Mundinger v. Ashton, 2020 ONSC 2024

Full Decision

The case of Mundinger v. Ashton serves as an important reminder of the real (and potentially substantial) costs consequences for Plaintiffs, even when they are covered by adverse costs insurance policies.

Introduction

The Plaintiff was involved in a motor vehicle collision in 2010. The Defendant admitted liability, but disputed causation and damages at trial. The trial proceeded before a jury for eleven days. The Plaintiff made claims for past and future income losses, loss of competitive advantage, future health care costs and general damages. At trial, the Plaintiff was awarded $29,000 for past income losses, $4,000 for future lost income, and $20,000 for general damages. After applying the deductible, the Plaintiff net $0 in general damages. The Plaintiff also received $41,600 in income replacement benefits, which was deducted from the income losses, resulting in a net award of $0 for her income losses. As such, the Plaintiff’s action was dismissed.

The parties were unable to settle costs, which was the subject of this hearing.

Position of the Defendant

The Defendant argued that it was successful, and that therefore, it should receive its costs on a partial indemnity basis in the all-inclusive amount of $160,000. This had been significantly reduced from the Defendant’s bill of costs, which showed fees on a partial indemnity scale at over $215,000 and disbursements of over $65,000.

The Defendant looked at the factors to be considered under Rule 57.01 in support of its argument. These factors included:

The Defendant also provided a number of precedent cases to show that the Court has awarded costs to the successful Defendant in the range of $130,000 to $175,000 in similar cases.

Position of the Plaintiff

The Plaintiff, by contrast, argued that she was covered by a costs protection policy that covers up to a maximum of $100,000 of the Defendants costs. She took the position that costs should be limited to that amount because she does not own any assets to satisfy an order in excess of that amount, though no support for this was produced.

The Plaintiff further argued that the Defendant’s offer to settle on a dismissal without costs basis was unreasonable and that it did not try to resolve the matter in a reasonable manner. No other factors from the Defendant’s costs outline (including the number of hours claimed, the hourly rate, or the disbursements) were disputed. Further, the Plaintiff did not provide a bill of costs from her own lawyer.

Analysis

The Court stated that “[t]he existence and the amount of adverse costs insurance is an irrelevant factor in the fixing of costs” (para 16). It was further noted that the insured party under the policy was the law firm, and not the Plaintiff herself. The Court indicated that neither the law firm nor the Plaintiff could limit the amount of costs to which a successful defendant might be entitled by limiting their insurance coverage. There was no indication that the Plaintiff’s lawyers were prepared to limit its costs claim to $100,000 had the Plaintiff been successful.

The Court commented that to allow a plaintiff to escape the costs consequences of an unsuccessful claim by limiting costs exposure to the policy limit “would undermine the purpose of costs to promote settlement” (para 19).

Conclusion

The Court ultimately concluded that the Defendant’s offer to settle was reasonable, whereas the Plaintiff’s was not.

The costs endorsement in Mundinger v. Ashton serves as a reminder for Plaintiffs to consider cost consequences when deciding whether to litigate a case and encourages serious effort to explore the early resolution of claims.

Exit mobile version