If you lose a civil case in Ontario, you may face more than an unfavourable judgment. Depending on whether you were the plaintiff or defendant, you may lose your claim, be ordered to pay damages or other relief, and be required to pay part of the successful party’s legal costs. The amount of any costs award is determined by the court.
Will I have to pay the other side’s legal fees?
Possibly. In Ontario civil litigation, the successful party will often seek a costs award, but the unsuccessful party does not automatically pay every dollar of the other side’s legal bill.
Section 131 of the Courts of Justice Act gives the court discretion over costs. Rule 57 of the Rules of Civil Procedure identifies factors the court may consider, including the result, written settlement offers, the complexity and importance of the proceeding, the conduct of the parties, the amount claimed and recovered, and what an unsuccessful party could reasonably have expected to pay.
For a detailed explanation of this part of litigation, see Costs Awards & Cost Recovery.
What affects how much I may have to pay?
The financial consequences of losing depend on how the case was litigated as well as the final result.
A court may consider:
- whether the case was resolved on a motion or after a full trial;
- the complexity and duration of the proceeding;
- whether the parties acted reasonably;
- the amount at stake compared with the result obtained;
- settlement offers made during the proceeding; and
- whether unnecessary steps increased the cost of the litigation.
A particularly important consideration is a formal Rule 49 Offer to Settle. Rule 49 can create significant costs consequences where a party rejects an offer and then fails to obtain a result more favourable than the offer at the hearing. Depending on which party made the qualifying offer and the eventual judgment, the Rules can alter the costs payable before and after the offer date.
Scenario A — You lose a motion but the lawsuit continues
Not every loss means the entire case is over.
For example, a party may lose an interlocutory motion, procedural motion, or other step in the proceeding and receive a costs award for that particular step. The underlying claim or defence may still continue.
The strategic question then becomes whether the ruling changes the strength, economics, or direction of the remaining litigation.
Scenario B — You lose the case at trial or final adjudication
If you are a plaintiff and your claim is dismissed, you may recover nothing and may also face an adverse costs award.
If you are a defendant and judgment is entered against you, you may be ordered to pay the damages or other relief awarded by the Ontario Superior Court of Justice, together with applicable costs.
If you are defending an existing proceeding, Defending a Civil Claim in Ontario explains the broader defence process and strategic considerations.
Scenario C — You lose after rejecting a settlement offer
The costs exposure may become more significant where a qualifying Rule 49 Offer to Settle was rejected and the eventual judgment triggers the Rule’s costs consequences.
This is why a settlement offer should not be assessed only by asking whether you believe you can win. Counsel should also assess the potential judgment, litigation costs, evidentiary risks, and the possible consequences of continuing rather than settling.
Does losing mean the court thought my case was unreasonable?
No. A party can lose a legitimate civil dispute because of the governing law, evidentiary findings, credibility findings, contractual interpretation, failure to prove an essential element, or another issue determined by the court.
An adverse judgment is therefore not automatically a finding that bringing or defending the case was improper.
For an overview of the stages at which those issues can arise, see What is civil litigation in Ontario?.
How does ME Law assess the risk of losing and adverse costs?
Cost exposure should be assessed throughout the litigation, not only after judgment.
ME Law considers the strength of the claim or defence, available evidence, procedural developments, settlement opportunities, potential recovery or exposure, and the effect of Rule 49 offers when advising on litigation strategy.
The objective is to understand both the legal merits and the economic consequences of continuing, settling, narrowing, or defending the proceeding. Proper representation is particularly important where an adverse judgment could carry significant damages and costs consequences.
Contact ME Law if you need advice about the risks, costs, or strategy involved in an Ontario civil proceeding.