Award Of No Costs A Cautionary Tale For Defendants Of Class Actions

• Published date: 25 March 2021
• Subject Matter: Litigation, Mediation & Arbitration, Class Actions, Trials & Appeals & Compensation
• Law Firm: McCarthy Tétrault LLP
• Author: Canadian Class Actions Monitor, Cassidy Thomson and Connor O'Brien

In the recent decision of Elder Advocates of Alberta Society v Alberta Health Services, 2021 ABCA 67, the Alberta Court of Appeal put to bed a class action that spent over 15 years in various levels of court, in confirming that the Plaintiffs did not have to pay any costs to the Province of Alberta and Alberta Health Services (collectively, the "Defendants"), even though the Defendants were entirely successful in their defense.

Background

In 2003 the daily charge for a semi-private room in a nursing home or auxiliary hospital in Alberta increased. Subsequently, the Elder Advocates of Alberta Society together with an individual (the "Plaintiffs") filed a proposed class action against the Defendants on behalf of long-term care facility residents. The Plaintiffs' law firm agreed to indemnify the Plaintiffs for any award of costs against them.

The certification process spanned 2008 to 2011, and included two Court of Appeal decisions and one decision by the Supreme Court of Canada.¹ Following certification, in 2018 the class action was ultimately dismissed on the merits.² In 2019, the Plaintiffs unsuccessfully appealed,³ and were denied leave to appeal to the Supreme Court of Canada.⁴

Needless to say, the costs for both Plaintiffs and Defendants ran quite high. The Defendants sought approximately $2.3 and $2.9 million, respectively, in costs (although unclear from the decision, it is likely that the Defendants' actual legal costs were much higher).

In 2020, the Alberta Court of Queen's Bench declined to award costs to the Defendants, despite their complete success.

Key Principles

The Court of Appeal noted that Alberta's approach to costs in class action proceedings is different from many other provinces. Some provinces have adopted a "no costs regime" where costs are not awarded to either party in class actions but for a special order of the court, and other Provinces have funds that exist to help representative plaintiffs pay for the costs of commencing an action and pay any costs awarded against them. But this is not the case in Alberta.

In Alberta, legislation directs the court to determine costs as provided by the Rules of Court. There is no fund to assist representative plaintiffs with costs. Thus, an unsuccessful plaintiff will usually be required to pay costs in accordance with the general rule that costs follow the event. This has been characterized by the Court of Appeal as a "policy choice" of the Alberta Legislature.⁵

Nevertheless, where the...