Answer ... If the issue of costs is not dealt with in the agreement between the parties, the tribunal generally has discretion in awarding costs (Arbitration Act, RSA 2000, c A-43, s 53; Arbitration Act [title rep. & sub 2011, c 25, s 305], RSBC 1996, c 55, s 11; Arbitration Act, SM 1997, c 4, CCSM, c A120, s 53; Arbitration Act, 1991, SO 1991, c 17, s 54; Arbitration Act, 1992, SS 1992, c A-24.1, s 54; Brewer v Insurance Corp of British Columbia (1991), 1991 CarswellBC 213 (BC SC); Spence v Manitoba (1996), 1996 CarswellMan 293 (Man CA)) and can include in the award:

• the fees and expenses of the arbitrators and expert witnesses;
• the parties’ legal fees and expenses;
• the fees of any administering institution; and
• any other expenses incurred in connection with the proceedings (Arbitration Act, RSA 2000, c A-43, s 53(1), (3); Arbitration Act, SM 1997, c 4, CCSM, c A120, s 53(1), (3); Arbitration Act, 1991, SO 1991, c 17, s 54(1), (2); Arbitration Act, 1992, SS 1992, c A-24.1, s 54(1), (2); Jager Industries Inc v Leduc (County) No 25 (1996), 1996 CarswellAlta 991 (Alta QB); affirmed (1999), 1999 CarswellAlta 468 (Alta CA); Pinheiro v GAN Canada Insurance Co (1998), 1998 CarswellOnt 2846 (Ont Insurance Comm).

When awarding costs, the tribunal may take into account settlement offers that have been rejected (Arbitration Act, RSA 2000, c A-43, s 53(6); Arbitration Act, SM 1997, c 4, CCSM, c A120, s 53(6); Arbitration Act, 1991, SO 1991, c 17, s 54(5); Arbitration Act, 1992, SS 1992, c A-24.1, s 54(5)). In the absence of an award dealing with costs, each party is responsible for its own legal expenses and an equal share of the fees and expenses relating to the arbitration. In British Columbia, when an arbitrator makes no order as to costs, a party may apply to the arbitrator for an order respecting costs (Arbitration Act, RSBC 1996, c 55, s 11(5)).

In international arbitrations, the UNCITRAL Model Law provides that if a party requests an interim measure or applies for a preliminary order and the tribunal determines that the measure or order should not be granted, that party is liable for any costs and damages caused by the measure or the order to any party. The arbitral tribunal may award such costs and damages at any point during the proceedings (UNCITRAL Model Law, Article 17G).

In some cases, tribunals are also able to order security for costs (Commercial Arbitration Act, RSC 1985, c 17 (2nd Supp), Sched 1, art 17 [renumbered 2012, c 26, s 25]).

In Quebec, jurisprudence in this regard specifies that the attribution of costs does not fall within the jurisdiction of the arbitration tribunal since the Civil Code of Quebec, which establishes that the arbitration is governed by the rules of the Code of Civil Procedure (CCP), refers only to Title II of Book VII (Sections 620 to 655) and not to the entire CCP. These provisions, which deal specifically with arbitration tribunals, do not provide for any discretion to award costs. If the recovery of disbursements is not provided for in the arbitration agreement, the parties cannot avail themselves of it.

Answer ... There are no restrictions on what the parties can agree to in terms of costs; in most of the Canadian legislation, this issue of costs is not addressed. The legislation in British Columbia intentionally does not restrict what the parties can agree to in terms of cost. The Law Reform Commission of British Columbia found no evidence that unfair terms as to costs contained in contracts of adhesion is an issue in that province (Law Reform Commission of British Columbia, Report on Arbitration, LRC 55 (Vancouver: Law Reform Commission, May 1982), at p28).