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The "Heavy Burden" of BC's Loser Pays System

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14.

I have frequently highlighted BC’s loser pays system where a losing litigant is typically ordered to pay costs to the opposing side.   Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, demonstrating that this result can be harsh and is typically unyielding to factors such as sympathy and financial hardship.
In this week’s case (Laktin v. (Vancouver) City) the Plaintiff was shot three times by police officers rendering him paraplegic.  He sued however his claim was ultimately dismissed following a 5 week jury trial.   Vancouver sought their costs from the Plaintiff who opposed the application arguing financial hardship.  Mr. Justice Pearlman noted the loser pays system does not yield to financial concerns in and of themselves.  In awarding costs the Court noted as follows:
[24]         The plaintiff says that the defendants should be denied their costs on the basis that his life was permanently and catastrophically altered by the event of January 21, 2006 and his future care and financial support are now in jeopardy. Mr. Laktin argues that the costs of a five-week trial will impose an onerous financial burden, which the plaintiff lacks the means to satisfy.  I accept that Mr. Laktin is in difficult financial circumstances, and that an order requiring him to pay costs to the defendant will be a real and heavy burden for him.  While I have a great deal of sympathy for the plaintiff, the case law clearly establishes that the unfortunate personal circumstances and financial hardship of a litigant are not, standing alone, factors warranting a departure from the general rule that costs follow the event: Morris at para. 36; Chen at para. 11;Vesuna v. British Columbia (Transportation), 2011 BCSC 1618 at para. 8.
[25]         In Robinson v. Lakner (1998), 159 D.L.R. (4th) 191, the Court of Appeal, reversing the decision of the trial judge who had limited the costs payable to the successful defendant to $1,500 because the plaintiff was in difficult financial circumstances, held at para. 5, that “financial hardship in itself is not a sound basis for departing from the usual rule with respect to costs”. 
[26]         In Cowherd v. Fraser Valley Health Region et al, 2004 BCSC 698 at para. 5, Madam Justice Ballance cited Brown v. Blacktop Cabs Ltd. (1997), 43 B.C.L.R. (3d) 76 (C.A.); Zelenski Estate v. Fairway(1998), 60 B.C.L.R. (3d) 76 (C.A.); Churchland v. Gore Mutual Insurance Co. (unreported), September 23, 1999, No. S09912, Vancouver (S.C.); and Robinson for the principle that “in general, the unfortunate personal circumstances and characteristics of a litigant are not to be taken into account by the court in exercising its discretion in making an award of costs”.
[27]         In Morris at para. 38, Madam Justice Ker concluded that the court is unable, on any principled basis to take the plaintiff’s financial circumstances into account in determining whether to award costs.
[28]         At para. 39, Her Ladyship cited the following passage from the Reasons for Judgment of Greyell J. in Chen at para. 15:
[39]  To do otherwise would lead to inconsistent and no doubt unreasonable results. As Greyell J. so eloquently noted in Chen at para. 15:
[15] To conclude otherwise would undermine the rationale underlying Rule 14-9 and would likely lead to the promotion of litigation rather than to promote the “winnowing” function described by Hall J.A. in Catalyst Paper. It would lead to a collapse of the general principle discussed in the authorities and result in the unacceptable proposition that costs in each case would be measured not by a party’s success but by the personal financial circumstances of the litigants.
[29]         I conclude that the plaintiff’s difficult personal circumstances and financial hardship, standing alone, do not provide grounds for the Court to depart from the normal rule that costs should follow the event…
[49]         I conclude that there are no special circumstances in this case that would warrant a departure from the general rule that costs should follow the event.
[50]         Accordingly, the defendant, City of Vancouver, will have costs of this action at Scale B, together with its reasonable disbursements.
 

bc injury law, Laktin v. Vancouver (City), Loser pays, Mr. Justice Pearlman, RUle 14, Rule 14-1, Rule 14-1(9)

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