Can I demand that the other side pay my legal fees in a demand letter in Ontario?

Yes, you can include a demand for legal fees or costs in your demand letter, but whether you are entitled to recover them depends on the outcome of any litigation, not just on what you ask for. In Ontario, costs in civil litigation are generally at the discretion of the court, and a successful party is not automatically entitled to full reimbursement of all legal fees.

Ontario courts typically award "partial indemnity" costs to the winning party, which means a fraction of actual legal fees rather than the full amount. In some circumstances, such as when a party has behaved unreasonably or in bad faith, courts may award "substantial indemnity" costs. In Small Claims Court, costs awards are modest and capped by regulation.

In your demand letter, it is reasonable to include a line indicating that you intend to seek legal costs if the matter proceeds to court and you prevail. This can motivate the other side to settle. However, be realistic about how much a court is likely to award — overstating your anticipated costs recovery can undermine your credibility.

Before demanding costs recovery, speak with a lawyer to understand what courts typically award in matters like yours and to structure your claim accordingly.