How auto accident defendants who admitted liability were awarded $61,000 in costs

TORONTO – A woman awarded $50,000 by a jury for injuries suffered in a car crash will have to pay more than $61,000 to cover the costs of the two men she sued, even though losers in a lawsuit are normally on the hook for the winner’s legal bills.

In upholding a lower court ruling, the Ontario Court of Appeal on Wednesday deemed Ashley Dermann unsuccessful in her suit despite her winning the jury award in the case she brought against Daniel and Graham Baker  defendants who admitted liability.

Court records show Dermann turned down a $150,000 proposed settlement in October 2017. A month later, the Bakers paid her $20,000 in advance of any jury award.

Following trial before now-retired Superior Court justice Thomas Lofchik in Hamilton, the jury awarded her $50,000. However, in accordance with statutory deductions in the province’s Insurance Act, Lofchik cut the award by almost $38,000, leaving her with $12,000.

Given the $20,000 already paid her in advance, Lofchik entered a “$nil” judgment for Dermann. He then ordered her to pay $61,801 for the Bakers’ costs on the basis that she had found herself in the same position as someone whose lawsuit fails.

Dermann appealed, arguing the judge had made legal errors in his costs assessment. She maintained she had in fact been successful in her lawsuit because the jury award, while lower than the pre-trial offer to settle, was still higher than the statutory deductible.

As a result, Dermann maintained normal rules should apply: The Bakers should be responsible for her legal bills until the date of their rejected offer and she for theirs after that date.

The Appeal Court, however, said the rule regarding costs in cases of rejected offers doesn’t apply when the plaintiff does not recover any judgment.

Key to assessing costs when a defendant makes an offer to settle is the actual judgment. In this case, the court said, the judgment in Dermann’s favour was “$nil.”

“The costs consequences flowing from a defendant’s offer to settle depend on the judgment obtained,” the Appeal Court ruled. “It was therefore not an error for the trial judge to consider (Dermann) to be in the same position for costs purposes as she would have been had the action been dismissed.”

Lofchik made no errors in his costs analysis, the appellate court said.

Dermann also lost her bid for a new trial after alleging several procedural irregularities.

She will also have to pay the Bakers a further $15,000 in costs for her failed appeal.