When granting relief, a court may also make an order regarding costs. These cost orders can include:
- Party-and-party costs
- Attorney-and-client costs
- Attorney-and-own-client costs
- Costs de bonis propriis
- Wasted costs of interim proceedings
- Costs of interim proceedings reserved for later adjudication
- No order as to costs
Regardless of the court’s order, a client remains contractually liable to pay their attorney for work performed and disbursements incurred. These expenses, known as attorney-and-client costs, are recoverable by the attorney from the client under the terms of the mandate or fee agreement.
Where a cost award is granted in favour of a litigant, that award belongs to the party, not the attorney. The purpose of such awards is to indemnify the successful party for litigation expenses incurred because they were compelled to initiate or defend legal proceedings. However, these awards rarely provide full indemnification. Unless exceptional circumstances justify a stricter order, courts typically award costs on the party-and-party scale. This scale permits recovery only of those expenses from the losing party considered necessary and reasonable for securing justice or protecting rights.
The taxing master of the court determines which costs qualify for recovery under the relevant order. This assessment is guided by the applicable court rules and prescribed tariffs, which set out fees for, amongst others, consultations, court appearances, drafting pleadings, perusal of documents, and copying.
Once a cost award is granted, the attorney prepares a bill of costs – also referred to as a memorandum of fees and disbursements – and submits it to the taxing master. The taxing master reviews the bill with reference to the judgment or order, court rules, tariffs, and any objections raised by the opposing party. Items considered unnecessary – such as excessive client updates or non-essential correspondence and copying – are generally disallowed on a party-and-party scale. However, the client remains liable for these disallowed items under the attorney-client fee agreement.
Consequently, even where a court orders the losing party to pay costs on a party-and-party scale, the successful client will almost always remain responsible for part of their attorney’s fees. This is because attorney-and-client costs usually exceed the amount recoverable from the opposing party on a party-and-party basis. Once the party-and-party costs, as taxed by the taxing master, are recovered from the unsuccessful party, those funds are payable to the client.
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