Frequently Asked Questions: Civil Litigation

What costs can the successful party recover?

Costs are normally awarded to the successful party (or parties) against the unsuccessful party (or parties). If the plaintiff obtains judgment, the defendant against whom judgment is granted will normally be required to pay costs to the plaintiff. If the action is dismissed against a defendant, normally the trial judge will require the plaintiff to pay costs to that defendant. In cases where the action is dismissed against one defendant but allowed against another defendant, the trial judge will usually require the unsuccessful defendant to pay the costs of the successful defendant. The costs of an interlocutory application (an application on a procedural matter arising before trial) are payable by the party who is unsuccessful on the application to the party who is successful, regardless of the final result of the action (unless the master or justice who hears the application makes another order as to costs).

The trial judge has discretion to determine the amount of any costs awarded. However, the fee portion of those costs is usually determined on the basis of Schedule C of the Alberta Rules of Court, which sets out costs for various steps in civil actions. In Schedule C, the costs are set out in 5 columns that relate to the amount of the judgment granted (when the plaintiff obtains judgment) or the amount claimed (when the action is dismissed). The costs increase as the amount of the judgment (or claim) increases. The costs awarded usually include the reasonable and proper expenses incurred in the action by the party to whom costs are awarded. Plaintiffs have no means of controlling the expenses that defendants incur. 

Can offers to settle affect the costs awarded?

Offers to settle made under the compromise rules (of the Rules of Court) may affect the amount of costs that are awarded. If the plaintiff makes a reasonable offer to settle and recovers a judgment for more than the amount of the offer, the fee portion of the costs awarded to the plaintiff will be double the fees set out in Schedule C, for all steps that occurred after service of the offer. The trial judge determines whether the offer was reasonable given a number of different factors. If a defendant makes an offer under the compromise rules to pay an amount in settlement of the claim and the plaintiff recovers a judgment against that defendant in an amount less than the offer, the defendant will be awarded costs for all steps that occurred after service of the offer if the trial judge determines that the offer was reasonable. If the action is dismissed entirely, the fee portion of those costs will be double the fees set out in Schedule C.

How is a judgment for costs enforced?

The ability to enforce a judgment for costs (or any other judgment) depends on the realizable value of the assets of the enforcement debtor (the person against whom the judgment has been granted) that are not exempt from writ proceedings. Assets that are exempt from writ proceedings are set out in Section 88 of the Civil Enforcement Act and Section 37 of the Civil Enforcement Regulation.

How do unpaid costs affect bankruptcy?

A plaintiff who cannot pay a judgment for costs may be petitioned into bankruptcy or may be forced by financial circumstances to assign into bankruptcy. The unpaid costs may be grounds for dismissal of an application for an order discharging the plaintiff from bankruptcy.