Ontario Court: Furtado v. DeSousa Full Indemnity Costs Fixed

• The Ontario Superior Court fixed full indemnity costs at $74,934.33 for a defendant in a motor vehicle accident case.
• The case involved a plaintiff injured in a collision, who settled with one defendant via a Pierringer agreement for $150,000.
• A jury awarded total damages of $415,500, which was reduced to a net award of $359,740 after deducting collateral benefits.
• The court ruled that the full indemnity costs should not exceed the plaintiff's 30% contingency fee, calculated at $107,922.
• To prevent double recovery, the judge deducted the fixed costs from the settlement amount, then the remainder of the settlement from the net jury award.

To prevent double recovery by the plaintiff, Judge Heeney first deducted the fixed full indemnity costs of $74,934.33 from the $150,000 settlement sum paid by Ms. Masschelein.

The Ontario Superior Court recently addressed the complex issue of full indemnity costs in a motor vehicle accident case, Furtado v. DeSousa, arising from a collision on an icy road. The plaintiff, a passenger in Mr. DeSousa's vehicle, sustained extensive injuries when Mr. DeSousa failed to stop at an intersection, leading to a violent impact with a car driven by Ms. Masschelein, who had the right-of-way. The plaintiff subsequently initiated legal action against both Mr. DeSousa and Ms. Masschelein for damages.

Prior to trial, the plaintiff and Ms. Masschelein reached a settlement through a Pierringer agreement, with Ms. Masschelein agreeing to pay $150,000. A jury later awarded the plaintiff total damages of $415,500. From this sum, $55,760 was deducted for collateral benefits, specifically accident benefits previously recovered by the plaintiff, resulting in a net jury award of $359,740. This deduction ultimately benefited Mr. DeSousa.

In an earlier ruling on June 10 (2026 ONSC 3356), Judge Thomas A. Heeney determined that Mr. DeSousa could reduce his liability by the $150,000 settlement amount, after accounting for any full indemnity costs Ms. Masschelein was obligated to pay the plaintiff. This set the stage for a subsequent assessment of those specific costs, which became a focal point for the court.

On August 27, in a decision cited as 2026 ONSC 4916, Judge Heeney of the Superior Court fixed the full indemnity costs payable by Ms. Masschelein at $74,934.33. This determination followed submissions from counsel on two key issues impacting the motor vehicle accident cost assessment.

The first issue concerned the potential impact of the plaintiff's contingency fee retainer agreement on the costs allocation. This agreement stipulated a 30 percent contingency fee on any settlement or award, excluding amounts specifically designated for disbursements and taxes. Judge Heeney ruled that the full indemnity costs award should not surpass the contingent fee for the plaintiff's counsel, which was calculated to be at least $107,922, representing 30 percent of the net jury award of $359,740.

The second issue raised by counsel involved whether the plaintiff's $5,552 in costs incurred while pursuing statutory accident benefits should be factored into the assessment of full indemnity costs payable by Ms. Masschelein. The judge declined to address these specific costs in this context, noting that Ms. Masschelein did not benefit from the recovered amounts. He clarified that the plaintiff could potentially revisit this matter in a separate proceeding focused on costs payable by Mr. DeSousa, indicating a lack of sufficient information to rule on it at that juncture. The judge attributed 25 percent of the costs incurred up to the settlement date to Ms. Masschelein.

A critical aspect of the ruling in Furtado v. DeSousa full indemnity costs Ontario involved preventing double recovery by the plaintiff. To achieve this, Judge Heeney first deducted the fixed full indemnity costs of $74,934.33 from the $150,000 settlement sum paid by Ms. Masschelein. The remaining balance of $75,065.67 from that settlement was then deducted from the plaintiff's net jury award of $359,740.

Addressing concerns about proportionality, Judge Heeney acknowledged that the fixed costs might initially appear high relative to the amount recovered. However, he justified the figure by highlighting a significant 'Correia disbursement' included in the total. This particular disbursement was substantial and allocated entirely to Ms. Masschelein because it pertained exclusively to her liability issues. This decision provides valuable insight into how courts manage Pierringer agreement costs Ontario, particularly concerning the interplay between settlement deductions and the prevention of double recovery settlement deduction in complex multi-defendant cases.

This decision provides critical guidance for personal injury lawyers in Ontario on the assessment and allocation of full indemnity costs, particularly concerning the interplay between Pierringer agreements, contingency fee retainers, and the prevention of double recovery in multi-defendant motor vehicle accident cases. It offers insight into how courts may deduct settlement amounts and allocate specific disbursements, informing advice on settlement strategies and potential cost exposures.

Source: Original reporting via Canadian Lawyer Magazine