Can a Final Costs Order Be Changed After It's Made in Ontario?

Can a Final Costs Order Be Changed After It’s Made in Ontario?

Yes — in certain circumstances, an Ontario court can revisit and vary a final costs order even after it has been entered. A 2026 Superior Court decision confirms that when genuinely new and critical facts about costs coverage come to light, the court retains jurisdiction to act, and the doctrine of functus officio does not automatically stand in the way.

What Does “Functus Officio” Mean, and Why Does It Matter?

Functus officio is a Latin phrase meaning a court or decision-maker has finished its job and has no further authority over a matter. It matters because once a costs order is entered, a losing party cannot simply ask the judge to reconsider just because they are unhappy with the result. However, the doctrine is not absolute. Ontario courts apply a contextual approach — if there are new and critical facts that were unknown despite reasonable efforts to discover them, the court may find it still has jurisdiction to act.

In Navaratnarajah v. FSB Group Ltd., 2026 ONSC 3314 (CanLII) (full decision), the court applied this contextual approach and concluded it was not functus officio. The key was that facts about who was actually responsible for covering adverse costs were not reasonably discoverable at the time the original order was made.

What Happened in This Class Action Case?

The underlying proceeding was a class action that was ultimately decertified. After decertification, a costs order was made against the representative plaintiff. The problem arose when new information emerged — information about costs coverage that had not been known despite due diligence at the time of the original order. The court found that enforcing the costs order solely against the representative plaintiff, in light of this new information, would be unfair.

This situation highlights a real tension in class proceedings: the representative plaintiff steps forward on behalf of a larger group, often with assurances from class counsel about financial exposure. When those assurances are not reflected in a costs order, the individual who put their name on the claim can be left holding the bill.

Can a Court Order Costs Against Someone Who Is Not a Party?

Yes — Ontario courts have recognized the authority to order costs against a non-party in appropriate circumstances. Here, the court used Rule 59.06, its inherent jurisdiction, and the broad powers available under the Class Proceedings Act, 1992, s. 12 to vary the costs order and add class counsel as responsible for payment.

This was not a case of punishing lawyers for misconduct. The court made clear it was not relying on Rule 57.07, which deals specifically with costs against a solicitor of record for undue delay or improper conduct. Instead, the basis for the non-party costs order was the court’s case management powers and the well-established expectation in class proceedings that class counsel will indemnify the representative plaintiff against adverse costs.

Does a Court Need to Use Rule 57.07 to Order Costs Against a Lawyer?

No — Rule 57.07 is not the only route to a costs order involving a lawyer. This decision confirms that a court can order costs against class counsel through Rule 59.06, inherent jurisdiction, and the Class Proceedings Act without invoking the solicitor misconduct rule at all. While the court noted some undue delay in the proceedings, that delay was not the reason for the order. The foundation was fairness to the representative plaintiff and the court’s supervisory role over class counsel.

This is an important distinction. Rule 57.07 carries professional responsibility implications and requires a specific procedural motion. The path taken here is grounded in the court’s broader equitable powers — a meaningful difference for how class counsel and their clients should think about retainer agreements and indemnification commitments.

What Is the Court’s Role in Supervising Class Counsel?

The court plays an active supervisory role in class proceedings, and this decision reinforces that. Class actions are different from ordinary civil litigation. A representative plaintiff takes on personal exposure for the benefit of absent class members. Because of that dynamic, courts expect class counsel to stand behind their client when adverse costs are at stake.

When a class action is decertified and costs are ordered against the representative plaintiff, the court will look carefully at whether class counsel provided the indemnification that was reasonably expected. If new facts reveal that coverage was not in place — or was not disclosed — the court can step in to correct the imbalance. Our Ontario litigation lawyers regularly advise clients on cost risks in complex proceedings, including class actions and multi-party disputes.

Practical Takeaways for Representative Plaintiffs and Class Counsel

• Get indemnification in writing. If you are a representative plaintiff, your retainer agreement with class counsel should clearly spell out who bears adverse costs if the action fails or is decertified.
• Disclose costs coverage early. Class counsel should be transparent with the court about indemnification arrangements at the time a costs order is being made — not after the fact.
• New facts can reopen a costs order. If genuinely new information about costs coverage emerges after an order is entered, there may be grounds to bring a Rule 59.06 motion to vary — but the facts must be truly new and not discoverable through earlier due diligence.
• Rule 57.07 is not the only tool. Courts have broader powers to address unfair cost outcomes in class proceedings without resorting to a misconduct finding against counsel.
• Decertification carries real financial risk. If a class action is decertified, the representative plaintiff may face a personal costs order. Understanding that risk before agreeing to be a representative plaintiff is essential.

If you are involved in a class action or facing a costs dispute in Ontario — whether in Burlington, Hamilton, or elsewhere in the province — it is worth speaking with a lawyer about your exposure before costs become an issue.

UL Lawyers offers a free initial consultation from their Burlington office and serves clients across Ontario. If you have questions about costs orders, class proceedings, or civil litigation strategy, reach out to our civil litigation team to discuss your situation.

---

This article is automated commentary on a public court decision and is for general information only — not legal advice. Decisions rely on facts unique to each case. If you are affected by a similar issue, contact a lawyer for advice specific to your situation.