To incur something means to bring upon yourself the responsibility to discharge something such as a debt, penalty or an obligation. It seems that Mr Wilson has done something which is going to result in him being required to pay money (he has incurred a debt). Sports players can incur a penalty if they break the rules.

Hilary and Anna are right, and they did indeed read the text correctly. You asked for the meaning of 'incurred', and Hilary and Anna both gave you correct definitions of this word. If you incur costs, you do something which results in your having to pay some money to someone. This might be a bill, a charge or a fine. Let's take a look at the sentence: "The council agrees to pay for the full costs incurred by Mr. Wilson." Subject: The council Verb phrase: agrees to pay for Object: the full costs [incurred by Mr. Wilson]. As you can see from this breakdown, the verb 'incurred' does not relate to the subject of the sentence. It is clear that the council did not incur anything - it was Mr Wilson (not the council) who incurred the costs. If you look more closely at the object of the sentence, you'll see that it's a reduced relative clause. It is a contracted form of "the full costs which had been incurred by Mr Wilson". You'll also see that it's a passive form of the active phrase "the full costs which Mr Wilson had incurred". There are clearly two stages to this scenario: 1. Mr Wilson incurred some costs. 2. The council agreed to cover (take on responsibility for paying) these costs. A likely scenario is that there was some kind of disagreement between Mr Wilson and the council or their agents. Mr Wilson incurred some costs, for example, lawyer's bills, during the process of the litigation. When the council was found to be at fault, they agreed to pay these costs on Mr Wilson's behalf. I hope that is clearer now.

if Mr. Wilson incurred charges it means he has got charges/fines/expenses he has got to pay to someone.

It means the council has agreed to pay all the costs that Mr wilson incurred. It was probably in relation to a court case which he pursued against the council and won. Mr Wilson will be reimbursed the full amount of all the costs and expenditure he incurred. We are discussing a business, commercial, financial or legal "incur" which is different from the standard dictionary definition of "incur" as explained above. Incur the definition you need is to be found by scrolling down in a dictionary whether online or in paper form. INCUR definition number two: "to be made to lose money or have to pay a charge" Mr wilson from a legal perspective was forced to incur expenses to either defend himself in court, or to take court action to get justice. The court decided to reimburse him with his expenses and out of pocket expenditure. The other answers have not correctly read the text. It was me who reluctantly down voted them.