Who Pays the Legal Fees?

A significant concern before starting a lawsuit is who will pay the legal fees and disbursements of the court case at the end of the case.

In most litigation, the general rule applies that costs are awarded to the successful party. The costs would be a small portion of the actual legal fees based on the amount of work completed in the lawsuit. The disbursements usually amount to most of the lawyer’s expenses such as photocopies, Court filing fees, facsimiles, etc.

In estate litigation there can be an award of costs in favour of a completely unsuccessful party against a completely successful party. In proceedings for the construction of Will, some examples are:

• cases where the validity of a Will is in issue;
• cases where the capacity of the testator to make a Will is in dispute; and
• cases where the meaning of a Will is in issue.

Awarding costs to the unsuccessful litigant is based on grounds of fairness. Where the matter in question must be litigated to remove all doubts, then all interested parties must be joined and are entitled to be heard and should not be out of pocket if the litigation does not conclude in their favour. The estate must bear the cost of settling disputes as a cost of administration. This is the reasoning which underlies such cases as Re Dingwall (1967), 65 D.L.R. (2d) 43 (Ont. H.C.); and McNamara v. Hyde, [1943] 2 W.W.R. 344 (B.C.C.A.); and Re Lotzkar Estate (1965), 51 W.W.R. 99 (B.C.C.A.). The question to be asked in such a case is whether or not the parties were forced into litigation by the conduct of the testator or the conduct of the main beneficiaries.

Litigation that does not relate to the validity of the Will, the capacity of the testator or the construction of the Will is treated differently. For example, in an unjust enrichment lawsuit or in a Will Variation Act lawsuit, costs usually flow to the successful litigant only. The reason being, there are no doubts to be settled. The remedies provided by such legislation are directed to the maintenance and support of the dependants of the testator and are based on public policy. The legislation does not invalidate the Will, it merely permits the Court to vary the provisions made by the testator. Therefore, an unsuccessful action under such legislation cannot be said to have been caused by a testator, or to have been necessary to enable the estate to be distributed. The action does not benefit the estate.