With the ongoing discussion around artificial intelligence (AI) and its implications for the law, we wanted to revisit two interesting Ontario cases and discuss AI, law, and costs in civil litigation

Before jumping into the case, we will provide a brief refresher on both AI and legal costs. 

What is AI? 

It’s hard to provide a one-size-fits-all description of AI. Broadly speaking, AI refers to the simulation of human intelligence by machines programmed to mimic and perform tasks that would typically require a human’s intelligence. Examples of AI include chatbots like ChatGPT, virtual assistants like Siri and Alexa, robotics, and much more. 

What are Costs in Civil Litigation? 

Legal costs-often referred to simply as “costs” in the legal sphere-refer to the associated costs and expenses of litigation, including legal fees and disbursements. These costs can range from a lawyer’s bill to expenses incurred in relation to the litigation. 

Depending on the circumstances, parties may be entitled to claim costs when they attend a court proceeding. They may seek an order from the court that the opposing party pays their costs. 

How Does the Court Determine Who Gets Costs? 

In Ontario, s. 131 of the Courts of Justice Act, RSO 1990, c C.43 states that the court may use its discretion to determine by whom and to what extent the costs of a proceeding will be paid. In doing so, the court must use the “simplest, least expensive and most expeditious process” pursuant to the Rules of Civil Procedure, RRO 1990, Red 194.

As each case is different, courts are expected to use their discretion when awarding costs by considering the following principles outlined by the Supreme Court of Canada in British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71

  • Costs should be awarded to the successful party (or otherwise deserving party) and paid by the unsuccessful party; 
  • The court will not make a costs award until the end of the proceeding; 
  • Costs are payable only for allowable expenses and services that were relevant to the case or proceeding; and
  • Costs are not payable to help a party participate in the proceeding. 

AI and Costs Awards 

Interestingly, the AI bug appears to have appeared in Ontario’s courts earlier than anticipated. In 2018, judges in two cases made cost awards while considering the impact of AI on legal research fees. In these cases, the courts came to different conclusions. 

Superior Court of Justice Claimed AI Could Have Reduced Legal Research Costs

In Cass v. 1410088 Ontario Inc., 2018 ONSC 6959, a 2018 case from the Ontario Superior Court of Justice, the plaintiff was injured when she slipped and fell at a bar. Following a trial, the court determined that the plaintiff was not entitled to damages for her injuries, finding that there was no genuine issue for trial. 

The defendants sought their costs for the action, including a claim of $900.00 for disbursements associated with “research costs.” The court disagreed, stating that counsel should be familiar with the law in the area and did not require assistance from a third party. Interestingly, the court stated: “[i]f artificial intelligence sources were employed, no doubt counsel’s preparation time would have been significantly reduced.” 

Superior Court of Justice Stated “Computer-Assisted Legal Research is Here to Stay” 

In Drummond v. The Cadillac Fairview Corp. Ltd., 2018 ONSC 5350, a 2018 case from the Ontario Superior Court of Justice, a similar dispute arose relating to costs claimed for legal research. 

In Drummond, unlike Cass, the plaintiff was successful in their occupier’s liability claim and sought costs for the action. The parties disagreed on whether disbursements of $1,323 for legal research were appropriate. The court allowed the costs, noting the following with respect to the use of artificial intelligence: “[t]he reality is that computer-assisted legal research is a necessity for the contemporary practice of law and computer-assisted legal research is here to stay with further advances in artificial intelligence to be anticipated and to be encouraged.” 

The Courts’ Differing Opinions

Why did the courts come to different conclusions in these cases? Why did one court allow costs for legal research while the other didn’t? 

In Cass, the “research costs” appear to be related to hiring outside researchers to assist with case research. In Drummond, on the other hand, the legal research fees related to the use of WestLaw, an online legal research program. 

Implicit in these decisions is the court’s desire to keep costs simple, inexpensive, and quick – and implies that the court believes artificial intelligence might be a way to get there. 

Final Thoughts on AI, Law, and Costs in Civil Litigation

Even five years ago, judges realized the value of AI in law. ChatGPT and other artificial intelligence programs are still in the early stages, but their role in modern workplaces, including law firms, remains unclear. 

For the time being, the cases above are a great reminder of how cost awards can vary significantly between cases and how technological advancements can change judges’ attitudes towards what a party can appropriately claim for a costs award. As mentioned above, costs are a matter of judges’ discretion – and both lawyers and clients must be mindful of how technology and industry trends can impact a judge’s willingness to make costs awards in civil litigation actions, especially presently, as AI advancements continue to dominate headlines. 

More generally, it’s essential for legal clients to understand how costs awards are handled in civil litigation claims. Costs awards, for better or for worse, can have financial and risk management implications for clients, so it’s important to understand the potential costs and risks when advancing a claim. An experienced civil litigation lawyer will have the knowledge to guide you through this process and provide you with information well in advance so you can make meaningful decisions relating to your claim (and answer any questions you have along the way). 

Civil Litigation Lawyers in Ottawa, Kingston, North Bay, and Across Eastern Ontario

Litigation is daunting, often requiring a significant financial and time commitment. Suppose you seek to pursue a claim or are required to respond to a civil litigation action. In that case, it is important to consult with a skilled litigator who can provide practical, honest and effective advice. 

At Tierney Stauffer LLP, our civil litigation lawyers work with our clients to determine the most effective options for a quick resolution. To discuss your legal questions with one of our lawyers, call us at 1-888-799-8057 or contact us online to schedule a consultation. 


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