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Formal Offer Bested by $920 Fails To Trigger Double Costs

Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, addressing if double costs should be awarded where a formal settlement offer was bested by a modest basis.

In today’s case (Saopaseuth v. Phavongkham) the Plaintiff was injured in a 2011 collision.  Prior to trial the Plaintiff provided a formal settlement offer of $44,000.  At trial this amount was exceeded by $920.  In declining to award post offer double costs Mr. Justice Bernard provided the following reasons:

[72]         I am not satisfied that the plaintiff’s formal offer was one that the defendant ought reasonably to have accepted. The offer was not broken down into its constituent elements and it was, therefore, difficult to evaluate. The plaintiff’s claim was under five heads of damage; therefore, a breakdown would have greatly assisted the defendant in evaluating the offer. Also, as in Barnes, the defendant had a legitimate defence to the plaintiff’s claim; indeed, the plaintiff sought $45,656 for loss of future earning capacity at trial and was ultimately awarded nothing under this head of damage.

[73]         As to whether the plaintiff’s formal offer provided the defendant with a genuine incentive to settle or not, the offer was for $44,000 and the plaintiff ultimately sought $120,596 at trial. The latter amount had not been set out in the pleadings and was not quantified until the start of the trial. There was, therefore, an insufficient basis for the defendant to evaluate whether the $44,000 offer was a genuine compromise or not.

[74]         The ultimate award was $44,920. Rule 9-1(6)(b) permits the court to compare the offer to settle with the final judgment. Here, the award was greater than the offer by only $920, or approximately 2%. This marginal difference suggests that little weight should be given to this factor.

[75]         As already observed, the defendant had legitimate defences to the claim and the damages for non-pecuniary damages were significantly reduced by new information that was elicited from the plaintiff’s expert witness in his trial testimony. The plaintiff also recovered nothing for his claim of lost earning capacity. It is noteworthy that there was competing expert evidence that made quantifying damages difficult. I am satisfied that in view of these matters an award of double costs would unduly punish the defendant for mounting a meritorious defence.

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