ICBC Law

As previously discussed, the default position when a Plaintiff is awarded less than $25,000 following a Supreme Court trial is that they are not entitled to costs unless they show “sufficient reason” for suing in that forum.  Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, addressing this and stripping a Plaintiff of costs who failed to justify his choice of forum.

In this week’s case (Quartey-Harrison v. Klusiewich) the Plaintiff was injured in a motor vehicle collision and following trial was awarded just over $18,000 in damages plus costs “if no submissions (respecting costs) have been received“.

Following this the Defendant provided written submissions arguing the Plaintiff should be deprived of costs because the claim could have been advanced in Provincial Court.  The Plaintiff did not respond to this submission.  Madam Justice Baker stripped the Plaintiff of his costs finding the onus was on him to justify his choice of forum.  The Court provided the following reasons:

[6] The burden is on the plaintiff to justify his choice of forum.  The court is to consider the circumstances at the time the action was commenced.

[7] In this case, Mr. Quartey-Harrison has made no submissions on costs and has offered no evidence on the issue of “sufficient reason” for bringing the proceeding in the Supreme Court.  In the circumstances, I do not think that I should speculate.

[8] In my view, the evidence at trial made it plain and obvious that no award for past or future loss of income or the capacity to earn income, was warranted, and that the mild whiplash type injury suffered by Mr. Quartey-Harrison was unlikely to result in an award in excess of the $25,000 monetary limit in Small Claims Court.

[9] I have carefully considered the submissions made by the defendants in respect of the defendants’ settlement offer but have concluded that Mr. Quartey-Harrison’s right to recover disbursements should not be nullified by the offer.

[10] In summary, each party shall bear its own costs, but the plaintiff is entitled to recover his disbursements from the defendants.

Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, awarding a Plaintiff damages and costs for modest injuries following a motor vehicle collision.  Although the claim was straight-forward and damages were within the jurisdiction of the Small Claims Court, the Plaintiff was awarded costs with Mr. Justice Burnyeat finding that the Supreme Court’s summary trial process is a reasonable alternative to the backlog litigants face in Small Claims Court.

In today’s case (Parmar v. Lahay) the Plaintiff sustained a modest whiplash injury as a result of motor vehicle collision.  ICBC ran the “Low Velocity Impact” defence arguing no compensation should be awarded.  The trial proceeded summarily and took less than one day.  The Plaintiff’s evidence was accepted and non-pecuniary damages of $12,000 were awarded.

The Court went on to award costs despite the modest quantum.  In doing so Mr. Justice Burnyeat provided the following reasons:

[9] I cannot reach the conclusion that the legal or factual complexity of the case, the need for discovery of documents and examination for discovery, and the need for a judgment enforceable outside of British Columbia are applicable reasons why this action was commenced in the Supreme Court of British Columbia rather than in Provincial Court.  However, I am satisfied that the summary trial procedure available in the Supreme Court and the availability of costs makes the Supreme Court a preferable and justified forum for this Action.

[10] I take judicial notice that this case reached the Court for decision much more quickly than if the Action had been commenced in the Provincial Court.  In this regard, I take judicial notice of the absence of a considerable number of judges at the Provincial Court level and the backlog in hearing matters that the failure to appoint more judges has produced.

[11] I also take into account the ability of the Plaintiff to have costs awarded in this Court but not in Small Claims Court.  In that that regard, I adopt the reasoning of Harvey J. in Zale v. Colwell, 2010 BCSC 1040, where he states:

In each of the above three decisions [Spencer v. Popham, supra; Faedo v. Dowell, 2007 BCSC 1985; and Kanani v. Misiurna, 2008 BCSC 1274] the primary reason for awarding the plaintiff costs, in circumstances not unlike these facing the plaintiff here, was the consideration that given the need to retain counsel to battle an institutional defendant, a reasonable consideration in determining the forum is the matter of indemnity for the costs of counsel.  (at para. 14)

[12] I also adopt the statement of Humphries J. in Kanani, supra:

… in a situation where the defendant put the plaintiff to the proof of having suffered any injury at all, thus making her credibility a crucial issue at trial, it was reasonable for the plaintiff to require the assistance of counsel.  She was therefore justified in commencing the action in Supreme Court where she could hope to recover some of the costs it was necessary for her to expend in retaining counsel to recover the compensation to which she was found to be entitled. This reasoning has application here as well. (at para. 8).

[13] I take into account that it may well be economically unrealistic for counsel to be retained for up to three appearances in Small Claims Court where the damages sought are nominal.  This must be contrasted with the institutional defendant and its unlimited resources.  In an action in Supreme Court, counsel for a plaintiff is only required to appear once in Court if an application pursuant to Rule 9‑7 of the Supreme Court Civil Rules is appropriate.  In the case at bar, the application has taken approximately one hour.

[14] In the circumstances, I am satisfied that the Plaintiff should be entitled to his costs throughout on a Party and Party (Scale B) basis.

Reasons for judgement were released last week by the BC Supreme Court, New Westminster Registry, with the “curious result” of costs recovery at over double the amount of assessed damages.

In last week’s case (Kargbo v. Chand) the Plaintiff was involved in a motor vehicle collision.  ICBC disputed both fault and injury.  At trial the Plaintiff’s claim was accepted and modest damages of $4,000 were awarded.  The Plaintiff sought her costs.  ICBC opposed arguing the Plaintiff did not have sufficient reason to sue in Supreme Court.

Earlier this year the BC Court of Appeal made it clear that more than the value of an ICBC Claim can be considered in deciding whether there is sufficient reason to sue in the Supreme Court.  Mr. Justice Williams went on to canvass factors other than value and concluded that the Plaintiff was entitled to $9,500 in costs under Rule 15-1(15).  The Court provided the following reasons:

[9] The problem ultimately reduces to this: If the Court determines that the plaintiff had sufficient reason for commencing or proceeding in the Supreme Court, she should be entitled to recover costs in accordance with Rule 15-1(15). If the Court finds that there was not sufficient reason for bringing the proceeding in this Court, then she is not entitled to recover her costs.

[10] In Reimann v. Aziz, 2007 BCCA 448, the Court of Appeal clarified that the issue has to be analyzed as at the point in time that the plaintiff initiated the action; there is no ongoing obligation to assess the quantum of claim.

[11] I have been provided with a number of decisions where judges of this Court have assessed the circumstances of cases to decide whether or not an order for costs is warranted. Obviously, the plaintiff bears the onus of establishing that there was sufficient reason for filing in the Supreme Court. It is not simply a matter of assessing the anticipated value of the claim. A number of factors have been identified in the cases as being relevant to the issue. These include the following (the list is not intended to be exhaustive):

1.         the legal or factual complexity of the case;

2.         the need for discovery of documents and examinations for discovery;

3.         the need for a judgment enforceable outside of British Columbia;

4.         a bona fide preference for a jury trial;

5.         access to the summary trial procedure available in Supreme Court; and

6.         the need for the plaintiff to have legal counsel, in light of the defendant’s denial of liability, dispute as to causation, injury or loss and allegations of contributory negligence, pre-existing conditions, previous causes and a failure to mitigate.

[12] In the present case, liability was denied and in the circumstances could reasonably have been expected to represent a challenge to prove. As well, the issue of damages had the real potential of being a problem. The plaintiff had a history of prior accidents and had been hospitalized shortly after the accident in question for matters not related to the accident. She was also injured in another more serious accident some several months after the accident at bar. It was the sort of case that a self-represented plaintiff would find daunting no doubt.

[13] Taking those considerations into account, it is my view that this plaintiff had sufficient reason for bringing her proceeding in the Supreme Court.

[14] As a parenthetical observation, it is true that a party such as this plaintiff could elect to pursue the claim in the Provincial Court with legal counsel, although the prospect of incurring the expense to do so without any right to recover court costs is a legitimate factor to consider. As well, where the plaintiff elects to bring suit in the Supreme Court, she runs the real risk of an adverse costs outcome if the action is unsuccessful.

[15] In the circumstances, it is my view that the plaintiff should be entitled to costs in accordance with the Rules of Court. I recognize that might appear to produce a curious result in that the award of costs is substantially greater than the damages that she recovered. However, if the matter is considered fairly and objectively and the relevant rule applied, that result follows.

[16] There is no question that the policy which underpins Rule 14-1(1) is to encourage parties with claims of modest value to bring their action in the Provincial Court, and to provide for a penalty against one who does not. That is consistent with the concept of proportionality which is a foundational consideration of the Court’s Rules.

[17] The clear default position will be that, with respect to claims where the award is less than $25,000, the plaintiff will not be entitled to an award of costs. Nevertheless, there will be situations where there is sufficient reason to bring the action in the Supreme Court. It will be for the Court to examine the circumstances of each particular case to determine whether or not there is sufficient reason.

For more cases addressing sufficient reasons to sue in Supreme Court you can click here to access my archived posts on this topic.

As previously discussed, a litigant who receives less than $25,000 in damages following a Supreme Court trial is dis-entitled to costs unless they have ’sufficient reason’ to sue in the Supreme Court.  Reasons for judgement were released today canvassing this area of law.

In today’s case (Mehta v. Douglas) the Plaintiff was injured in a motor vehicle collision.  He sued and following trial was awarded just over $18,000 in damages.  ICBC argued the Plaintiff should not be awarded costs because he did not have sufficient reason to sue in the Supreme Court.  Mr. Justice Harris disagreed and found that access to examinations for discovery and summary trials were were sufficient for commencing the lawsuit in the Supreme Court.  In awarding the Plaintiff costs the Court provided the following reasons:

[9] I accept the submissions of the plaintiff. In my view, the plaintiff required counsel to present her case. It would be unjust to deny her costs that would permit her partially to defray the expense of retaining counsel. Although it would have been difficult to predict at the outset whether this matter would prove to be suitable for summary determination, the availability of examinations for discovery and the possibility of summary trial are both factors that in the circumstances of this case are sufficient to justify starting the action in this court. The availability of these procedures and their potential to promote a proportionate and efficient use of resources is something that would be known at the outset. In my view, it would be unjust to deprive the plaintiff of costs in circumstances where knowing of those procedures she has subsequently used them efficiently.

[10] Although the plaintiff did not initially plead the injuries that ultimately formed the primary basis of the summary trial, I accept that it is appropriate to be cautious in assessing what could reasonably be predicted as the quantum for a damages claim when the action is started, particularly in the case of an infant. While on the facts that were known concerning the minor nature of the plaintiff’s soft tissue injuries and the speed with which they had resolved, it would have been unlikely that the award would exceed the small claims jurisdiction, but the exact value of the claim nevertheless could not be predicted accurately. Given the uncertainties facing the plaintiff at the time she started the action, it was not unreasonable to start it in this court.

[11] Taking all of these factors into account, I am of the view that the plaintiff had sufficient reason to start this action in this court and accordingly she is entitled to her costs in accordance with Schedule B.

How can a Plaintiff who is awarded damages following a personal injury trial end up owing ICBC money?  The answer relates to the costs consequences that can be triggered by formal settlement offers.  I’ve discussed this topic previously and two sets of reasons for judgement were released this week by the BC Supreme Court further demonstrating this reality.

In the first case (Dempsey v. Oh) the Plaintiff was injured in a bicycle accident when he was struck by the Defendant’s vehicle.  In the course of the lawsuit ICBC made a formal settlement offer of $40,000.  As trial neared ICBC increased their formal offer to $165,000.  The Plaintiff rejected this and proceeded to trial.  At trial the Court made some critical findings relating to the Plaintiff’s credibility and awarded damages of just over $20,000.

Following trial ICBC asked for an order pursuant to Rule 9-1(5) that the Plaintiff pay all of the Defendant’s costs following their first formal offer.  The Plaintiff objected to such a result arguing that “if he is ordered to pay the defendant’s costs he will end up owing it money“.  Mr. Justice Myers rejected this argument and ordered that the Plaintiff pay the Defendant’s post offer costs.  In rejecting the Plaintiff’s submission the Court made the following comment “It is not the court’s function to ensure that a plaintiff makes a net recovery from an action when it has ignored a reasonable offer.  That would defeat the purpose of the Rule and does not accord with common sense”.

On another note, this case is worth reviewing in full for the Court’s discussion of Rule 14-1(10).  The Defendant argued that the Plaintiff should be deprived of his pre-offer costs as there was no sufficient reason to sue in Supreme Court.   Mr. Justice Myers rejected this argument finding that when the lawsuit was started the Supreme Court was an appropriate venue.  In making this finding the Court provided the following useful reasons:

[11]    In part due to the loss of income, this was a more complicated case than Ghelen.  This action was commenced approximately six months after the accident.  At that point I find it was reasonable for the plaintiff to have commenced the action in this Court because he was reasonably entitled to see the impact of the accident on his prior condition.  There is nothing in the rules which imposes a cost penalty on a party who files its suit quickly after its cause of action arises.  And, in Reimann v. Aziz, 2007 BCCA 448, the Court of Appeal held that there is no ongoing obligation on a party to assess his action as it progresses in the Supreme Court in order to consider whether it should be moved to Provincial Court.

In the second case released this week (Miller v. Boughton) the Plaintiff was injured in a 2006 collision.  She sued for damages and her case went before a jury.  The trial lasted 7 days.  Prior to trial ICBC made a series of escalating formal settlement offers starting at $22,000 with the final offer made shortly before trial topping out at $62,500.

The Plaintiff rejected these offers and proceeded to trial.  The Jury found the Plaintiff 45% at fault for the crash and the Defendant 55% at fault.   After taking this split into account the Jury’s award was a modest $3,880.  ICBC’s motion for post offer costs and disbursements was granted.  After factoring these in the Plaintiff likely ended up owing ICBC a significant amount of money.   (UPDATE September 12, 2011 - click here for follow up reasons confirming the Defendant’s costs were assessed at over $42,000)

Cases such as these illustrate the important lesson that formal offers create a “loser pays” system which could result in significant costs swings following trial.  When considering ICBC formal settlement offers it is important to keep this in mind when deciding whether to accept the offer or proceed to trial.

Earlier this year the BC Court of Appeal released important reasons finding that more than value of a claim can be considered in deciding whether a Plaintiff has sufficient reason to sue in the Supreme Court when considering costs under Rule 14-1(10).   Useful reasons for judgement were released last month  by the BC Supreme Court, Vancouver Registry, further addressing this issue in the context of an ICBC Injury Claim.

In last month’s case (Taylor v. Kassa) the Plaintiff was injured in BC motor vehicle collision.  His injuries were modest and it was “readily apparent from the outset that the quantum of damages would fall within the jurisdiction of the Small Claims Court“.  Despite this he sued for damages in the Supreme Court under the fast track rule.

After examinations for discovery a damages settlement was reached for $15,000.  The parties agreed to ask the Court to address the issue of whether costs should be payable.  Mr. Justice Davies found that given ICBC’s boilerplate response to the lawsuit it was reasonable for the Plaintiff to pursue the claim in Supreme Court with the assistance of counsel therefore entitling the Plaintiff to costs.  In reaching this decision the Court provided the following reasons:

[7] ….I make that ruling because I find it to be significant that this matter did not settle until there had been examinations for discovery.

[8]  The defendants availed themselves of the discovery procedure and then revised their assessment of the case.  Prior to discoveries, there had been a complete denial of liability and causation including allegations of pre-existing injury and failure to mitigate, all of which matters had rendered the case somewhat complex.

[9]  As Justice Punnett said in Spencer at para. 23 and 24

[23] Arguably, at the time the action was started, the claim could have exceeded $25,000. The plaintiff knew her injuries, from which it took her 18 months to substantially recover, caused her pain at work, disturbed her sleep, made her unable to do housework, and decreased her leisure activities. She had missed seven days of work and required numerous visits to a chiropractor and massage therapist. There is no evidence that the plaintiff misled counsel or that her complaints lacked credibility.

[24] Further, even if it was clear that the claim would fall within the Small Claims Court’s jurisdiction, the issues raised by the defendant increased the complexity of the claim and the plaintiff’s need for counsel. By denying liability, causation and that the plaintiff suffered any loss, the plaintiff would have been required to prove these elements at trial. Also, although unnecessary because the matter settled, discovery of the defendant, which had been arranged, could have been important to the plaintiff’s case.

[10]  I am satisfied that this case falls within that same exeption expressed in para. 24 and supports a finding of sufficient reason to commence the action in this case in this Court.

[11]  Discovery was not available in the Provincial Court and led to the settlement of this case.

[12]  There will be an order that the plaintiff recover his costs under the provisions of the fast-track litigation project.

The Taylor decision is unpublished but, as always, I’m happy to provide a copy to anyone who contacts me and requests a copy.

Earlier this year the BC Court of Appeal provided much needed clarity to the factors Courts can consider when deciding whether a Plaintiff has sufficient reasons to sue in the Supreme Court when considering costs consequences following trial.   Reasons for judgement were released today by the BC Court of Appeal further addressing this topic finding that while the Court can consider other issues, the value of the claim will be one of the most important factors.

In today’s case (Gehlen v. Rana) the Plaintiff was injured when she was a passenger involved in a rear-end car crash.  The Defendant admitted fault for the crash but denied liability to the Plaintiff claiming that the Plaintiff “was not present in the vehicle at the time of the accident“.  The Defendant made a formal offer to settle the Plaintiff’s claim for $22,000 plus disbursements.  The Plaintiff rejected this offer and went to trial.  After trial the Jury awarded the Plaintiff total damages of just over $13,000.

Despite this result the trial judge awarded the Plaintiff costs and found the Plaintiff has sufficient reason to sue in the Supreme Court.  The BC Court of Appeal found this was in error and in doing so provided these reasons addressing the issue of “sufficient reason” to sue in the BC Supreme Court in a personal injury claim:

[35] In Gradek, the Court interpreted the meaning of “sufficient reason” in Rule 57(10).  The Court acknowledged that the procedures available in the Small Claims Court will, in most cases, “enable the parties to proceed in a cost-efficient manner to a just result” (para. 18).

[36] The Court ultimately concluded that “sufficient reason” was not intended by the Legislature to be limited to the quantum as assessed at the outset of the claim.  However, the Court stated, at paras. 16 and 20:

[16]      The words “sufficient reason” are not defined in the Rules of Court.  In their ordinary and grammatical sense, they do not suggest a specific limitation in terms of application, although it is clear that “any reason” will not do.  The reason has to be “sufficient”, but there is nothing in the Rule to suggest that it has to be connected solely to the quantum of the claim.  On the other hand, the words do not connote the exercise of a discretion, with its attendant deferential standard of review.  That point was made by this Court in Reimann v. Aziz, 2007 BCCA 448, 72 B.C.L.R. (4th) 1, at para. 13:  …

…

[20]      I accept that the narrow interpretation of the words “sufficient reason” advocated by the appellant would provide greater certainty to litigants in knowing the consequences of proceeding in Supreme Court where the matter falls within the Small Claims monetary limit.  But I agree with the trial judge that if the Legislature had intended to limit the scope of the words “sufficient reason” to the extent suggested by the appellant, it could readily have done so.  While I am satisfied that the words, “sufficient reason” should not be interpreted in an expansive manner, but with restraint, I am also satisfied that they must be read in such a way that a trial judge is not forced to deny a party costs where he is satisfied, as here, that justice can only be achieved as between the parties by an award of costs to the successful party.

[37] As I understand the import of Gradek, it is that likely quantum, while perhaps the most important factor for determination of sufficient reason, is not the only factor that may be taken into account.  The Court in Gradek also accepted that there may be other circumstances that justify bringing an action in the Supreme Court despite the fact that the likely quantum will not exceed the Small Claims amount.  Thus, in Gradek the Court accepted the trial judge’s finding that Mr. Gradek, due to language difficulties, required the assistance of counsel and it would be unjust to require him to bring his claim in the Small Claims Court where he would be denied costs that would partially offset the expense of retaining counsel (para. 18).  However, it is clear from Gradekthat the burden is on the plaintiff to establish eligible circumstances that are persuasive and compelling to justify “sufficient reason”.

[38] In the case at bar, the plaintiff reiterated before us the 12 reasons submitted to the trial judge to establish sufficient reason to commence the action in the Supreme Court.  However, eight of those reasons were circumstances that arose after the commencement of the action and were thus irrelevant to the analysis (the defendant’s offer to settle; the defendant’s failure to apply to move the action to the Small Claims Court; the defendant’s denial of liability for the plaintiff’s injury; the insurer’s characterization of the collision as low impact; the exchange of 60 documents; the defendant’s motion for a Rule 66 hearing and eventual removal; a Rule 28 examination of a witness; and the absence of expert evidence tendered by the defendant).

[39] The strongest reason for bringing the action in the Supreme Court related to the plaintiff’s alleged injuries, but that must be closely examined in light of her pre-existing condition.  While minor impacts do not necessarily preclude serious injuries, it must have been apparent to the plaintiff that after this minor collision her pre-existing condition was only modestly aggravated and would not attract a significant award of damages.

[40] In my opinion, the plaintiff has not identified a compelling circumstance that meets the sufficient reason test in Rule 57(10) as interpreted by Gradek.

[41] In my view, this was a case where it was plain and obvious at all material times that this was a proper action to be tried in the Small Claims Court.

Interesting reasons for judgement were released this week by the BC Supreme Court, New Westminster Registry, discussing the ‘flexibility‘ that the New Rules of Court give Judges in making costs awards following trials where formal settlement offers were made.

In today’s case (Cairns v. Gill) the Plaintiff brought an ‘exaggerated’ personal injury claim to trial following a 2005 motor vehicle collision.  ICBC made an early formal settlement offer in 2006.   ICBC’s offer was modest at just over $1,200 plus costs.   The Plaintiff rejected the offer and proceeded to trial.   The trial did not go well and the Jury largely rejected the Plaintiff’s claim awarding just over $850 in total damages.

Having beaten their formal offer ICBC applied for an order that the Plaintiff pay their post offer Bill of Costs which was expected to exceed $16,000.  Despited the ‘exaggerated’ nature of the claim Madam Justice Arnold-Bailey found that such a result was unjust.  The Court stripped the Plaintiff of her post offer costs and disbursements however did not award ICBC their costs.  In reaching this result the Court provided the following reasons demonstrating the flexible (but perhaps somewhat unpredictable) nature of the current Civil Rules:

[57] The defendants seek costs and disbursements following the date of the offer to settle, despite the plaintiff obtaining judgment.  This is available pursuant to Rule 9-1(5)(d)…

[59] To make such an order would have a very negative effect on the plaintiff, and have the broader effect of further discouraging those with legitimate claims from bringing their actions in this Court when the defendant, funded by an insurer, has deeper pockets with which to bear the risk of a plaintiff achieving only a minor or, indeed, a pyrrhic victory.

[60] It is clear from the rules and the jurisprudence that costs consequences are to guide counsel in litigation decisions.  The object of the Rules is, “to secure the just, speedy and inexpensive determination of every proceeding on its merits.”  This object is to be conducted, as far as is practicable, with regard to proportionality.  While this object is frustrated to some extent by a claim worth $851 proceeding to its conclusion at a Supreme Court jury trial where it was more appropriate for determination in Provincial Court, the object and proportionality principle do not appear to accord with the potential cost of litigation in this case.  The bill of costs of the defendants is expected to exceed $16,000.

[61] I note that the Court of Appeal in Giles recognized when dealing with the issue of double costs that “all litigation comes with a degree of risk,” and that, “when faced with settlement offers, plaintiffs must carefully consider their positions.”  However, the court also indicated that plaintiffs, “should not to be cowed into accepting an unreasonable offer out of fear of being penalized with double costs if they are unable to ‘beat’ that offer.”  These considerations also appear relevant in these circumstances.

[62] In this case, pursuing a valid, although exaggerated, personal injury claim to trial, where the offer to settle did not provide a genuine incentive to settle in the circumstances, may, in the face of a defence funded by ICBC, cost the plaintiff almost twenty times what was awarded at trial.  It seems consistent with the object of the Rules generally, and of Rules 9-1 and 14-1(10), to have regard to the need to emphasize litigation decisions that direct cases to the appropriate forum without disproportionately penalizing a party that had some success, however limited.

[63] To this end, as considered in relation to the first issue, Rule 14-1(10) permits the Court to limit a plaintiff to the recovery of disbursements when the amount of the judgment is within the jurisdiction of the Provincial Court, which I declined to do in this case.  Then, as considered in relation to the second issue, Rule 9-1(5)(a) permits the Court to deprive the plaintiff of any or all of their disbursements after the date of the offer, which I found to be appropriate.  Then, taking the matter even further, Rule 9-1(5)(d) permits the Court to consider requiring the plaintiff to pay the defendants’ costs in respect of some or all of the steps taken after the date of the offer to settle.

[64] This progression demonstrates the flexibility within the overall framework of the rules to craft an order for costs that is appropriate to the circumstances of each case.

[65] In the present case, the plaintiff, although the “successful” party at trial, agreed to forego her costs after the date of service of the offer to settle and is, by virtue of my decision on the second issue, without disbursements from the date of service of the offer to settle, which occurred very early in the proceedings.  To require her to pay all or some of the defendants’ costs after the date of service of the offer to settle, which at the time was an unreasonably low offer, would be excessive and unjust.  It would not be in keeping with the nature of the offer, the relative financial circumstances of the parties, the principle of proportionality, and the need to avoid decisions that inappropriately discourage plaintiffs from pursuing valid claims.

This case is worth reviewing in full for the Court’s length analysis of many authorities to date addressing costs discretion under the new Rules of Court and further addressing important issues such as sufficient reason to sue in Supreme Court, and the relevance of suing an insured defendant.

Welcome reasons for judgement were released today by the BC Court of Appeal addressing when a Plaintiff has ‘sufficient reason‘ for suing in the BC Supreme Court.  In short the top BC Court ruled that trial judges can look beyond the value of a claim when addressing this topic.  This issue is important because generally a Plaintiff who succeeds in a Supreme Court lawsuit but is awarded below $25,000 (the current monetary jurisdiction of the BC Provincial Court) will be deprived of costs unless they have ‘sufficient reason‘ for suing in the Supreme Court.

In today’s case (Gradek v. DaimlerChryster Financial) the Plaintiff was injured in a 2006 collision.  His lawsuit was successful and he was awarded damages of just over $9,000.  The trial judge also awarded costs of $6,600.  In doing so the trial judge made the following useful findings when individuals sue an insured defendant:

[42]      The plaintiff is who he is.  As such, he would have had extraordinary difficulty presenting a case on his own.  While the defendant, represented by the insurer, suggested that in Provincial Court it might, at times, be represented by an adjuster, in my view, whether the defendant was represented by an adjuster or a lawyer the plaintiff would have been outmatched.

[43]      In my opinion the plaintiff required counsel to obtain a just result. Costs are not awarded in Provincial Court.  [Emphasis added.]

ICBC Appealed this order arguing that a court can only look at the likely value of a claim when deciding whether there is sufficient reason to sue in the BC Supreme Court.  The Court of Appeal disagreed and dismissed the appeal.  In doing so the Court provided the following useful reasons addressing the scope of ‘sufficient reasons‘ under Rule 14-1(10) of the Civil Rules:

[16]        The words “sufficient reason” are not defined in the Rules of Court.  In their ordinary and grammatical sense, they do not suggest a specific limitation in terms of application, although it is clear that “any reason” will not do.  The reason has to be “sufficient”, but there is nothing in the Rule to suggest that it has to be connected solely to the quantum of the claim.  On the other hand, the words do not connote the exercise of a discretion, with its attendant deferential standard of review.  That point was made by this Court in Reimann v. Aziz, 2007 BCCA 448, 72 B.C.L.R. (4th) 1, at para. 13:

[13]      At the outset, I observe that the application of Rule 57(10) does not involve an exercise of discretion.  For a plaintiff who recovers a sum within the jurisdiction of the Small Claims Court to recover more than disbursements, the court must make a finding that there was sufficient reason for bringing the action in the Supreme Court.

[17]        In support of its position, the appellant relies on the nature and purpose of the legislative scheme which, he submits, reflect an intention on the part of the Legislature to confine the meaning of the words “sufficient reason” to reasons relating only to quantum as assessed at the outset of the claim.  In that respect, it is common ground that the primary purpose of denying costs in the Supreme Court to those with monetary claims of $25,000 or less is to encourage claimants to bring their claims in Small Claims Court, with its simplified procedures and greater accessibility to judicial dispute resolution.  Litigating in the Supreme Court when the amount of money involved is relatively small can be prohibitive for both the “winner” and the “loser”.

[18]        I am in general agreement with the appellant’s submission in its factum (at para. 33) that the object of the small claims procedures set out in the Small Claims Act, R.S.B.C. 1996, c. 430 and Rules, B.C. Reg. 261/93 is “to provide parties, and lay litigants, in particular with an easily understandable, flexible, and less costly alternative to the Supreme Court”.  I am also prepared to accept that, in most cases, the pre-trial procedures, including pre-trial disclosure of documents and expert reports, mediation services, settlement conferences and recovery of such reasonable expenses as interpreter fees, provided in the Provincial Court, will enable the parties to proceed in a cost-efficient manner to a just result.  But, that will not always be the case.  In this instance, for example, the trial judge was satisfied that Mr. Gradek’s circumstances required the assistance of counsel to obtain a just resolution of his claim.  It is implicit in his reasons that he considered that it would be unjust to find that Mr. Gradek require counsel to properly present his claim, on the one hand, and to deny him costs which would partially offset the expense of retaining counsel, on the other.  It was on this basis, in part, that he found there was “sufficient reason” within the meaning of Rule 57(10) to bring the action in the Supreme Court with its attendant relief for the successful party in costs.

[19]        Without endorsing all of the factors relied on by the trial judge as constituting “sufficient reason” in this case, I am satisfied that there may be circumstances which may constitute sufficient reason for bringing an action in the Supreme Court, thereby triggering its costs provisions, despite the fact that it is apparent from the outset that the award will fall within the monetary jurisdiction of the Provincial Court.  It is open to a defendant who believes that the claim should not have been brought in the Supreme Court to apply under s. 15 of the Supreme Court Act, R.S.B.C. 1996, c. 443, to have the matter transferred to the Provincial Court.  Alternatively, if the matter proceeds in the Supreme Court, it is open to the defendant to ask that a successful plaintiff be denied costs on the basis that there was not sufficient reason to bring the action in the Supreme Court in the first instance.

[20]        I accept that the narrow interpretation of the words “sufficient reason” advocated by the appellant would provide greater certainty to litigants in knowing the consequences of proceeding in Supreme Court where the matter falls within the Small Claims monetary limit.  But I agree with the trial judge that if the Legislature had intended to limit the scope of the words “sufficient reason” to the extent suggested by the appellant, it could readily have done so.  While I am satisfied that the words, “sufficient reason” should not be interpreted in an expansive manner, but with restraint, I am also satisfied that they must be read in such a way that a trial judge is not forced to deny a party costs where he is satisfied, as here, that justice can only be achieved as between the parties by an award of costs to the successful party.

As previously discussed, if a Plaintiff successfully sues in the BC Supreme Court and is awarded damages under $25,000 (the current monetary limit of the BC Small Claims Court) the Plaintiff will not be entitled to costs unless they had ‘sufficient reason‘ for suing in Supreme Court.  Useful reasons for judgement were released today by the BCSC, New Westminster Registry, addressing this issue after a Part 7 Benefits trial.

In today’s case (Derbyshire v. ICBC) the Plaintiff was injured in a motor vehicle collision.   She was employed as a commercial painter and as a result of the crash became disabled from her own occupation.  She was insured with ICBC who provided one week of disability benefits and then refused to reinstate these.

The Plaintiff’s treating GP and a rheumatologist supported the fact that the Plaintiff was disabled.  ICBC obtained an ‘independent medical examination report‘ from an orthopaedic surgeon who concluded that the Plaintiff “should have been able to have resumed her previous level of activity” within 8 weeks of the crash.

The Plaintiff sued in the Supreme Court and ultimately was successful with Mr. Justice Saunders finding that ICBC was wrong in cutting off the Plaintiff’s rehabiliaiton and disability benefits.  The total value of the Plaintiff’s claim by the time of trial was well below $25,000 however the Court went on to award costs finding that Plaintiffs suing for on-going benefits under Part 7 have sufficient reason to sue in the Suprene Court.   Mr. Justice Saunders provided the following reasons:

I accept what Mr. Cabanos says regarding the apparent, at this point, potentially limited monetary value of the claim being within the jurisdiction of the Provincial Court, but Mr. Milne is quite correct that the test for costs is whether it was appropriate to bring this action and this application in Supreme Court.  In my view, it was appropriate given the indeterminate size of the total benefits that could be granted to the claimant over the entire course of her disability and it was further appropriate with respect to the summary disposition mechanisms that are available in this court, the alternative in Provincial Court only being a full trial.