Originally published on Slaw.
In a recent defamation decision, the plaintiff spent nearly $550,000 on legal fees only to recover a $10,000 judgment. The plaintiff was not alone in racking up a large legal bill. The defendant spent nearly $250,000 on legal fees defending the claim.
After the conclusion of trial both sides sought their legal costs from the other side.
The plaintiff argued that it was successful in the result and therefore ought to be entitled to costs.
The defendant argued that the plaintiff should have brought its case in Small Claims Court, or under the Simplified Procedure, and should not be awarded any costs (and in fact that the defendant should have its costs as a result).
The decision provides a nice overview on the law of costs in the province of Ontario, including the principles which inform the court's decision making, how offers to settle factor into the analysis, and how brining a lawsuit in the wrong monetary jurisdiction can have significant consequences.
The court found the case to be a battle of egos and about "turf warfare in the competitive world of diet medicine" rather than about reputation.
In the result, the court ordered each party to eat their own costs.
The case is a good lesson in how adjudicating over principle can be an expensive proposition.
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