Costs follow event

In general terms, in Ontario civil law, the loser pays costs. That general rule can be displaced by formal offers to settle made under R 49, but absent an applicable offer to settle, the loser pays rule applies.

Some have argued that where a claim is only modestly successful the costs should be to the defendant -- on the basis that the defendant "really won".

That argument fails, as we learn from Key Designs v. Zovko, 2010 ONCA 487.

Here the plaintiff succeeded, albeit modestly, and the defendant claimed it should succeed and get costs. The Court of Appeal said nay. That said, the Court did approve a reduced amount for costs as a result of the modest success.

The Court held:

[8]  ... The respondents also challenge the trial judge's costs award. They say that they were substantially successful in the damages trial and that they should receive costs of approximately $190,000.

[9]  ... As for costs, the important point is that the appellant was successful in the action, albeit modestly so. Accordingly, a modest costs award of $40,000, far below the $288,000 sought by the appellant, seems appropriate to us.