Deterrence Not Damages: The Punitive Rationale For Solicitor-Client Costs

ABSTRACT

This article discusses the proper use of solicitorclient costs in Canadian law. Traditionally, such costs were used to censure misconduct in litigation, not to compensate the victor. However, recent decisions from the liability insurance context offer a growing departure from this consensus. Such decisions have used solicitor-client costs not to condemn scandalous behaviour, but to preserve an insured's award of coverage from dilution by legal fees. The recent British Columbia decision in Tanious v. Empire Life Insurance Co., [2017] B.C.J. No 85, 2017 BCSC 85 marks the latest expansion of this trend, awarding full indemnity costs to a disability insurance claimant despite no misconduct by the defendant insurer.