“Baffling” Defence Position Results in Significant Cost Award

It’s old news that auto insurers aggressively defend personal injury lawsuits in Ontario, but are the Courts pushing back with escalating cost awards when they lose? It might seem so based on the recent decision of St. Marthe v. O’Connor [1] (“St. Marthe”) where the Court awarded the Plaintiff $300,000 in costs plus HST and disbursements following an 11-day trial where the defence made no offers to settle.

The Plaintiff offered to settle the action for $40,000 plus costs before trial.  During the trial, the Plaintiff offered to settle for $60,000 plus costs.  In the end result, the Court awarded damages of $205,662.23, with the costs in favour of the Plaintiff exceeding the damages award.

Deciding to pursue a case through trial can be a difficult choice for any lawyer, especially one where the value is low. However, in the face of a zero offer from the Defendant, they have little choice, other than perhaps abandoning their client on the eve of trial, which is a poor option. The lawyers[2] in St. Marthe submitted $400,000 in time and over $40,000 in disbursements on a case they were willing to settle for less than a tenth of that amount before trial. Justice isn’t cheap.

The personal injury practice of law is not easy in the face of insurer resistance to reasonable settlements.  This is no more clearly demonstrated than in St. Marthe, where fault for the accident was not in dispute and the Defendant’s own medical expert concluded the Plaintiff suffered chronic pain and would need retraining to enter the workplace.   The Court in St. Marthe concluded that “…the defendant decided, at an early stage of this litigation, that he would not pay any amount, however modest, to settle the case”, and found the Defendant’s position “baffling”.

In their costs submissions, the lawyers[3] for the defendant insurer, Aviva Canada Inc., described the case as a “straightforward personal injury matter” but Justice Hurley rejected their position finding instead that:


This was hard-fought litigation on both sides and that almost invariably results in the expenditure of time and effort that the parties deem necessary at the time but, after the case is completed, the unsuccessful party characterizes as excessive or unwarranted.”


When addressing the issue of costs exceeding the award, the Court in St. Marthe quoted Lane, J. in the 1997 case of 163972 Canada Inc v. Isacco[4] when he noted that reducing reasonable cost awards to the Plaintiff would encourage the intransigence displayed by the Defendant who fought his case to the bitter end:

That the costs significantly exceed the amounts at stake in the litigation is regrettable, but it is a common experience and is well known to counsel as one of the risks involved in pursuing or defending a case such as this to a bitter end rather than finding a compromised solution. To reduce the plaintiff’s otherwise reasonable costs on this basis would simply encourage the kind of intransigence displayed by the defendants in this case.

The Plaintiff in St. Marthe was awarded $300,000 in costs plus HST and disbursements.  In making this award, Justice Hurley, who relied extensively on the decision in Persampieri v. Hobbs[5], noted that

“…a sophisticated litigant like the insurer, in this case, could reasonably expect to pay costs substantially in excess of the damages awarded, particularly when it takes an inflexible approach to settlement.”

Will insurers in Ontario adopting inflexible approaches to settlement continue to face significant cost awards when they lose?  I suspect they will, but they undoubtedly know this and don’t care. Insurers likely make up these losses on the scores of cases abandoned in the wake of their approach.


Deep-pocketed insurers still win, despite the costs in St. Marthe, and other cases like it. Insurers have the advantage. However, that doesn’t mean lawyers should throw in the towel. They will need every tool in their arsenal to level the playing field.  This can include After the Event insurance (“ATE”) which protects the lawyer’s disbursements and may help offset any cost exposure to the plaintiff if they lose.  With ATE, lawyers can have an extra layer of protection in pursuing a just and fair result for their clients.



[1] St. Marthe v. O’Connor, 2019 ONSC 4279

[2] Edward V. Bergeron and Warren WhiteKnight

[3] Vanessa Turner, Vanessa De Sousa, and Jeremy Shaw

[4] 163972 Canada Inc. v. Isacco, [1997] O. J. 838

[5] Persampieri v. Hobbs2018 ONSC 368, (CanLII) at paras. 93 – 103


Leave a Comment


(0 comment)