“In Fong v. Chan, 1999 CanLII 2052 (ON CA), 1999 CarswellOnt 3955, [1999] O.J. No. 4600, 128 O.A.C. 2, 181 D.L.R. (4th) 614, 46 O.R. (3d) 330, 93 A.C.W.S. (3d) 222, Sharpe J. wrote:
21 It is apparent from this review of the case law that the preponderance of modern authority supports the contention that both self-represented lawyers and self-represented lay litigants may be awarded costs and that such costs may include allowances for counsel fees. Since the Chorley decision in 1884, it seems not to have been doubted that self-represented solicitors could recover costs for solicitor’s fees. The respondents did not take issue with that proposition on this appeal. Johnson v. Ryckman, supra stands for the proposition that a self-represented solicitor could not recover anything for counsel fee, but as I have already noted, it was acknowledged in that case that there seemed to be no rationale for the rule. I am not persuaded by the respondent’s submission that this 1903 case, which rests on such a shaky foundation, should continue to govern us today. Johnson v. Ryckman has been superceded by more recent cases that have quite properly ignored the untenable distinction between solicitor’s fees and counsel fees. I can see no reason for maintaining the distinction between solicitor’s fees and counsel fees that was already outmoded almost one hundred years ago. The legislature’s decision to allow parties to recover costs in relation to the work of salaried employees provides added impetus to reject the view that self-represented solicitors should be precluded from recovering costs. Two provincial appellate courts have held that lay litigants may recover costs, including counsel fees. The clear trend of both the common law and the statutory law is to allow for recovery of costs by self-represented litigants.
22 Quite apart from authority and as a matter of principle, it seems to me to be difficult to justify a categorical rule denying recovery of costs by self-represented litigants. As noted in the Fellowes McNeil, supra and in Skidmore, supra, modern cost rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behaviour by litigants. It seems to me that all three purposes are fostered by allowing the trial judge a discretion to award costs to self-represented litigants.
23 Since the Chorley case over one hundred years ago, it had been accepted that self-represented lawyers are entitled to indemnity on the “time is money” or opportunity cost rationale. It is difficult to see why the opportunity cost rationale should not be more generally applicable to self-represented litigants. The self-represented lawyer possesses legal skills, but lacks professional detachment when acting in his or her own cause. If the law is prepared to compensate lawyers for this loss of time when devoting their efforts to their own cause, I fail to see any basis for denying the same entitlement to self-represented lay litigants who are able to demonstrate the same loss.
24 A rule precluding recovery of costs, in whole or in part, by self-represented litigants would deprive the court of a potentially useful tool to encourage settlements and to discourage or sanction inappropriate behaviour. For example, an opposite party should not be able to ignore the reasonable settlement offer of a self-represented litigant with impunity from the usual costs consequences. Nor, in my view, is it desirable to immunize such a party from costs awards designed to sanction inappropriate behaviour simply because the other party is a self-represented litigant.
25 I would add that nothing in these reasons is meant to suggest that a self-represented litigant has an automatic right to recover costs. The matter remains fully within the discretion of the trial judge, and as Ellen Macdonald J. observed in Fellows, McNeil v. Kansa, supra, there are undoubtedly cases where it is inappropriate for a lawyer to appear in person, and there will be cases where the self-represented litigant’s conduct of the proceedings is inappropriate. The trial judge maintains a discretion to make the appropriate costs award, including denial of costs.
26 I would also add that self-represented litigants, be they legally trained or not, are not entitled to costs calculated on the same basis as those of the litigant who retains counsel. As the Chorley case, supra, recognized, all litigants suffer a loss of time through their involvement in the legal process. The self-represented litigant should not recover costs for the time and effort that any litigant would have to devote to the case. Costs should only be awarded to those lay litigants who can demonstrate that they devoted time and effort to do the work ordinarily done by a lawyer retained to conduct the litigation, and that as a result, they incurred an opportunity cost by foregoing remunerative activity. As the early Chancery rule recognized, a self-represented lay litigant should receive only a “moderate” or” reasonable” allowance for the loss of time devoted to preparing and presenting the case. This excludes routine awards on a per diem basis to litigants who would ordinarily be in attendance at court in any event. The trial judge is particularly well-placed to assess the appropriate allowance, if any, for a self-represented litigant, and accordingly, the trial judge should either fix the costs when making such an award or provide clear guidelines to the Assessment Officer as to the manner in which the costs are to be assessed.”