Judge considers ‘hard-ball’ approach by defendant in costs award

An Ontario Superior Court judge said if a defendant takes a “hard-ball” approach to a claim, consequences may follow.

“No offer to settle was forthcoming from the defendant,” wrote Justice Annette Casullo in the July 19 decision, Brophy v. Harrison, 2019 ONSC 4377. “There was not even an offer to go without costs, which effectively left the plaintiff with no choice but to proceed to trial to seek recovery for her injuries. This is of course a fully defensible position for the defendant to take, but it may have concomitant consequences.”

In the motor vehicle jury case, plaintiff Deven Brophy suggested a range of damages between $996,900.89 and $1,150,700.89, and defendant Veronica Harrison suggested a range between $5,000 and $10,000. The plaintiff was ultimately awarded $62,628.75, which after a deductible and accident benefits settlement, came to $17,688.64.

Casullo, tasked with deciding costs, noted that the case didn’t engage Rule 49, which according to the Ontario Bar Association, is designed to “encourage parties to make offers to settle by providing that if the party making the offer achieves a better result at the hearing than under the Offer to Settle, that party will secure a better order as to costs than would otherwise have been the case.” While the Brophy requested a total of $283,456.60, Harrison said that since the Brophy's recovery amount was within the jurisdiction of Small Claims Court, there should be a proportionality between the recovered amount and the costs award.

Casullo awarded the plaintiff costs and disbursements of $275,456.60.

“Despite my direction that a Bill of Costs was to be included with written submissions, the defendant chose not to do so. Without knowing what the defendant’s costs were for this trial, I cannot complete the ‘reasonable expectation’ analysis. The inference to be drawn is that the quantum of the defendant’s costs approaches those of the plaintiff,” wrote Casullo. “The defendant took what I would view to be a hard-ball approach to this claim, and now must accept the consequences of that decision.”

Peter Cho, partner in the Toronto office of Smitiuch Injury Law who represented Brophy, says that the judge made clear that there are consequences to a “scorched earth” approach. He noted that the plaintiff also assumes risk — in this case, a young woman who may not have had the assets to pay a large costs award.

“What this case stands for is that you cannot place undue emphasis on proportionality. It is a consideration amongst many other things in the discretion of the court,” he says. “[The decision] is helpful because it does encourage people to come to the table with reasonable positions.”

But Daniel Reisler, founder of Reisler Law PC who represented Harrison, says that it is an unfortunate notion to characterize every defendant who doesn’t offer to settle as “hardball.”

“So many claims have no merit and they don’t owe the plaintiff anything. The suggestion that they should make an offer anyway, it’s offensive. The courts and some judges sometimes talk about encouraging settlement. But the other thing they should be doing is discouraging litigation that has no merit.”