Boomerang Hardballs

In litigation, people are sometimes tempted to play "hardball" by taking a recalcitrant negotiating position and sticking to it no matter what. This frequently proves to be a bad strategy. In his extensive research on error-making in litigation settlement negotiations, Randall Kiser has demonstrated that, while individual litigants make more negotiating errors, sophisticated corporate litigants make bigger and more costly mistakes.

In May, the Ontario Superior Court decided a case that illustrates Kiser's point. The case of Lachapelle v. St. Laurent Automotive Group Inc., 2025 ONSC 2879 involved an employee who was constructively dismissed after a COVID layoff. The employee advanced two settlement offers to his employer, both of which were lower than the subsequent $65,610 court award. The employer fought the case tooth and nail, sometimes using tactics that the court considered to be "hard ball". When it came time for the Court to award legal costs to the plaintiff, the employer's hardball turned into a boomerang, catching the company right between the eyes with an extra $62,000.

Amongst the observations made by the Court in its ruling on costs compensation are these telling tidbits:

a. "In some cases, and this is one of them, because of a party’s refusal to negotiate a reasonable resolution... a party might have no option but to keep incurring legal fees and disbursements despite what may be recovered from the unsuccessful party to advance his or her claims."

b. "In such cases where defendants can afford to play hard ball irrespective of reasonable offers made by plaintiffs, it is not clear whether such limits on the amount of costs that may be recovered from the other party improve or impede access to justice. Fully facing the costs consequences or one’s unreasonable settlement positions might motivate early resolution and improve access to justice."

c. "As litigation between these parties went on, it should have been apparent to the defendant from the litigation history of this matter that the actual costs incurred by the plaintiff would be high and that if unsuccessful, the defendant might very well have to pay amounts in the range of the maximum amounts allowed..."

d. "Frankly, but for the limits imposed on costs imposed by r. 76.12.1, I would have found it fair and proportionate to order the defendant to pay more in costs, something more reflective of its unsuccessful hardline approach."

The moral of the story? Randy Kiser is right: many litigants make negotiation errors, and some are big. Every hardball negotiator should be aware of the "hardball boomerang" effect.

This hardball could be a boomerang