Legal Costs Recoverable May be Capped

The Succession & Probate List Practice Note provides that:

Orders may be made capping the costs that may be recovered by a party in circumstances including, but not limited to, cases in which the net distributable value of the estate (excluding costs of the proceedings) is less than $500,000.

This means that even if the Court orders that the successful party’s legal costs be paid either out of the estate or by the unsuccessful party, it may make an order capping (limiting) the amount of costs which may be recovered and leaving the successful party ‘out of pocket’ for some of its legal costs.

Making a Costs Capping Order

When will a Costs Capping Order be Made?

In determining whether or not to make a costs capping order, and the amount of the cap, the Court will look at the matter on an impressionistic basis, taking into account:

  • whether the costs are excessive having regard to the nature of the case, the size of the estate and the amount claimed;
  • the conduct of each party in running the matter – whether they occasioned unnecessary delays or incurred unreasonable costs, or whether they acted efficiently to narrow the issues and shorten the time for hearing; and
  • the relative size of the plaintiff’s and the defendant’s legal costs – comparing the unsuccessful party’s costs, where it was acting reasonably and without over-servicing, with the successful party’s costs (on the assumption that the required work should have been approximately equal).

How will the Court Determine the Amount which Costs are Capped at?

The amount of the cap is a matter for the Court’s discretion and will be determined with regard to the circumstances of the case. But a usual rule of thumb is that the award of costs will not be greater than the provision awarded out of the estate. For example, if the plaintiff is awarded a legacy of $50,000 the costs may be capped at $50,000 notwithstanding that the plaintiff costs were $200,000.

DISCLAIMER: The information provided above is published for general informational purposes only and is not intended to be nor should it be relied upon as a substitute for legal or other advice.