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St. Marthe v. O’Connor, 2019 ONSC 4279


Costs Awarded Against Insurer Exceeds Trial Award for Damages – Access to Justice 

The Court decision of St. Marthe v. O’Connor, 2019 ONSC 4279 sends a powerful warning to auto insurers that an inflexible approach to settlement could cost them dearly.  In this personal injury case, the Plaintiff, Peter St. Marthe, was riding his bicycle when he was struck by a motor vehicle. Consequently, the Plaintiff was left with chronic back pain and unable to continue to work in construction.

The Lawsuit and Trial  St. Marthe v. O’Connor

The Plaintiff was successful after an 11 day trial.  Justice Hurley of the Ontario Superior Court of Justice awarded damages of $205,662.23 to the Plaintiff for pain and suffering, loss of income and housekeeping expenses. Justice Hurley was then tasked with determining how much in costs to award to the Plaintiff for his legal fees and disbursements.

A number of months prior to trial, the Plaintiff made an offer to settle his claim for $40,000, plus costs. The Defendant rejected the offer and countered with an offer to not seek any costs against the Plaintiff in exchange for a complete dismissal of the action. In effect, the Defendant was asking the Plaintiff to withdraw his lawsuit. The Defendant’s offer was time-limited, and provided that the Defendant would seek his legal costs if the Plaintiff did not accept the offer by approximately one month prior to trial. Throughout the litigation, the Defendant refused to make any monetary offer, including at mediation and at a judicial pre-trial conference. Moreover, the Defendant further refused to participate in a mid-trial judicial settlement conference.

Justice Hurley found that the Defendant had decided early in the litigation that there would be no monetary offer made to settle this case. The Court found this “baffling” in light of both an admission of liability by the Defendant and a defence expert medical opinion which supported that the Plaintiff suffered from a chronic pain condition and would need to retrain for a more sedentary occupation.

The Decision in  the St. Marthe v. O’Connor Case

The Court awarded a whopping $300,000 in costs against the Defendant. In coming to his decision, Justice Hurley carefully scrutinized the principles of indemnity, proportionality and the reasonable expectation of parties. The costs award exceeded the actual damages awarded to the Plaintiff for his losses, and Justice Hurley explained that a strict application of the proportionality principle would work against promoting access to justice. The Court acknowledged that an insurance company representing a Defendant in litigation is entitled to adopt any strategy it deems fit, even if the strategy involves discouraging plaintiffs from pursuing claims by forcing them to incur significant litigation expenses and risk serious costs consequences to go to trial. Nevertheless, Justice Hurley found that such strategies could have wide-ranging and adverse implications on access to justice and should not be encouraged by giving losing defendants any costs breaks on foreseeable costs consequences.

Important Take Away from St. Marthe v. O’Connor 

The important take away from this decision is that if an insurer has chosen not to make any monetary offers to settle a case, forcing a Plaintiff to either abandon their case or take the matter to an expensive trial, the risks of significant cost consequences are real and there could be little sympathy waiting for the insurer at the end of an unsuccessful trial.

For more information on the case of St. Marthe v. O’Connor or to learn more about working with our Toronto personal injury lawyers, please contact us for a consultation. Though Toronto based, we provide legal services across Canada.

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