How much does it cost to sue someone in Canada? A civil lawsuit cost worked example

Suing someone in Canada costs what each stage of the lawsuit costs, added up: a demand letter may be a few hundred dollars, a claim that settles after documents and examinations for discovery often runs into the tens of thousands, and a case that goes through trial can cost several times that. The cost is driven by hours per stage, who does the work, disbursements such as expert reports and transcripts, and sales tax, minus any costs award you recover if you win. The worked example below prices a mid-sized contract claim in Ontario's Superior Court, stage by stage, so you can see where the money goes and when settling makes financial sense.

This guide is part of the hiring a lawyer cost checklist. Every figure is an illustrative example; your lawyer's estimate replaces it.

The case

A small company is owed $180,000 under a supply contract and the buyer says the goods were defective. The claim is over the $50,000 Small Claims limit, so it goes to the Superior Court of Justice. Claims up to $200,000 can use the simplified procedure (Rule 76), which limits discovery and trial length; here the lawyer recommends it. Rates: partner $450, associate $280, clerk $140. HST 13%.

Stage-by-stage estimate

Each fee cell is hours x rate for each person. Check stage 3: 2 x $450 = $900; 18 x $280 = $5,040; 12 x $140 = $1,680; total $7,620.

Adding tax

Assume HST applies to fees and to all disbursements except $1,000 in court fees over the whole case.

• To mediation: taxable amount $27,010 + $11,750 - $600 (court fees to that point) = $38,160. HST = $4,960.80. Total = $27,010 + $11,750 + $4,960.80 = $43,720.80.
• Through trial: taxable amount $54,690 + $14,450 - $1,000 = $68,140. HST = $8,858.20. Total = $54,690 + $14,450 + $8,858.20 = $77,998.20.

So the company would spend roughly $44,000 to reach mediation and roughly $78,000 to finish a trial.

Factoring in a costs award

If the company wins at trial, the court will usually order the buyer to pay part of its costs. Ontario awards are commonly made on a partial indemnity scale, which practitioners often describe as covering well under the full bill; substantial indemnity is defined in the Rules of Civil Procedure as 1.5 times partial indemnity and is usually reserved for situations such as beating your own formal offer to settle or serious misconduct. In simplified procedure cases, the Rules also cap the costs that can be awarded. Assume, for illustration, that the award covers 45% of the trial total.

• Recovered costs: $77,998.20 x 0.45 = $35,099.19.
• Net cost of winning: $77,998.20 - $35,099.19 = $42,899.01.
• Net recovery: $180,000 - $42,899.01 = $137,100.99, assuming the buyer can pay.

If the company loses, it pays its own $77,998.20 and may be ordered to pay part of the buyer's costs, perhaps $30,000 to $40,000 in this example: a total loss of over $100,000.

Settlement arithmetic

At mediation, the buyer offers $130,000 all-in.

• Accept: $130,000 - $43,720.80 = $86,279.20 net, certain and immediate.
• Go to trial: perhaps a 65% chance of winning about $137,101 net, and a 35% chance of losing about $108,000 (own costs plus $30,000 adverse costs).
• Expected value: 0.65 x $137,101 + 0.35 x (-$108,000) = $89,115.65 - $37,800 = $51,315.65.

On these assumptions, accepting the offer is clearly better than the gamble. The probabilities are yours to estimate with your lawyer; the point is to do the arithmetic before deciding. A formal offer to settle under Rule 49 can also shift costs consequences if the other side refuses it and does worse at trial; see how costs awards work.

What makes a lawsuit cost more

• Motions: each contested motion can add a significant number of hours.
• Document volume: large email sets mean more review time.
• Experts on both sides: reply reports and cross-examination.
• Delay: rescheduling and re-preparing.
• An opponent with deep pockets who litigates every point.

Province notes

• British Columbia: in BC Supreme Court, costs follow a tariff of units (Appendix B to the Supreme Court Civil Rules), and fast track litigation under Rule 15-1 has its own limits.
• Alberta: costs are often assessed using Schedule C of the Alberta Rules of Court; claims up to $100,000 can be brought at the Alberta Court of Justice instead.
• Quebec: legal costs (frais de justice) awarded to the winner do not normally include lawyers' fees; you usually pay your own lawyer whatever the outcome, except in cases of abuse of procedure or a significant breach in the conduct of the proceeding.
• Ontario reforms: Ontario has been reviewing its civil rules with a view to major changes in how cases move through the Superior Court. Check the Ontario courts and Ministry of the Attorney General websites for any new rules in force before relying on this stage model.

Use the litigation budget estimator for each stage of your own case.

Frequently asked questions

How long does a civil lawsuit take?

Months to several years, depending on the court, the procedure and whether it settles. Delay itself costs money in re-preparation and interest.

Can I recover my legal fees as damages?

Usually not as damages. Recovery of legal costs is through a costs award, which is discretionary and partial.

Should I sue if the defendant has no money?

Probably not. A judgment you cannot collect is a loss. Ask your lawyer about asset searches before you spend heavily.

Are expert fees recoverable?

Reasonable disbursements, including expert fees, are often included in a costs award if you win, subject to the court's discretion.

Sources

• Ontario Courts — Superior Court of Justice civil procedures and practice directions
• Ontario e-Laws — Rules of Civil Procedure, including Rules 49, 57 and 76
• Courts of British Columbia — Supreme Court Civil Rules and costs
• Alberta Courts — Alberta Rules of Court
• Éducaloi — legal costs in Quebec civil cases
• CanLII — costs decisions in similar cases