Who pays legal costs if I win or lose a civil lawsuit in Ontario?
Ontario follows a "loser pays" approach to costs, meaning the party that loses a case typically must pay a portion of the winning party's legal costs. However, courts do not award full reimbursement of every dollar spent — courts award costs on either a "partial indemnity" basis (a lower, more common scale) or a "substantial indemnity" basis (a higher scale reserved for cases involving misconduct or offers to settle that were unreasonably rejected) — the exact amount is always in the court's discretion.
Costs awards are discretionary. The court considers factors including the outcome of the case, the reasonableness of the parties' conduct, the complexity of the issues, and whether reasonable settlement offers were made. Making a reasonable written settlement offer (a "Rule 49 offer" in Superior Court) can protect you: if you offer to settle and the other side refuses, then achieves a result no better than your offer at trial, they may be ordered to pay your legal costs on a higher scale from the date of the offer.
Key takeaways
- Ontario uses a "loser pays" approach, but courts award only partial reimbursement.
- Partial indemnity is the standard, more common scale; substantial indemnity is a higher scale reserved for misconduct or rejected settlement offers — the court always retains discretion over the amount.
- Making a formal settlement offer can protect you against adverse costs later.
- Costs are discretionary — conduct and reasonableness throughout the case matter.