A recent decision of the Ontario Superior Court of Justice reminds litigants that cost considerations must be at the forefront of every decision made when litigating a case.
After a 10-day jury trial, the plaintiff in Brophy v. Harrison was awarded judgment in the amount of $62,628.75. After deductions, the plaintiff took home $17,688.64. This was after a trial where the plaintiff had initially sought damages in the range of $996,900.89 to $1,150,700.89, and the defendants suggested damages in the range of $5,000 to $10,000.
Despite the modest judgment, Justice Casullo awarded the successful plaintiff $275,456.60 in costs and disbursements. Justice Casullo rejected the defendants’ argument that there ought to be proportionality between the size of the judgment and the ultimate cost award. As stated by Justice Casullo:
“limiting the losing party’s exposure to costs proportionate to the size of the claim would encourage those resisting legitimate but modest claims to take unreasonable positions.”
The case serves as a reminder to anyone anticipating or engaged in litigation that legal costs must be front and centre of every decision about how to proceed. Regardless of whether the size of the claim or eventual judgment is modest, this decision suggests that parties must make serious efforts to resolve the claim as early on in the process as they can. In particular, a defendant responding to what they believe to be a meritless claim must be wary about refusing to provide a settlement offer where there is at least some possibility of damages.
The full impact of this decision remains to be seen. While it reminds litigants that the courts expect parties to utilize Rule 49 settlement offers, it is perhaps less settling for defendants who decide to take a firm stance against what they perceive to be meritless claims. While the court characterized the defendants’ particular strategy as a “hard-ball approach”, the case nevertheless stands for the proposition that even a modest judgment can result in significant cost consequences for the unsuccessful party.