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Full Rule 15 Costs Apply Where”Significant Preparation For Trial” Undertaken – TAF is Recoverable Disbrursement

Reasons for judgement were released last week by the BC Supreme Court, Nanaimo Registry addressing two important topics; the assessment of costs for fast track actions when they settle before trial and the recoverability of Trust Administration Fees as a disbursement.

In last week’s case (Christen v. McKenzie) the Plaintiff settled his ICBC claim after litigation was well underway for specified damages plus “costs payable“.  The parties couldn’t agree on these with the Plaintiff seeking full Rule 15 costs and ICBC arguing that a lesser amount should be paid because “a number of pre-trial steps involving a substantial amount of work were still required to be performed as the case settled seven -and-a-half months prior to the commencement of trial“.  Madam Justice Arnold-Bailey awarded the full cap noting that while the trial was a ways off significant trial preparation steps were undertaken and this was sufficient to trigger the Rule 15 cap. The Court provided the following reasons:

[35]         To my mind significant preparation for trial ought to be sufficient to entitle the successful party to costs for pre-trial preparation to the full amount of the cap, presently $6,500 pursuant to Rule 15-1(15). Pre-trial preparation may take various forms given the demands of the particular action. Whether the parties engage in extensive negotiations or mediation and thus achieve a settlement months or days before trial, the preparation by counsel may easily approach that required to actually conduct the trial. The focus ought to be on the amount of useful preparatory work done and not where in the pre-trial timeline the resolution was reached. Indeed, the focus of Rule 15-1 and the Civil Rules generally is to encourage early and fulsome preparation to resolve cases earlier as opposed to later if possible; and also to limit the scope of the proposed trial to what is truly at issue, thus reducing the time and costs associated with resolving the dispute.

[36]         In the present case it is clear that the matter was substantially prepared to the level necessary to achieve a significant settlement prior to trial. While there may be fast track cases where a review of the costs amount claimed for preparation is warranted, this is not one. However one dissects and analyzes what was done or not done to prepare this case for trial, a considerable amount of preparation was performed by plaintiff’s counsel to achieve the sizable settlement. Extensive and protracted negotiations, such as occurred here, ought not to be regarded as requiring significantly less preparation than preparing a case for mediation or trial. Indeed, such negotiations are to be encouraged as the most cost‑effective way of dealing with cases that would otherwise proceed to trial. The efficacy of conducting a fast track action ought not to be undermined by a costs analysis that bogs down in the picayune.

The Court also noted that a Trust Administration fee is a fair disbursement a successful litigant can claim. Madam Justice Arnold-Bailey provided the following comments addressing this:

37]         I note that the plaintiff’s claim for the trust administration fee of $10 plus $1.20 in taxes is not now disputed by the defendant McKenzie and the third party. The following authorities support it being claimed:Parrotta v. Bodnar, 2006 BCSC 787 at para. 25; Polubinski v. Twardowski, 2007 BCSC 843; and McCreight v. Currie, 2008 BCSC 1751. Therefore the plaintiff’s claim for $11.20 in relation to the trust administration fee (including tax) is successful.

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