Who Should Pay for Public Interest Litigation?

From time to time, local governments become involved in litigation that may be considered “public interest law”; that is, the answer to the legal question in dispute is unclear and the determination of the matter will serve the public interest in some way. If an important and complicated case should go to court but one party cannot proceed because of a lack of resources, then concerns about access to justice necessarily arise.

The law in Canada about public interest litigation costs has seen a greater willingness of the courts to award costs to the public interest litigant. However, an award of public interest costs remains the exception, rather than the rule.

In 1989, the Ontario Law Reform Commission in its “Report on the Law of Standing”  provided a number of criteria that courts should consider when determining whether public interest costs should be awarded. These criteria have since been considered and applied in a number of British Columbia cases.  The criteria are as follows:

(a)      The proceeding involves issues the importance of which extends beyond the immediate interests of the parties involved.

(b)      The person has no personal, proprietary or pecuniary interest in the outcome of the proceeding, or, if he or she has an interest, it clearly does not justify the proceeding economically.

(c)       The issues have not been previously determined by a court in a proceeding against the same defendant.

(d)      The defendant has a clearly superior capacity to bear the costs of the proceeding.

(e)      The plaintiff has not engaged in vexatious, frivolous or abusive conduct.

Most recently, Madam Justice Beames of the BC Supreme Court provided a short discussion of special interest costs in her decision on costs in West Kelowna (District) v. Newcombe, 2013 BCSC 2299 (for details of the court’s decision on the substantive issues see Michael Hargraves’ article, “The Shifting Tides of Constitutional Law in British Columbia,” in the Fall 2013 LoGo Newsletter).

In Newcombe, the defendant argued that costs should not be awarded against him, even though he was not the successful litigant.  He said that his case was an example of public interest litigation, worthy of a deviation from the normal rule that costs follow the event. Without question, this was an important case and the court’s analysis will provide greater certainty on an issue of importance, not only to the District of West Kelowna and Mr. Newcombe, but to local governments and boaters across the province. However, Madam Justice Beames was not satisfied that the normal rule regarding costs should be deviated from. Her primary analysis was as follows:

“I accept that the issue of the constitutionality of the Licence of Occupation and the W1 Zone regulations is a matter of interest beyond the immediate interests of the parties. However, I conclude that the interest of the public at large was not engaged so much as the interest of a defined group of people, namely, those who might wish to boat within the waters that form part of the District of West Kelowna.

I also conclude that the respondent had a pecuniary interest in the outcome. He does not currently have marina moorage for his vessel, and had he succeeded in his constitutional attack, he would not have been put to the expense of obtaining marina or other moorage for his vessel nor to the cost and inconvenience of removing his vessel from the lake at times he is not using it.”

The decision in Newcombe decisions may yet be appealed.  However, Madam Justice Beames’ analysis indicates that courts remain hesitant to depart from the normal rule of costs unless very special circumstances can be shown, including that the claimant does not have a significant pecuniary interest in the outcome.  Given that most litigants do have a pecuniary interest in the outcome of their case, this remains a difficult test to satisfy.