The decision in Barry v. Anantharajah (2024 ONSC 1267)^[1] stands out not because of the modest damages awarded at trial, but because of the substantial costs order that followed. The plaintiff, struck as a pedestrian in a crosswalk, advanced a claim exceeding one million dollars for physical, psychological, and economic loss. Her evidence included testimony from family, treating professionals, and multiple experts. The defendant, insured through Aviva, contested both liability and damages, calling expert witnesses of its own and vigorously challenging credibility and causation.

After three weeks of trial before a jury, the outcome was modest. The jury awarded just over $21,000 in general damages and $26,000 for past income loss, subject to a 15 percent contributory negligence finding and the statutory deductible for non-pecuniary damages. In the end, the plaintiff recovered approximately $16,000. On the face of it, the result might have suggested only a proportionate costs award, or even no costs, given Rule 57.05 and the ability of the court to consider whether the action should have been brought in a lower forum. Instead, Justice Mandhane awarded $300,000 in costs inclusive of fees, disbursements, and HST.

The reasoning provides insight into how Ontario courts can assess litigation strategy through the lens of fairness and settlement. Although the plaintiff had offered to settle shortly before trial for $500,000 plus costs, the defendant never made any monetary offer at all. Justice Mandhane referred to authorities such as Wray v. Pereira 2019 ONSC 3354^[2] to conclude that when a party chooses to offer nothing, it effectively establishes its own measure of success. Once the jury awarded any damages, the plaintiff had surpassed that measure. The court also noted that the insurer’s own expert psychiatrist conceded the accident caused psychological injury for more than a year, making it foreseeable that some damages would be awarded. Against that background, the absence of any settlement offer weighed heavily in the costs analysis.

Another important factor the trial judge considered was the use of court resources. The matter occupied three full weeks of trial time and required a jury to deliberate extensively. Justice Mandhane emphasized that proportionality was not determinative in circumstances where the lack of any settlement offer effectively necessitated trial. While the plaintiff’s costs request was reduced for duplication of counsel, the overall award was set at a level the court considered fair in light of the years of litigation, the complexity of the medical and credibility issues, and the decision not to engage in meaningful settlement discussions.

The case is significant for mediation in Ontario. It demonstrates that in Ontario’s cost regime, the judge’s perception of the reasonableness of settlement behaviour can matter as much as the eventual outcome at trial. Even when damages are low, a complete refusal to make an offer carries risk. For mediators, this decision underscores the importance of encouraging parties to consider proportional, good-faith proposals. It also illustrates the role that costs awards can play in promoting settlement and discouraging litigation strategies that extend matters unnecessarily.

The story is not yet complete. The Ontario Court of Appeal granted leave to appeal the costs ruling in June 2024, and reasons are expected soon^[3]. The appellate decision will determine whether the trial ruling represents a broader shift toward using costs to penalize perceived unreasonable settlement conduct, or whether proportionality will remain the stronger limiting principle. Either way, Barry is an important reminder that costs are not simply mathematical—they reflect the court’s view of how the litigation has been conducted, and they can dramatically reshape the outcome of a case.