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 (roughly 40–60% of actual costs) or a "substantial indemnity" basis (roughly 75–90% of actual costs), which is reserved for cases involving misconduct or offers to settle that were unreasonably rejected.
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 (roughly 40–60%) is standard; substantial indemnity (roughly 75–90%) is for misconduct or rejected offers.
- Making a formal settlement offer can protect you against adverse costs later.
- Costs are discretionary — conduct and reasonableness throughout the case matter.