Josephson Litigation Counsel

Recent Decision of British Columbia Court re Special Costs

Our firm recently obtained a decision from the British Columbia Court of Appeal that was in our clients' favour and also clarified the law for litigants in the future.

The central issue in the Appeal was the question whether pre-litigation conduct can be the basis for an award of special costs. 

It used to be that there was a generally-accepted principle in the area of costs awards at the end of litigation that special costs was reserved primarily (if not exclusively) for misconduct of the litigant in the course of the litigation process itself. Given that an Order of special costs was intended as a form of disapproval of conduct of the litigant, it made sense that the conduct that was disapproved of, would be conduct in the course of the litigation.

However, over the years, that principle was expanded by various decisions where Courts were seeking to find a way to register their disapproval of the conduct of the litigant by an award of special costs, even for conduct that had preceded the litigation.

As a result, for the purposes of special costs award, the line between "pre-litigation" conduct and conduct "during the course of the litigation" had become increasingly blurred.

The Court of Appeal, after a comprehensive review of the authorities, declared that a bright line can and should be drawn on this issue. The Court held that:

"In the result, I am of the view that a bright line can and should be drawn... Special costs should be reserved to punish and deter reprehensible conduct in the course of litigation. Pre-litigation conduct should not be considered in determining whether such an award is appropriate." 

This decision of the Court of Appeal can now serve as guidance to counsel and the Courts in this Province on the issue of special costs.

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