FCL LLP congratulates Partner Voula Kotoulas on her recent success before the Ontario Court of Appeal in Levac v James, 2023 ONCA 73.

This class action initially arose from an infectious disease outbreak at the Rothbart Centre for Pain Care in Toronto. The outbreak stemmed from epidural injections administered by the appellant anesthesiologist, Dr. Stephen James (“Dr. James”). The injections were administered in an area close to the spine as a pain relief treatment. After receiving the injections, patients subsequently developed meningitis and an abscess in or around their spine among other serious infections. An investigation later found that the outbreak was caused by inadequate Infection Prevention and Control in respect of the injections designed to reduce the risk of transmission of microorganisms in health care settings.

In 2021, Voula successfully defended nurses in Ontario’s first common issues trial for a medical malpractice class action in Levac v James, 2021 ONSC 5971. At trial, Justice Morgan held that there was no sustainable legal claim against any of the nurses and made a Sanderson Order, which required Dr. James to pay the nurses’ legal costs. Dr. James sought leave to appeal the Sanderson Order.

On appeal, Voula successfully persuaded the Court of Appeal to deny Dr. James leave to appeal Justice Morgan’s decision on costs. For context, Dr. James launched a crossclaim against the nurses in the initial action. At trial, Dr. James was found to be driving the case against the nurses and was considered by Justice Morgan to be primarily responsible for their remaining in the action. These proved to be key factors in Justice Morgan’s order that Dr. James pay the nurses’ costs. On appeal, Sossin J.A., for a unanimous Court, upheld the Sanderson Order and denied Dr. James leave to appeal. In this regard, Sossin J.A. broadly held that the general rule that costs follow the event is equally applicable to class proceedings in Ontario, even where liability may ultimately be rebutted in respect of the individual trials of class members. Sossin J.A. observed that Dr. James, in oral argument on appeal, still expressed an intention to pursue his claims against the nurses if evidence of the nurses’ negligence was adduced at the individual trials despite Justice Morgan’s finding that Dr. James’ case against the nurses was “remarkably thin” and disclosed “no sustainable legal claim.” Further, Sossin J.A. highlighted the deference afforded to trial judges on the issue of costs.

Finally, Sossin J.A. rejected Dr. James’ contention that Justice Morgan had no basis to award the nurses’ costs on a substantial indemnity basis. In awarding substantial indemnity costs at trial, Justice Morgan paid particular attention to the fact that the nurses had made an early attempt to settle the claims against them on a without costs basis and that there was no basis for Dr. James to keep them in the action. Sossin J.A. saw no potential error in Justice Morgan’s assessment of the amounts as “extremely reasonable” and “relatively modest;” likewise, Sossin J.A. observed the deference afforded to trial judges in the context of costs.