Creative Costs Awards
Judges have tried to simplify access to Charter litigation by taking a creative approach to costs awards.
What are Costs?
Costs are a monetary award that a judge may order one party pay to the other (or to the court) during or at the conclusion of a court action.
The traditional role of costs is to (at least partially) indemnify the successful party for some of the legal fees they incurred during the course of an action action. Thus, the unsuccessful party would be ordered to pay costs to the unsuccessful party. Costs also, however, have a long history of being used to implement broader policies. For example, costs are often awarded or refused to encourage settlement and to prevent vexatious litigation.
Costs awards are entirely discretionary, meaning that a judge has unfettered discretion to decide if costs are appropriate, who may be entitled to them, when they should be awarded, and how much should be given.
What are Interim Costs Awards?
Recently, judges have used their wide discretion to ease some financial burden that weighs on Charter litigants. One controversial method is known as advanced (or interim) costs awards. This allows a judge to award costs to a Charter litigant before the case is finished, to enable the recipient to fund their litigation. Advanced costs are controversial because it forces one party (typically a government entity in Charter cases) to pay another’s legal fees before the validity of the claim is decided.
What is the Test for an Award of Interim Costs?
When public interest litigation is at stake, an advanced costs award will be made if the following three steps can be proven:
1. The party seeking interim costs genuinely cannot afford to pay for the litigation.
2. The claim has merit to it and it is in the interests of justice to determine it.
3. The issues raised are of public importance.
What are the Important cases on Interim Costs Awards?
The leading case on advanced costs awards is British Columbia (Minister of Forests) v. Okanagan Indian Bands. Four Indian bands launched a summary application regarding their right to log on Crown lands. The British Columbia Minister of Forests applied to have the action converted to a trial format. The Indian bands argued that they lacked finances to go through an expensive trial. They sought advanced costs from the Ministry in the event they had to pursue a full trial.
The Supreme Court of Canada held that interim costs awards may be given in exceptional circumstances to increase access to justice and mitigate severe inequality between litigants (Okanagan Indian Bands at para 31).
In public interest litigation, special concerns can change the traditional rules around costs because there are other important policy objectives at play. In particular, it is important that ordinary people have access to the courts to determine their constitutional rights. These matters often are significant to the public at large, so the public interest is served by properly resolving these issues.
Even if these factors are made out, the ultimate decision still lies within the discretion of the trial judge.
2. Little Sisters Book & Art Emporium v. Canada (Commissioner of Customs & Revenue Agency, 2007 SCC 2 (CanLII) [Little Sisters No. 2]
The Okanagan case was a big victory for access to justice advocates. However, the Court significantly narrowed its scope 4 years later, in Little Sisters Book & Art Emporium v. Canada (Commissioner of Customs & Revenue Agency), commonly referred to as Little Sisters (No. 2). This was a follow up to a prior Supreme Court of Canada case on the discriminatory practices of Canada Border Service Agents. In Little Sisters (No. 2), the claimants argued that, despite their success in the earlier case, Canadian Border Service Agents continued act unconstitutionally and in contravention of the court's direction.
After having already gone to the Supreme Court of Canada on this issue once, the claimant could not afford to privately fund its second action. It applied for an advanced costs award.
The Supreme Court of Canada dismissed the application. It held that (contrary to what Okanagan may suggest) access to justice is not the paramount concern in awarding interim costs. Bringing an issue of public importance does not automatically entitle a litigant to preferential treatment with respect to costs (Little Sisters No. 2 at para 35).
The Court denied the claim because it viewed the plaintiff as an individual (as opposed to public interest) action. However, even if it was public interest litigation, this did not automatically entitle a claimant to an advance costs award. The Court is not going to take over the public inquiry process:
39 … The justice system must not become a proxy for the public inquiry process, swamped with actions launched by test plaintiffs and public interest groups. As compelling as access to justice concerns may be, they cannot justify this Court unilaterally authorizing a revolution in how litigation is conceived and conducted.
How else can Costs increase Access to Justice?
1. Denying Costs in Charter Litigation
Some judges are getting creative with costs awards by refusing to award costs against a losing Charter litigant. In Okanagan, the Supreme Court of Canada signalled that costs do not necessarily have to be awarded to a successful party, especially in public interest Charter litigation. Costs can be denied, or even awarded to the losing party (in the right circumstances). If costs were always awarded against unsuccessful Charter litigants, it would discourage ordinary people from pursuing claims.
2. Changing the Scale of Costs Awards
In addition, costs can be awarded on an advanced scale outside the normal guidelines. This happened in Victoria (City) v. Adams, 2009 BCCA 563 -- a case regarding a bylaw that banned homeless people from erecting nighttime shelters.
The Court of Appeal awarded solicitor-client costs to the successful claimant. This was unusual, because solicitor-client costs are typically only awarded as a punishment against a vexatious or unreasonable litigant. The City of Victoria had not acted improperly in the action. The Court of Appeal held that “notwithstanding the absence of reprehensible conduct... special costs are awarded as an instrument of policy to encourage access to justice.” (Victoria (City) at para 182).