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Costs: A Discussion of Reasonableness and Proportionality

Persampieri v. Hobbs 2018 Ont SCJ

After a personal injury trial, the plaintiff was awarded $20,400. The judge awarded the plaintiff costs of $134,000 plus HST in fees and $20,250 plus HST in disbursements. The judge readily agreed that the costs were not proportionate to the amount ultimately owing, but took into consideration the following. The plaintiff had first offered to settle for $20,000 plus partial indemnity costs and ultimately offered to settle for $10,000 plus partial indemnity costs. The insurance company defendant had decided at the start of the litigation, and communicated this to the plaintiff, that it would not pay anything for the plaintiff’s claim. The court held that to unduly shave the costs, especially substantial indemnity costs under rule 49, based primarily on proportionality would be unfair. Further, the judge did not want to sanction the insurer’s litigation strategy to undercompensate the plaintiff because this would jeopardise overall access to justice.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.