Background & purpose of the system 1 basic institutions, processes, and players 3

Rule 49

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  This rule limits the discretion around costs (r.131, factors in r.57) in a particular way
  
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  purpose: if we think settlement is a good idea, want to incentivize people to settle and make a reasonable offer. If you make an offer to settle and meet / beat it, costs will be awarded in your favour
  
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  Offer must be made at least 7 days before trial to take benefit of cost consequences (r. 49.03)
  
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  Assumed to be “without prejudice” (r. 49.05) – can’t use against the party later
  
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  Cost consequences of failure to accept (r. 49.10)`
  
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    Triggers when
    
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      (a) offer to settle made at least seven days before trial
      
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      (b) is not withdrawn and does not expire before trial
      
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      (c) is not accepted by the P/D
      
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    Then
    
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      Where a plaintiff makes an offer to settle that is refused and subsequently obtains a judgment that is as favourable or more favourable than the offer, the plaintiff is entitled to partial costs from the outset of the lawsuit to the date the offer was served, as well as substantial costs from the date the offer was served to the end of the proceeding.
      
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      Conversely, where an offer to settle made by a defendant is refused and the plaintiff subsequently obtains a judgment that is only as favourable or less favourable than the terms of the offer, the plaintiff is entitled to partial costs from the outset of the lawsuit to the date the offer was served, and the defendant is entitled to partial costs from the date the offer was served to the end of the proceeding.Incentive not only to make an offer but to do it early
      
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        For both note: unless court orders otherwise (retains inherent jurisdiction). Can still argue not reasonable and fair for court to invoke rule 49.10 consequences.
        
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  See Oak Incentives, Elbankhiet and Smith for examples
  

FEES

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  Regardless of a costs order in a proceeding (above), a client will typically be required to pay the legal fees of his or her lawyer (based on their agreement)
  
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    Fees refer to the actual amount a client is charged by his/her lawyer (regardless of if they get costs, win, settle etc)
    
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    Based on agreement between lawyer and client (“retainer agreement”)
    
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  Market driven but subject to RPC r. 3.6-1 (“fair and reasonable”); regardless of costs, clients typically have to pay
  

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  Agreements often include
  
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    legal fees (/hr)- amount lawyer charges per hour for rendering legal services and
    
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    disbursements (specific charges/expenses for copies, courier, travel etc) (Mulroney)
    
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  Various approaches: hourly rate, flat fee, contingency, etc. (McIntyre)
  
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    Various approaches often map onto different practice contexts- e.g. flat fee -> real estate closings
    
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    Other: Third party funding (more typical in class proceedings)
    
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    Historically, champerty and maintenance prevented others from getting involved in litigation (maintaining
    

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  Contingency fees are a chip away at this (law firms take the risk)
  
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  Now, third party funding and other innovations are starting to shift the landscape
  
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  Class Proceedings Act, ss. 32-33: regime unto itself because there are a number of people impacted beyond the parties