Reasonable Mitigation Obligations:

Question: How does the duty to mitigate losses work in an Ontario lawsuit if I believe the other party is causing the damages?

Answer: In Ontario, the duty to mitigate requires a person harmed by another party’s wrongful conduct to take reasonable steps to minimize their losses, and they generally cannot recover portions of damages that could reasonably have been avoided; the Supreme Court explained this in Southcott Estates Inc. v. Toronto Catholic District School Board, [2012] 2 S.C.R. 675 (paras. 23 to 25), and if a defendant argues failure to mitigate, it must plead the allegation in its defence and prove that mitigation was possible and the plaintiff had a reasonable opportunity to take such steps   but the plaintiff does not need to mitigate perfectly, only reasonably at the time losses are occurring (not with hindsight); for practical guidance on building or responding to a mitigation position in your claim or counterclaim, Anderson Aylwin Begg & Co. can help with plain-language review of your situation and paralegal team support across Ontario, call (905) 686-8080 to get started.

The Duty to Mitigate Including the Standard of Efforts to Do So

In a conscientious society, reasonably minded persons prefer to avoid waste; and accordingly, the law imposes the principle of mitigation, being a duty to mitigate, upon a harmed party. This doctrine in law requiring efforts to mitigate applies to all matters of law including tort law, contract law, employment law, construction law, among other legal issues.

The Law

The duty to mitigate was articulated well by the Supreme Court within the case of Southcott Estates Inc. v. Toronto Catholic District School Board, [2012] 2 S.C.R. 675, where it was said that:

Accordingly, the duty to mitigate requires a harmed person to minimize the harm suffered.  Failure to minimize the harm may, and likely will, reduce the sum that the wrongdoer will owe the harmed person in a determination of liability at a court Trial.  As was explained above by the Supreme Court in the Southcott Estates case, where a failure to mitigate occurs, it is the failure of the Plaintiff to act reasonably to minimize the loss that caused a portion of the harm.   Simply said, where the Defendant does something wrong resulting in harm to the Plaintiff, the Defendant is responsible only for the portion of the harm that arises directly due to the wrongdoing of the Defendant and where a portion of the harm occurs or accrues because the Plaintiff failed to minimize that harm, the Plaintiff is at blame for the portion of the harm. 

Conclusion

The law required that a Plaintiff (or a Defendant within a counterclaim against the Plaintiff) took reasonable steps to mitigate, meaning reduce, losses.  When a person failed to take reasonable steps to mitigate (reduce losses), the law will disallow claims, or the amounts within claims, that arose because of the failure to mitigate whereas the law views the losses that arise from the failure to mitigate as caused by the inaction of the victim rather than by the action of the wrongdoer.  Where failure to mitigate is alleged by the Defendant, it is the Defendant who holds the duty to prove that the Plaintiff failed to mitigate and that a reasonable opportunity to mitigate was available; furthermore, the duty upon the Plaintiff is to take reasonable steps in the effort to mitigate rather than take steps to perfectly mitigate and a Defendant is unable to use the vision of hindsight to argue what the possible opportunities to mitigate were available to the Plaintiff.  Again, the duty is to act reasonably without expectations of perfection.