Costs are traditionally awarded to compensate victorious litigants for expenses incurred in prosecuting or defending a legal claim. The rules governing costs awards in British Columbia will be substantially amended as of July 1, 2016. These amendments will affect costs for all cases settled or tried after that date.

The amendments to the rules are an attempt by BC lawmakers to provide increased clarity and consistency in costs awards. Costs will be limited and fixed for specific items, certain costs will be increased and some costs will be eliminated.

Amendments to the costs tariff (the “Tariff”) include the elimination of the “scale of costs” as a means to assess costs. Rather than a scale of costs described as “A,” “B” or “C,” the rules will specify an assessment of costs based on the difficulty of the case, now described as “less than ordinary difficulty,” “ordinary difficulty” or “more than ordinary difficulty.”

Tariff items will be consolidated from 48 items to 13 items and will no longer assign a number of units for certain items. Rather, Tariff items will prescribe fixed dollar amounts claimable by a party for that step in the litigation.

A party will no longer have discretion in claiming costs where a Tariff item is expressed in terms of number of days of attendance. For example, costs will be fixed at $1,000 for attendance at case planning conferences and mediation for each half-day.

A party will have two or three costs options for some Tariff items, including Tariff items 1 (correspondence), 3 (process for giving or obtaining discovery), 9 (preparation for and attendance at trial), and 12 (written argument at applications). The discretion in entitlement is based on the difficulty of the case; the more difficult the case, the higher the costs allowed.

There will also be substantial changes to the rules governing costs for default judgment and applications. Costs awarded for default judgment will be increased relative to the value of the judgment obtained.

With respect to applications, the entitlement to costs will not be assessed on a scale. Rather, for each half day of attendance, the successful party will be automatically entitled to a costs award of $1,000. If the application is unopposed, the successful party will be automatically entitled to a costs award of $500.

Tariff costs rarely cover the successful party’s actual costs. In the past, party and party costs have only partially reimbursed a party for expenses incurred during litigation. Lack of full indemnity for actual legal costs may have reflected the court’s attempt to strike a balance between the right to compensation and encouraging access to the courts.

Through these amendments, by setting dollar amounts for the Tariff items and increasing certain costs above the limits currently allowed, a successful party may now recoup more of their costs than before.

The implication for at-fault defendants, of course, is that claims may now cost more to settle and hear through trial. To the extent insurers can negotiate settlements inclusive of costs, they should endeavour to do so to achieve some costs-savings.