Can I recover legal fees in a contractor dispute in Ontario?

In Ontario, you generally cannot recover legal fees in contractor disputes unless there's a specific contract clause allowing it or you're dealing with egregious conduct under the Construction Act.

Most contractor disputes in Ottawa fall under small claims court jurisdiction (under $35,000), where each party typically pays their own legal costs regardless of who wins. However, there are some important exceptions and strategies to understand.

When Legal Fees Might Be Recoverable

Under Ontario's Construction Act, if a contractor files a frivolous or vexatious lien claim, you may be able to recover legal costs. Similarly, if your contract specifically includes a clause stating the losing party pays legal fees, this may be enforceable - though Ontario courts don't automatically honor these clauses and will scrutinize them carefully.

In Superior Court (for claims over $35,000), the winning party may recover a portion of their legal costs, but this is at the court's discretion and rarely covers full legal fees.

More Cost-Effective Dispute Resolution Options

Before considering litigation, Ottawa homeowners should explore these alternatives that can resolve disputes without major legal expenses:

The Tarion Warranty Corporation handles disputes with registered builders and provides free mediation services. For general contractors, try mediation through the Ontario Consumer Protection office or private mediation services, which typically cost $200-500 per session split between parties.

The Construction Act's adjudication process, introduced in 2019, provides faster resolution for payment disputes. An adjudicator's decision is binding and enforceable, with costs typically under $5,000 total.

Protecting Yourself Upfront

The best protection is prevention. Always verify your contractor through ESA licensing (esasafe.com), WSIB clearance (wsib.ca), and proper insurance. Use written contracts that clearly define scope, timeline, and payment terms. Follow Ontario's Construction Lien Act holdback rules - retain 10% of payments for 60 days after substantial completion.

For disputes under $35,000, small claims court in Ottawa (161 Elgin Street) charges only $102-$220 in filing fees, making it accessible without lawyers. You can represent yourself or hire a paralegal for much less than lawyer fees.

When to Consult Legal Help

If your dispute involves safety issues, fraud, or significant financial loss, consult with a construction lawyer for a case assessment. Many offer free 30-minute consultations. The Law Society of Ontario's referral service (1-855-947-5255) can connect you with construction law specialists.

Remember, the goal is resolving your issue efficiently and cost-effectively. Sometimes a well-written demand letter from a lawyer ($300-500) can resolve disputes without litigation, making it a worthwhile investment even if you can't recover those fees later.

For complex disputes involving permits or code violations, contact City of Ottawa Building Code Services at 613-580-2424 - they can provide enforcement support at no cost to you.