Costs did not follow the event in a recent “David and Goliath” lawsuit. In Przyk v Hamilton Retirement Group Ltd, 2019 ONSC 7498 (“Przyk”), Justice Whitten denied a defendant’s request for costs after successfully defending a claim at trial. In doing so, Justice Whitten relied upon evidence regarding the general litigation approach taken by the defendant’s insurer.
Summary of Decision
An elderly plaintiff commenced an action against a retirement home for damages relating to injuries she suffered in a slip and fall. The defendant was represented by its insurer’s in-house legal department. During the course of the litigation, the plaintiff expressed an interest in resolving the action but the defendant was not interested and defended to trial.
The parties settled damages at $75,000 and the trial was confined to the issue of liability. The jury found that the defendant was not liable for the plaintiff’s damages. The defendant sought its costs of the proceeding.
Justice Whitten held that while the default approach is for the loser to pay the winner’s partial indemnity costs, s 131(1) of the Courts of Justice Act establishes costs are in the discretion of the Court. Justice Whitten then cited Boucher v Public Accountants Council for the Province of Ontario (2003), 71 OR (3d) 291 (CA) for the following two principles:
- the overarching objective to determining costs is to consider the result produced and question whether the result is fair and reasonable; and,
- the failure to refer to the overriding principle of reasonableness when assessing costs can produce a result that is contrary to the fundamental objectives of access to justice.
Justice Whitten stated that modest complainants are always at the mercy of the economics of litigation and access to justice could be threatened by an opposing party’s resources. Justice Whitten was also critical of the “hardball” approach that the defendant’s insurer apparently takes with modest litigants and held such an approach may result in the insurer being denied costs despite successfully defending proceedings. Justice Whitten held:
From reading the employment advertising for [the insurer] concerning the sending a message to judges, mediators, and counsel, one detects a certain arrogance. Size of the insurance market is not inconsequential. Insurers are answerable to their shareholders. Playing hardball with the modest litigant may indeed be profitable, but that does not mean that the modest litigant should have a field day or that the insurer be vulnerable to frivolous claims.
Being a large market shareholder is not without social responsibility, size should not be wielded to oppress deserving litigants as that would encroach upon the broader social interest of access to justice.
[The insurer] with its approach is at risk of allegations of playing hardball. In some circumstances that approach may result in no costs. In a way, that is a cost of doing business in such a fashion.
As such, and despite not finding that such “hardball” tactics were employed in the proceeding, Justice Whitten held that the parties should bear their own costs.
It will be interesting whether Przyk impacts insurers’ approaches to litigating modest cases. In Przyk, Justice Whitten denied an insurer’s request for costs based on evidence regarding its general “hardball” approach to litigation and despite not finding that approach was used in the proceeding before him. In fact, the decision to defend liability was correct given the jury’s verdict.
The defendant in Przyk has sought leave to appeal the decision of Justice Whitten. As it currently stands, insurers who develop a reputation for not resolving questionably defensible claims for modest sums may be at risk of being denied costs even if successful at trial.