Adverse Costs Insurance an “Access to Justice Issue” -Stewart et al. v. Wood et al., 2019 ONSC 3931

August 13, 2019, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Adverse Costs Insurance an “Access to Justice Issue” -Stewart et al. v. Wood et al., 2019 ONSC 3931

Date of Decision: June 25, 2019
Heard Before: Justice Tausendfreund

ACCESS TO JUSTICE ISSUE: adverse costs insurance access to justice issue; premiums a compensable disbursement

Mr. Stewart, the plaintiff, was driving along an unlit road at night on his way to work when he came on two horses on the road. One horse managed to escape, hit struck the other with the car. The crash severely damaged the car and killed the horse. Mr. Stewart suffered concussion and soft tissue injuries to his neck and back.

The hose killed was owned by Ms. Wood was a renter of the property that the horses lived at. No one knows how the horses came to be lose on the road. Until the date of settlement of the case liability was the contested issue. The owners and landlords of the property took the position that they were not liable as owners and landlords of the property.

Mr. Stewart was not able to return to work for 2.5 years at his job at a factory earning $11 an hour. At the age of 38 he had recently retrained as an electrical technician and was in the process of applying for work in his field. His injuries resulted in his not being able to complete aptitude tests for a job he had applied for. He eventually returned to work and is on track to earn a similar wage as he would have had he not had the accident.

Both sides offered to settle the claim. The parties agreed on the Plaintiff’s damages of $75,000 with costs and disbursements to be assessed by the court.

The Court found that adverse costs insurance was an ‘access to justice’ issue and a recoverable disbursement. Justice Tausendfreund decided in the matter that the insurance premium of $1,458 that the Plaintiff paid to obtain the $100,000 coverage for possible adverse costs insurance was compensable disbursement. The Defendants had argued that the law was settled and insurance premiums were not recoverable disbursements.

In the decision Justice Tausenfreund stated that,

 “ …I disagree. There are conflicting opinions on this issue. Milanetti, J., Reilly, J. and Firestone, J. respectively in Markovic v. Richards, 2015 ONSC 6983, Foster v. Durkin, 2016 ONSC 684 and Valentine v. Rodriguez-Elizalde, 2016 ONSC 6395 each held that the premium for adverse costs insurance is not to be reimbursed by the Defendants as a compensable disbursement. I then turn to Armstrong v. Lakeridge Resort Ltd., 2017 ONSC 6565. Salmers, J. in that decision held that the costs insurance premium was a compensable disbursement. Salmers, J. noted at para 21:  “Without costs insurance, the fear of a very large adverse costs award would cause many Plaintiffs of modest means to be afraid to pursue meritorious claims. It is in the interests of justice that Plaintiffs be able to pursue meritorious claims without fear of a potentially devastating adverse costs award.”

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