Imagine that you have a very good case against a large player.
Maybe your case is against the government for something terrible it did. Maybe it is against a large corporation for wrongful dismissal or some other wrong. Maybe it is against a professional with deep pockets who was negligent.
In each of these cases, you are akin to David, battling Goliath. And, Goliath has armies of lawyers who may try to pull out every trick in the book to encourage you to walk away from your case.
In the beginning, it is very likely that you will be told that if you pursue your claim, the other side will “seek costs against you.”
It is a phrase that is intended to strike in you the fear of losing everything. Having to sell valuable assets, just to pay the cost bill at the end of your litigation. A cost award is a specific amount, separate from the amount in issue in the proceeding, that is awarded as a contribution toward legal costs.
The main decision is made first, and followed by a possible costs award.
The idea behind it is to allow the successful party to obtain some contribution toward the costs they have incurred. If, for example, you seek $150,000 in your claim, and you are awarded $150,000, then in this example, you would be considered to have been successful.
A cost award does not normally reimburse a party for all legal costs. You may have legal costs of $50,000, but only be awarded $15,000 in costs, or some other amount. Sometimes, higher awards are made.
In certain circumstances, it is possible for a cost awards to be made even against the winning party. Rarely is a party 100 per cent certain, even with an extremely strong case, that they will necessarily carry the day. The chances may be good, but there are no guarantees.
Whether or not the threat is actually realized it there is no doubt about it, cost awards are a threat.
If you are unsuccessful, then you risk a cost award being made against you. The amount can be significant to an individual. Of course, if you win, you can seek a cost award against the losing party.
But, the threat is not the same. An individual’s costs, even at a full indemnity rate, will still be only a drop in the bucket to a large player who loses its case. No sale of assets is required, for them.
Our rules regarding cost awards are a hurdle to individuals’ and smaller players’ access to justice.
This one concept within our justice system allows big players to take advantage of smaller parties’ vulnerabilities. It can also allow objectionable behavior that should be held to account to continue, unabated.
Our courts recognize that access to justice is one of the biggest issues facing our justice system today.
Those without wealth are particularly vulnerable to the threat of a cost award —those who earn too much to be eligible for legal aid, but not enough to be able to absorb the impact of a cost award.
If we truly want to improve access to our justice system and have a more even playing field, it is important that we take a good, hard look at our rules regarding costs.
The content of this article is intended to provide very general thoughts and general information, not to provide legal advice. Specialist advice from a qualified legal professional should be sought about your specific circumstances.
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