Substantial Indemnity Costs In The Context Of Liens

Parties to construction contracts should be attentive to the potential for substantial indemnity costs in lien proceedings, recognizing the significance of recoverable litigation costs. The courts have the authority to award costs on a substantial indemnity basis when certain criteria are met, based on factors like breach of contract, refusal to pay as promised, and unsubstantiated claims.

Recoverable costs in litigation are always a concern, given how expensive protracted, contested litigation can be. A common question is whether a party can recover all or substantially all the incurred fees.

The Court in Benoit Const. v. Bawa and Hard at Work considered how s. 86(1) of the Ontario Construction Act provides the ability to award costs throughout lien proceedings on a substantial indemnity basis. Similar, but not identical, language is found in the Alberta Prompt Payment and Construction Lien Act, and the Ontario decision provides helpful guidance on when