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Scale of Costs Thrown Away

Costs thrown away are the payment of a party’s costs for wasted preparation for a trial or other hearing, such as when there is an adjournment or a mistrial.

Counsel often assume that costs thrown away are fixed on a partial indemnity scale, and the courts often award costs thrown away on such a scale.

However, in the recent case of Nelson v. Chadwick, 2019 ONSC 4544, Justice Verbeem stated that costs thrown away are generally payable on a full or substantial indemnity basis.

Similarly, in Oz Merchandising Inc. v. Canadian Professional Soccer League Inc., 2016 ONSC 4272, Justice Hackland indicated:

The term ‘costs thrown away’ normally connotes complete indemnification although, the court has a residual discretion to order otherwise.  The complete indemnification does not flow from any misconduct on the defendants’ part as both parties seem to suggest in their written submission, rather it simply means cost unnecessarily and uselessly incurred by the defendants’ actions ie. costs that were thrown away.  The plaintiffs are entitled to be reimbursed for such expenditures on a full indemnity basis.

In Emami v. Furney, 2019 ONSC 1731, Justice Faieta indicated that, “while other courts have expressed the view that costs thrown away should be awarded on a full indemnity basis, it is my view that the scale of such costs must be determined on a case by case basis…”.

Overall, costs thrown away should generally be fixed on a full indemnity basis, subject to the court’s discretion to order otherwise.