Legal Costs: The “other” costs to think about in litigation

costs fees money disbursements legal litigation

The Property "Blawg"

Everyone knows that litigation is expensive. At a minimum, parties who are engaged in a lawsuit can expect to spend tens of thousands of dollars, per year, just towards their own lawyer’s legal fees.

But what about the other costs of litigation? Most people consider their lawyer’s hourly rate when assessing the cost of a lawsuit, but few fail to take into consideration all the other costs that they may have to incur as part of the litigation process.

Below is a brief overview of some of the most common costs parties incur in a civil suit.

Adverse Costs

Generally speaking, Ontario has a ‘loser pays legal fees system’. Parties that are successful during a step in the litigation, such as on a motion or at the trial itself, can expect to have a portion, or sometimes all of their legal costs, covered by the losing side, as part of the Judge’s decision. Parties may even include payment of the other side’s costs as part of settlement negotiations.

These “cost consequences” are assessed at 3 different scales:

  1. Partial Indemnity — Anywhere around 40-60% of winning side’s legal costs are covered by the losing side
  2. Substantial Indemnity — Anywhere around 80% of winning side’s legal costs are covered by the losing side
  3. Full Indemnity — 100% of winning side’s legal costs are covered by the losing side

The likelihood of a winning party receiving their full indemnity costs is very low — it is typically granted in exceptional cases and mainly designed to discourage / punish especially egregious behaviour. Nevertheless, a losing party can still expect to pay a significant portion of the winning side’s legal fees at either the partial indemnity or substantial indemnity rate.

Experts perform an important function in the litigation process. They undertake an assessment of a specific issue in the litigation and provide a written report on their findings. Experts are usually retained to resolve the question of who caused a party’s damages, and how.

Experts are those with knowledge and expertise in an area that none of the other parties have knowledge in — not even the lawyers or the judge. Common types of experts that parties can expect to retain for a property-related matter include: Engineers, Architects, Accountants, Plumbers, Forensic Investigators, and more.

As part of preparing the written report, experts will conduct a site visit(s) of the property, and may use their trade equipment and tools to take samples and readings, if necessary. They will then prepare a written report setting out their findings. Finally, they may testify at a court hearing, if they are asked.

Expert services range from a few thousand to tens of thousands of dollars. But make no mistake — a lot of cases are won and lost on an expert and their report, if required, so you don’t want to skimp on the costs. Experts are the perfect example of “you got to spend money to make money”, and if you want to “make money” by winning your lawsuit, “spend it” on a good expert.

Expert Fees

Court Fees

Certain steps in the court process involve administrative fees that must be paid to the court. The court fees are the same for all civil proceedings in the Superior Courts Ontario (Family proceedings have their own fees, as does the Small Claims Court, which is conveniently broken down in this Guide to Fee Schedules published by the Ontario government).

Issuing a Statement of Claim or a Notice of Application sets the lawsuit in motion and costs $229 in court fees. Filing a Statement of Defence in response to a claim will cost you $183, and a Notice of Appearance filed in response to an application will cost $162 for the court fees.

Want to bring a motion? Be prepared to pay $320 to issue the Notice of Motion. Is your action finally ready to go to trial? You will most likely have to file a Trial Record, which will set you back $820 in court fees. Not happy with the trial decision? Starting the appeals process requires issuing a Notice of Appeal and will cost you $229.

*The above rates are current as at the time of writing of this post. Rates are set by the government of Ontario and are subject to change. You are encouraged to visit the Ontario government’s E-Laws website for the most current version of the relevant legislation that sets the rates for the court filing fees.

For most civil litigation, parties will engage in Examinations for Discovery and sometimes Mediation or Arbitration. These steps are usually conducted at Court Reporting centres, such as Victory Verbatim in Toronto, Nimigan Mihailovich Reporting in Hamilton, or GKA Reporting Group in Kingston*, with costs varying depending on how many days you need a room for and the number of parties that will be attending.

For the discovery process, parties can expect to also pay for the court reporter’s services and for the costs of obtaining transcripts of the examinations, an official, stamped copy of which is usually filed with the court. For mediations and arbitrations, parties can also expect to pay for the mediator’s or arbiter’s fees.

*Uncharted Legal has no affiliations with any of the court reporting centres listed above, and does not endorse, advocate, or advertise for the use of any third party service providers listed above. The court reporting centres are merely provided as examples.

Court Reporting Services

Printing & Binding

Courts expect official documents to be printed and bound in order to be filed. The Rules of Civil Procedure include instructions for preparing court documents, including setting out the size font you can use, the size the pages must be, even the colour the front and back covers have to be for certain documents.

Printing & binding costs can cover a wide range, depending on the page count for your court documents, as well as how many copies are needed.

Currently, due to the ongoing COVID-19 situation, most Ontario courts have suspended or severely restricted in-person court filings, and are primarily accepting Word and PDF electronic copies of official court documents for filing. As such, right now parties are not having to incur this cost. Time will tell whether the courts revert back to their paper-based ways.

Yes, you can expect to pay taxes on top of pretty much all of the above costs (excluding the Court Fees). This can add up quickly, particularly for lawyer’s fees and expert fees, and might represent hundreds or even thousands of dollars in additional costs.

Taxes (HST)

No bones about it — Litigation is expensive. Most of the costs listed above are unavoidable, and there are other expenses that will come up in the course of your case. 

The silver lining is that litigation is a structured and slow process. The costs will be spread out over years and won’t deplete your wallet all at once. This gives you the opportunity to be proactive and be prepared. 

Budget accordingly by having your lawyer prepare a Litigation Budget that sets out the estimated costs of your specific case near the beginning of their retainer. Consider obtaining a loan / line of credit to ease the immediate financial burden of litigation. Or open a high-interest savings account that is just for your legal costs, making regular deposits so that when the time comes to hire an expert, for example, you’ve already got most, if not all, of the costs covered.

Whatever you do, don’t bury your head in the sand, hoping the problem will take care of itself. The costs are going to be there whether you like it or not, so get ahead of it and keep yourself informed. An informed and prepared client is the best client a lawyer could ask for.

 

Maja Milosevic

The Property “Blawg” and the above article are for general informational purposes only. The information contained in the above article is not legal advice and is not intended to be treated as providing legal advice. The circumstances of your case are unique and the above information may have no bearing for your situation.

Reading this article does not create a lawyer-client relationship with the author of this article, Maja Milosevic, or with the firm, Uncharted Legal Consulting.

Do not consider the above article, or the Property “Blawg” in general, to be a substitute for obtaining legal advice from a qualified and licensed lawyer in your home province.

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