{"id":11843,"date":"2025-09-07T12:33:54","date_gmt":"2025-09-07T16:33:54","guid":{"rendered":"https:\/\/360mediations.com\/en\/?p=11843"},"modified":"2025-09-07T12:33:58","modified_gmt":"2025-09-07T16:33:58","slug":"ontario-court-of-appeal-sends-chilling-message-to-insurance-carriers-who-play-hardball-in-personal-injury-claims","status":"publish","type":"post","link":"https:\/\/mail.360mediations.com\/en\/ontario-court-of-appeal-sends-chilling-message-to-insurance-carriers-who-play-hardball-in-personal-injury-claims\/","title":{"rendered":"Ontario Court of Appeal Sends Chilling Message to Insurance Carriers who Play Hardball in Personal Injury Claims"},"content":{"rendered":"\n

In this recently released decision, the appellate court upheld the trial judge’s cost award requiring the defendant to pay over a quarter million dollars in legal costs to a personal injury claimant who recovered a paltry $16,160.50 in damages following a three-week motor vehicle personal injury jury trial.\u00a0 Indeed, the cost award was $300,000.<\/p>\n

This is not the first lower court decision where a trial judge awarded significant costs to a plaintiff with nominal recovery: see for example Brophy v. Harrison<\/em>, 2019 ONSC 4377, where just over $275,000 was awarded to a plaintiff who recovered just under $18,000, or Persampieri v. Hobbs<\/em>, 2018 ONSC 368 which had a very similar outcome.<\/p>\n

However, to date, there has not been a detailed review by the appellate court on such cost awards, until now.\u00a0 And this cannot be trivialized, because a lot was at stake.\u00a0 On the one hand, awarding hundreds of thousands of dollars in legal costs for Small Claims Court damage type awards seems wholly disproportionate.\u00a0 Is a defendant in this situation entitled to assert that they were ultimately successful (ie: reducing a $1M claim to almost zero), or that with damages assessed within the monetary jurisdiction of the Small Claims Court or the Simplified Rules, costs should not only be denied to the plaintiff, but paid to the defendant?\u00a0 On the other hand, if a defendant effectively took the position throughout that the case was worth not even a dollar, shouldn\u2019t that defendant not be required to pay a hefty percentage of the plaintiff\u2019s legal fees associated with defeating the defendant\u2019s position (even if only marginally)?<\/p>\n

Which of these two arguments would prevail upon appellate review was the burning question.\u00a0 The answer was not good for defendants who take unjustified hardline settlement positions.\u00a0 In this case, the defendant never made a monetary offer to settle prior to trial, and the jury was asked by the defendant to award zero dollars under each head of damages.<\/p>\n

The appellate court effectively dispensed the proportionality argument on the basis that the cost award \u201cwas proportionate to the importance and complexity of the issues, and to the amount involved in the litigation.\u201d (at para 44).\u00a0 As \u201clong as trial judges have turned their minds to the issue of proportionality either expressly or impliedly, deference is owed to the costs award absent an error in principle or a decision that is plainly wrong.\u201d (at para 46).<\/p>\n

The definition of \u201csuccess\u201d was hotly debated in this appeal, because the defendant argued that it was successful in bringing a million dollar claim down to almost nothing, and that the trial judge was wrong to define success vis-\u00e0-vis their pre-trial unwillingness to make a monetary offer to settle.\u00a0 Yes, the plaintiff was more \u201csuccessful\u201d than a zero offer to settle, but the defendant argued that this was not the test: the test for success should just be about what was claimed juxtaposed against the outcome, and on this basis, the defendant was clearly successful in reducing a million dollar claim to almost pennies.<\/p>\n

Although it is clear from the trial judge\u2019s cost ruling that she did take into account the Defendant\u2019s pre-trial negotiation strategy as a grounds for assessing \u201csuccess,\u201d the appellate court pointed out that this was just but one factor that the trial judge looked at.\u00a0 For example, the trial judge felt that the plaintiff was successful because she convinced the jury to reject the defendant\u2019s plea that zero dollars should be awarded for each head of damages.\u00a0 The trial judge also concluded that the available evidence, leading into trial, made it likely that the plaintiff was going to be entitled to some damages \u2013 this is when the trial judge turned to assessing the defendant\u2019s pre-trial settle position. \u00a0<\/p>\n

As such, the appellate court concluded that there was no error in principle.\u00a0 It would be an error in principle had the trial judge simply concluded that the plaintiff was entitled to costs solely because the defendant failed to make a monetary offer to settle before trial.\u00a0 The trial judge assessed success on a multitude of other factors, and only turned to the lack of a monetary offer after determining that this position, carried throughout the trial, was not reasonable.<\/p>\n

The strong message from the appellate court is:<\/p>\n