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Case Summary: Stewart et al. v Wood et al
Defence + Indemnity

The premium that a plaintiff pays for plaintiff adverse costs insurance may be a taxable disbursement in the litigation.

Stewart et al. v. Wood et al., 2019 ONSC 3931, per Tausendfreund, J.


The parties settled a personal injury action three weeks before trial for $75,000 plus costs to be assessed by the Court. The Plaintiff claimed the cost of the premium for adverse plaintiff costs insurance of $1,458 for coverage of up to $100,000. The Defendants disputed that this was a taxable disbursement.

HELD: For the Plaintiff; Cost of Plaintiff adverse costs insurance allowed.

The Court held that the premium paid for adverse costs insurance is a taxable disbursement available to plaintiffs in litigation, as an access to justice issue:

[23]  The Plaintiffs seek costs at partial indemnity rates in the amount of $95,096 plus HST of $12,362 for a total of $107,458. They also seek disbursements of $29,070. Included in the list of disbursements is the insurance premium of $1,458 the Plaintiffs paid to obtain $100,000 coverage for possible adverse costs insurance. The Defendants state that it is settled law that such an insurance premium is not a recoverable disbursement. I disagree. There are conflicting opinions on this issue. Milanetti, J., Reilly, J. and Firestone, J. respectively in Markovic v. Richards, 2015 ONSC 6983 (CanLII), Foster v. Durkin, 2016 ONSC 684 (CanLII) and Valentine v. Rodriguez-Elizalde, 2016 ONSC 6395 (CanLII) each held that the premium for adverse costs insurance is not to be reimbursed by the Defendants as a compensable disbursement. I then turn to Armstrong v. Lakeridge Resort Ltd., 2017 ONSC 6565 (CanLII). Salmers, J. in that decision held that the costs insurance premium was a compensable disbursement. Salmers, J. noted at para 21:

“Without costs insurance, the fear of a very large adverse costs award would cause many Plaintiffs of modest means to be afraid to pursue meritorious claims. It is in the interests of justice that Plaintiffs be able to pursue meritorious claims without fear of a potentially devastating adverse costs award.

[24]  I find adverse costs insurance to be an “access to justice” issue. For that reason, I hold it to be a compensable disbursement to be included as a costs obligation payable to the Plaintiffs. This amount is $1,458.


The Court noted that there are conflicting judicial decisions on this point. It remains to be seen how this will be decided in Alberta.