Alberta Court of Appeal recalibrates cost awards in professional disciplinary proceedings

On July 17, 2025, the Alberta Court of Appeal released its decision in Charkhandeh v College of Dental Surgeons of Alberta, 2025 ABCA 258 (Charkhandeh).

Charkhandeh contains a thorough analysis of the contextual manner by which regulatory bodies should determine proportionate amounts of costs to be imposed on professionals found to have committed professional misconduct. It did so in order to address the inconsistent jurisprudence regarding costs and because “awards of costs in this context have become so large and disconnected from first principles that intervention is warranted.”

Although Charkhandeh is not binding outside of Alberta, the robust reasoning in this appellate-level decision should emerge as a key reference point in disciplinary cases involving professionals nationwide. In short, for regulated professionals facing five- or six-figure cost exposure, Charkhandeh is a major shift away from automatic, percentage-based cost awards toward transparency and proportionality.

Background

After a 13-day hearing before a Discipline Tribunal, Dr. Shouresh Charkhandeh was found guilty on five of the six counts of unprofessional conduct alleged against him. The Discipline Tribunal found significant sanctions necessary for reasons of specific and general deterrence and to uphold public confidence in the integrity of the profession. Sanctions of the cancellation of Dr. Charkandeh’s registration and practice permit and fines of $50,000 were imposed upon Dr. Charkhandeh. The Discipline Tribunal further ordered Dr. Charkhandeh to pay 75% of the costs of the investigation and hearing.

Dr. Charkhandeh appealed the Discipline Tribunal’s findings to the Appeal Panel of Council of the College of Dental Surgeons. The Appeal Panel upheld the findings, sanctions, and costs of the Discipline Tribunal. Additionally, the Appeal Panel ordered that Dr. Charkhandeh pay 75% of the appeal costs.

The combined Discipline Tribunal and Appeal Panel’s costs awards totaled a whopping $429,226.

Dr. Charkhandeh appealed both the findings of misconduct and the sanctions and costs imposed against him. This Insight will touch only on the Court of Appeal’s discussion and decision respecting the costs award.

Principles to consider in awarding costs

In considering whether the costs awards in this case were sustainable at law, the Court of Appeal provided the following principles to be followed in assessing costs awards in the professional disciplinary setting:

• Costs are in the discretion of a tribunal. However, that discretion must be exercised in a judicial manner.
• There is no presumption regarding who should bear the burden of costs or whether costs should be awarded at all.
• Costs awards are to allocate the costs of proceedings; they are not meant to add an additional form of punishment. Moreover, costs are not related to the substance of the charges, they are related to the process of the hearing. The seriousness of a set of charges and moral indignation towards a member’s conduct is not relevant to an award of costs. By the time a decision-maker is assessing costs, it should have already imposed a “fit sanction” (para. 138).
• The ultimate award cannot be unduly onerous or crushing to the professional. It should not deprive a professional of the opportunity to make full answer and defence, nor to prompt them to admit responsibility for conduct which they do not agree is unprofessional. “An award of costs should not be of such a magnitude that there is no realistic prospect of the professional being able to pay them” (para. 148).

While emphasizing that the relevant factors to be considered in imposing costs and their weight will vary case-by-case, the Court listed the following non-exhaustive factors to be considered when imposing costs on regulated professionals:

• The proportion of charges successfully defended
• The length and extent of the hearing
• The conduct of the parties at the hearing
• Whether costs have been increased due to the unreasonable or inefficient litigation conduct of either party
• Whether the expenses were reasonably incurred having regard to the nature of the investigation, the allegations and the hearing process
• Whether the amount paid by the regulator in costs is fair and reasonable
• Whether the quantum represents an amount that the losing party should reasonably be expected to pay the winning party
• Whether the costs award is proportionate to the issues involved, the circumstances of the member, and the overall burden it places on him or her

With respect to ordering costs, Charkhandeh provides that an unreasonable increase in the amount of costs routinely ordered against professionals has been caused by the method of calculating total expenses and ordering a percentage of those total expenses as costs to be paid by a professional. Tribunals should not order “in gross” percentage costs awards without knowing what is included in these costs. Moreover, a tribunal must not order costs based on a percentage of expenses incurred without examining the expenses’ reasonableness. In short, the Court of Appeal held that percentage-based awards without line-item scrutiny are legally unsustainable.

In determining who should bear the burden of certain costs, overhead expenses are the responsibility of the regulator and a professional is generally not responsible for all the expenses associated with a hearing’s infrastructure.

Conclusion

The Court of Appeal ultimately found the costs awards to be unreasonable and based on errors of principle, reducing costs to $50,000 (plus $10,000 for the appeal) despite the College having incurred costs of over $400,000.

Although not formally binding outside Alberta, Charkhandeh will be persuasive authority across Canada. Regulatory tribunals throughout the country operate under comparable statutory cost regimes will need to justify the costs sought against investigated members through a transparent and principled analysis, based upon the evidence.

Key takeaways

Charkhandeh marks an important recalibration in how costs should be approached in professional discipline matters. By emphasizing proportionality, transparency and fairness, the Alberta Court of Appeal has signaled that regulators must ground their cost awards in principled analysis rather than routine percentage-based calculations. As regulatory bodies across Canada continue to navigate evolving expectations around discipline and cost recovery, this decision offers timely guidance as well as a reminder that costs must never become punitive or crushing.

For professionals and regulators alike, staying ahead of these developments is essential. Our team continues to monitor emerging jurisprudence and is ready to help clients understand how decisions like Charkhandeh may shape disciplinary processes moving forward.

If you are a professional regulator or a regulated professional and have questions about professional discipline, please contact one of the authors of this article or any other member of our regulated professionals group.

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