"Legitimate Cause for Concern" When Defendant Offer Fails To Include Full Costs and Disbursements

Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, depriving a Defendant of double costs that they otherwise would have been awarded where their formal settlement offers failed to include separate costs and disbursements.
In today’s case (Lanz v. Silver Lady Limousine Services Ltd.) the Plaintiff was involved in two separate collisions and sued for damages.  A jury dismissed both lawsuits.
Prior to trial ICBC provided a formal settlement offer of $50,000 and 50% of costs and disbursements.  This was later withdrawn and replaced with a settlement offer of $70,000 inclusive of costs and disbursements and finally one of $80,000’new money’.  The Plaintiff rejected all of these offers.
The Plaintiff conceded the Defendants were entitled to costs for being on the winning end of the lawsuit but argued no double costs should be awarded as the offers ought not to have reasonably been accepted.  In depriving the Defendant of double costs Madam Justice Sharma expressed concern about the Defendant’s reluctance to include full costs in their offers and noted as follows:

[22]         The defendants first offered $50,000 plus only 50% of costs; their last offer was $80,000 “new money” inclusive of costs and disbursements. In my view, there is a legitimate cause for concern when a defendant’s offer does not include costs and disbursements in a personal injury case where liability and damages are at issue. It could be seen as a tactic discouraging the plaintiff from gathering evidence to substantiate her claim in the first place. Plaintiffs carry the evidentiary burden to prove their case and they are obliged to bring forward expert medical evidence. In this case, the defendant’s offer was made more than a year after the plaintiff’s original offer, when presumably significant costs may already have been incurred with no indication from the defendants that settlement was a possibility.

[23]         In the context of this case, I do not find the defendants’ offers to be ones the plaintiff ought to have accepted because they did not include costs and disbursements as discrete items. I see nothing about this case that justifies penalizing the plaintiff for failing to correctly guess the jury would not accept her claims. I conclude that awarding double costs amount to imposing a heavy penalty on a plaintiff that was forced to endure the unpredictability of a jury trial. I find the day before trial, she had reasonable basis to pursue her case at trial. The defendants’ offers were devoid of discrete recognition of costs and, in my view, that was a disincentive to settle.

[24]         The defendants’ application for double costs is dismissed