When individuals suffer due to someone else’s action or inaction, they may be entitled to compensation. However, there are several factors that can reduce the damages they may be entitled to, or eliminate them entirely. The two main legal principles that are paramount in assessing liability are causation and mitigation.
Causation establishes the necessary link between a defendant’s actions, or inactions, and a plaintiff’s injuries, while the duty to mitigate requires the plaintiff to take reasonable steps to avoid further losses. The plaintiff cannot recover damages for losses that could have been reasonably avoided by their own actions. A recent judgment in Barkley v. Sloan et al., 2025 ONSC 6057 highlights why the plaintiff’s responsibility to avoid or minimize loss is critical.
In Barkley – a professional negligence action between a plaintiff and her former lawyer – the Court found that the plaintiff’s former lawyer’s advice fell below the standard expected of a reasonably competent practitioner. He misunderstood an IRB calculation under the SABS and failed to fully advise his client about the implications of settling the action before her prognosis became clearer. Despite this finding, the claim was dismissed.
In terms of causation, the burden is on the Plaintiff to demonstrate that had she received proper legal advice, she would have proceeded in a way that avoided the damages suffered or obtained the benefit lost as a result of the negligent advice. The Court held that the Plaintiff could not demonstrate that she would have declined the accident benefits settlement even with proper advice. The evidence showed that she was experiencing financial difficulty, she was eager to resolve the matter and inclined to accept the certainty of a lump-sum payment. If her lawyer had given correct advice, she likely would have made the same decision regardless.
Beyond causation, the Court emphasized a plaintiff’s duty to mitigate. The legal consequence of an unreasonable failure to mitigate is severe. Losses that could reasonably have been avoided are, in effect, caused by the plaintiff’s behaviour rather than the defendant’s wrongdoing. Consequently, the plaintiff cannot recover losses they could have reasonably avoided. Here, when the Plaintiff later retained new counsel, she had the opportunity to challenge or set aside the accident benefits settlement on the basis that she had not been properly advised. But she chose not to take that step and her inaction broke the chain of causation. The Defendant argued that the Plaintiff failed to mitigate her damages by not exercising her options for setting aside the SABS settlement. The Court concluded that it was the Plaintiff’s inaction that caused her losses. Her failure to mitigate resulted in her claim against her former lawyer being dismissed.
Further, the Court noted that she ultimately resolved her tort claim for over $1.5 million, a settlement that fully compensated for the loss she claimed to have missed because of her lawyer’s negligence. Allowing her to recover those same losses again would result in double compensation.
Barkley v Sloan serves as a reminder that plaintiffs bear the responsibility of proving that a lawyer’s error caused a loss and for taking reasonable steps to avoid that loss once it becomes apparent. For lawyers practicing personal injury and insurance law, this case emphasizes the importance of clear advice, thorough documentation, and careful explanation of settlement risks.
This blog is the second in a series on Barkley v Sloan. To read Elisa Prezzano’s first blog on professional negligence in Accident Benefits claims, please click here. If you have a question about the responsibility held by the Plaintiff in avoiding loss, please contact Elisa Prezzano at 437-562-2529.
