What Are Court Costs and Who Gets Them in a Divorce Case?
Camille Boyer, Calgary Family Lawyer
In family law and Divorce litigation, you can be awarded “costs”, also known as “court costs” if you are successful in court. However, this also means that you could end up having to pay your ex-spouse a costs award if you lose. The reasons a Judge may award court costs can vary but, generally speaking, there are 2 main goals of granting costs: encouraging settlement and/or compensation for legal fees.
Costs are moneys to be paid by one side of a legal dispute to the other after a court hearing like an application or a trial. Cost are paid to the winner by the losing party. The amount of costs is determined by the judge but it is based on the Rules of Court or the discretion of the judge.
Alternative dispute resolution and settlement out of Court is strongly encouraged by Judges. Litigation is not only draining and stressful to those going through a separation or divorce; the Judges, clerks, assistants, court security, and various other resources which are already constrained by tight budgets are further extended by significant or time-consuming court applications. Further, and particularly when children are involved, it is well accepted that a family will move on and heal faster from separation or divorce if the matter is not drawn out in a lengthy court battle. As a deterrent to frivolous litigation, the Judge in a family law case may award court costs against the losing spouse in an application or trial. The rationale here is that parties to litigation will be encouraged to attempt settlement before going to court and risking not only a loss, but a costs award as well.
Moreover, going to court costs everyone time and money. A costs award can help offset the financial losses incurred by a successful party to a family law action. In the Canadian legal system, there is a financial reward in the form of costs to the successful party because they had to spend time and money in order to receive what they were entitled to and, therefore, they should be compensated. However, a litigant in family law or any case will very rarely be compensated for all or even most of their legal expenses. Usually, the costs award will be quite nominal compared to the expense incurred.
While the Court does have discretion when awarding costs, that discretion is often exercised with reference to Schedule C to the Alberta Rules of Court. Schedule C sets out the various types of Court Applications and appearances a successful party may be entitled to a costs award for. It is only in the most rare circumstances that the Court will order one party to pay the other’s full legal costs. There would need to be an element of bad faith amounting to “reprehensible, scandalous, or outrageous conduct” in the divorce litigation in order to justify a full indemnity of another party’s legal fees (2012 ABQB 165). Costs awards are meant to deter unmeritorious claims and compensate successful parties for a portion of their legal fees, but not to deter all litigation or compensate all successful litigants completely.
Even more rarely, the Court may exercise its discretion to order payment of costs by a lawyer to the winning party, rather than ordering the losing client to have to pay. The threshold for such an award is incredibly high, and such orders are almost unheard of. In order for the Court to direct a lawyer to pay costs to a party to the litigation, the Court would have to find that the lawyer engaged in “serious misconduct”, which includes frivolous actions which are clearly an abuse of the justice system, or deliberately dishonest or malicious conduct (2017 ABQB 530).
Generally, when addressing costs in a family law or divorce case, the Court will look at factors such as the degree of success, the complexity of the litigation, and the monetary value of the case. Some additional considerations which could increase or decrease a costs award include if either party made any formal offers to settle, if either party was extremely unreasonable or engaged in scandalous and reprehensible conduct regarding the litigation, or if the litigants were parties to a contract, such as a Separation Agreement or Prenuptial Agreement, which sets out enhanced entitlements to costs following litigation.
It is also very possible that, even though a party won in Court, the Judge could refuse to award any costs. Ultimately, the question of whether to award court costs and how much to award lies within the Judge’s discretion. The lawyers at Crossroads Law have significant experience with costs applications and have recently had success in receiving full solicitor client costs in arbitration and at the Court of Appeal. To schedule a consultation regarding your case, contact us at info@crossroadslaw.ca or by phoning 1-877-445-2627.
