A Caution to Insurers on Defensible Programs

  • March 09, 2020
  • Christine M. Galea, Dolden Wallace Folick LLP

As lawyers, we are familiar with the usual cost consequences arising from civil lawsuits in Ontario: the loser pays.  Of course, the court has the discretion to depart from the norm in certain circumstances.

Section 131(1) of the Courts of Justice Act authorizes the court to determine by whom and to what extent costs shall be applied, whereas Rule 57.01 of the Rules of Civil Procedure sets out the various factors to be considered and also grants the court a broad discretion to take into account “any other matter relevant to the question of costs”.

As many in the insurance defence industry are aware, in recent years some insurance companies have implemented strict policies of not paying any monetary amount to settle claims that are categorized as defensible.  For example, if the insurer assesses zero liability against its insured for the accident, the insurer’s bottom line for settlement is a dismissal without costs. One would expect that if the claim is proven defensible at trial, the defendant/insurer would be awarded costs in the usual course. This, however, was not the outcome in the recent case of Przyk v. Hamilton Retirement Group Ltd., 2019 ONSC 7498 (“Przyk”).