Damages and costs

Damages

What rules and standards govern the calculation and award of damages?

The calculation of damages in Ontario is discretionary. Parties generally tender expert evidence to demonstrate a quantification of damages.

Are damages capped?

In general terms, damages are not capped, but must be proved by the plaintiff. In secondary market misrepresentation cases, the Ontario Securities Act (RSO 1990, c S5) sets a maximum amount that may be recovered from each director or officer: $25,000 or 50% of his or her aggregate compensation for the previous 12 months, whichever is greater.

Are punitive damages allowed?

Yes, punitive damages are permitted in Ontario proceedings where a party has demonstrated that the defendant has acted in a callous and high-handed manner, and/or has had wanton disregard for the plaintiff.

Other remedies

Are any other remedies available?

Declaratory and equitable relief is also available in Ontario.

Costs

Who bears the costs of proceedings? Can this burden be shifted in any way?

In Ontario, the losing party generally pays costs. The scale of costs is dependent on a number of factors, including whether a party beat an offer to settle, the conduct of the party during the litigation and whether fraud was pleaded and not proved.

How are costs calculated? Does interest accrue on costs?

Cost awards are discretionary. The court considers what an unsuccessful party could reasonably expect to pay in a similar case, taking into account the lawyers’ experience, hourly rates and actual time spent. The court may also consider:

  • the complexity and importance of the case;
  • the amount that the plaintiff claimed compared to what the court paid;
  • the conduct of the parties; and
  • whether one party is entirely liable or liability is divided.

The court generally awards ‘partial indemnity’ costs, which usually amount to less than 50% of lawyers’ fees. 

Substantial indemnity costs are higher than partial indemnity fees, but are usually awarded only where:

  • the winning party made an offer to settle prior to trial and obtains a more favourable judgment than the offer at trial; and/or
  • there has been reprehensible, scandalous or outrageous conduct by the losing party.

What rules and procedures apply to the provision of security for costs?

A party may move for security for costs under Rule 56.01 of the Ontario Rules of Civil Procedure where:

  • the plaintiff is ordinarily resident outside of Ontario; or
  • the plaintiff is a corporation or ‘nominal’ plaintiff and there is good reason to believe that it has insufficient assets in Ontario.

Security for costs is discretionary and a court may not grant it where the plaintiff can prove that it has sufficient assets in Ontario or it is impecunious, and that forcing it to post security for costs would bar it from having its claim proceed.

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