Litigation is an expensive business. It is not for the risk-averse or the faint of heart. There are winners and there are losers. And it is a well-established convention in our civil justice system that losers pay the winners a significant portion of their costs.
Wrongful dismissal cases are especially perilous; especially where the defendant employer alleges cause for dismissal.
So what happens when the employee loses? Is the reasonableness of the plaintiff’s position a relevant factor in awarding costs of the case?
In Goruk v. Greater Barrie Chamber of Commerce,2021 ONSC 6290 (CanLII) Justice Cary Boswell held that it is.
Justice Boswell’s decision as referenced above was a decision on “costs” following Ms. Goruk’s unsuccessful wrongful decision case. Ms. Goruk had sued her former employer for wrongful dismissal, but Justice Boswell found that the Greater Barrie Chamber of Commerce had, in fact, had just cause to terminate her employment.
In terms of quantum, the defendant sought $182,750 in partial indemnity costs, inclusive of fees, disbursements and HST. According to the defendant’ costs outline it incurred disbursements of $2,728.67. Backing the disbursements out of the total sought, leaves $180,021.33. Of that sum, $159,310.91 would be fees, with the balance being HST. The question therefore, is whether $160,000 in fees is a fair, proportionate and reasonable amount for costs in all of the prevailing circumstances.
Before turning to the plaintiff’s arguments as to why that number should be reduced, Justice Boswell noted that he confessed that, in his view, “in today’s litigation environment, partial indemnity fees of $160,000 do not immediately strike me as unreasonable for a million dollar case that took thirteen days to try.”
Decision of the Ontario Superior Court
Justice Boswell went to pains to describe the decision as a “close call.” In fact, he says so three times in his rather short reasons for decision.
So what to make of that fact? Here are Justice Boswell’s reasons:
 The plaintiff advances, in mitigation of the quantum of any costs awarded, the argument that her claim, while unsuccessful, was nevertheless reasonable. I agree. As I have said, this was a close call. Her case, though unsuccessful in the end, was a reasonably compelling one.
 The plaintiff did not provide the court with any case law to support the position that the reasonableness of a losing party’s position can or should be taken into account in the exercise of the court’s discretion to fix costs, or how such a consideration might be factored in.
 The court’s discretion to award and fix costs is a broad one, certainly wide enough to take into account a range of relevant factors. In my view, the reasonableness of the plaintiff’s position in this case is a relevant factor, because it touches on access to justice issues.
 This was a wrongful dismissal action. There is almost always a power imbalance in employment cases in favour of the employer. That was the case here, even though Ms. Goruk was represented by skilled and experienced counsel. The inherent power imbalance in these types of cases raises a heightened concern about access to justice. Future dismissed employees may look to cases like this one and be scared away from advancing legitimate claims due to the risk of facing a crushing costs award in the event of a loss.
 Having said that, it remains a difficult reality that litigation is an expensive business. It is not for the risk-averse or the faint of heart. There are winners and there are losers. And it is a well-established convention in our civil justice system that losers pay the winners a significant portion of their costs. Ms. Goruk knew that going into this case. She would have had a good sense, I am sure, of what costs were at stake.
 The defendant was successful and is entitled to an award of costs. The defendant ought not to have to pay the price for any under-estimation of risk on the part of the plaintiff. At the same time, I am prepared to take into consideration the negative impact that crushing costs awards may have on access to justice. The balance is not an easy one. There is no getting around the fact that the defendant is entitled to a significant costs award in its favour. Factoring in the reasonableness of the plaintiff’s claim results, in my view, in a modest reduction in the amount to be awarded in all the circumstances of this case.
 There is no “perfect” number to be fixed in this case. All things considered, I am of the view that a fair, reasonable and proportionate costs award in favour of the defendant is $125,000 for fees, plus HST of $16,250 and disbursements of $2,728.67 for a total of $143,978.67.
“Litigation is an expensive business. It is not for the risk-averse or the faint of heart.” Yep. As I tell my plaintiff clients, especially individuals, “it takes a lot of courage to be a plaintiff.”
One can really see Justice Boswell struggling with this decision. But, and to His Honour’s point, costs follow the event and the defendant is entitled to its. Ms. Goruk had very experienced legal counsel, whom one has to assume advised her of the risks of losing.
Close only counts in horseshoes. But if you bring a not unreasonable wrongful dismissal action, perhaps you can have a discount on the amount that might otherwise be awarded against you as costs.
To reach the author of this blog, Sean Bawden, email email@example.com or call 613.238.6321 x233.
Sean P. Bawden is a partner with Kelly Santini LLP, located in Ottawa, Ontario, Canada. He is an experienced trial lawyer and trusted strategic advisor with respect to matters of employment law and commercial disputes.
As always, everyone’s situation is different. The above is not intended to be legal advice for any particular situation. It is always prudent to seek professional legal advice before making any decisions with respect to your own case.
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