
Under section 131 of the Courts of Justice Act, a judge has discretion to determine suitable costs, if any, to award at the end of the case (or any step in the process). Rule 57.01 of the Rules of Civil Procedure outlines factors the court will consider in exercising this discretion. The list of factors in Rule 57.01 is not exhaustive.
Costs awards should reflect what the court views as a fair and reasonable amount the unsuccessful parties should pay, rather than an exact measure of the actual costs to the winning party.
There are three main purposes of costs rules:
- to reimburse successful litigants for litigation costs;
- to promote settlement; and
- to deter and sanction inappropriate behavior by litigants.
Case study – costs for self-represented parties
In Ponnampalam v. Thiravianathan, both parties represented themselves in a motion. There is an established framework for evaluating costs claimed by self-represented litigants. They are generally only awarded to self-represented parties who show they devoted time and effort to do work normally done by a retained lawyer, and as a result, incurred an opportunity cost by giving up income-earning activity.
In this case, the plaintiff won the motion and asked the court for a costs award against the defendant. The plaintiff claimed an hourly rate of $150 and provided a time log totaling 108.15 hours of time spent on the motion. The time log was the basis for the costs claim.
The court did not accept the plaintiff’s calculation and identified the following concerns with the claimed costs amount:
- The $150 hourly rate was not justified. The plaintiff used a prior case stating rates for self-represented litigants are often $100 – $200 per hour. Although the court accepted the caselaw, in this instance the self-represented plaintiff did not explain why $150 was suitable within that range.
- The time log included significant administrative time like having affidavits commissioned, preparing forms, serving documents, and uploading materials online. Such administration time would not be recoverable by a represented party, so it is inappropriate to award it to a self-represented party.
- The court was not satisfied the plaintiff met the requirements to be entitled to costs based on the particular motion facts. There was no evidence the plaintiff gave up income-earning activity to pursue the motion.
Not providing specific evidence of lost opportunity costs does not completely prohibit the plaintiff from costs. The court can also consider whether a costs award may serve another purpose of costs. Costs always remain in the court’s discretion.
The plaintiff also asked if costs could be awarded to discourage and sanction the defendant’s poor conduct in the case. The defendant had disregarded or defied previous court orders. The Judge declined to award costs because the defendant had already been punished for this conduct. The Statement of Defence had been struck out with prejudice, effectively barring the Defendant from further participating in the case going forward. That is a severe consequence.
No costs were awarded in this case, although the plaintiff did recover disbursements.
Takeaway
If you ever find yourself in the unfortunate circumstances where you have to represent yourself at court, ensure you have kept track of your time spent working on your case and ensure you have gathered evidence demonstrating that you lost economic opportunities by representing yourself. As an example, if you had to turn down shifts in order to work on your case, be prepared to produce a note from your employer and/or a series of pay stubs to allow the court to understand your personal economic cost.
All in all, it is always best to hire a lawyer to protect your interests at court.
Victoria Edwards practices with the Siskinds Personal Injury department. If you have any questions about the information contained within this article or any other personal injury questions, please write to [email protected] or call her direct line 519-660-7848.