BC Supreme Court Confrims Strict Adherence Necessary to Trigger Rule 37B

Reasons for judgement were released this week by the BC Supreme Court confirming that strict adherence to the requirements of Rule 37B are necessary for a pre-trial settlement offer to trigger costs consequences. In this week’s case (Wormell v. Hagen) the Third Party to the lawsuit made a pre trial offer stating “the Third Party offers to settle the Defendant’s claim(s) for any contribution or relief from the Third Party in this proceeding on the following terms: Dismissal of the Third Party Notice; and costs in accordance with Rule 37(22) and (37)”

After trial the Defendant’s claims against the third party were dismissed.  The Third Party brought an application for double costs under Rule 37B as they beat their pre-trial settlement offer.  Mr. Justice Goepel refused to order double costs holding that the pre-trial settlement offer did not comply with the strict requirements of Rule 37B thereby giving the Court no authority under the Rule.

Mr. Justice Goepel reasoned as follows:

[5] Rule 37 was repealed by B.C. Reg. 130/2008, effective July 1, 2008.  At that time Rule 37 was replaced by Rule 37(b) which provides that:

37B(1) In this rule, “offer to settle” means

(a)      an offer to settle made and delivered before July 2, 2008 under Rule 37, as that rule read on the date of the offer to settle, and in relation to which no order was made under that rule,

(b)      an offer of settlement made and delivered before July 2, 2008 under Rule 37A, as that rule read on the date of the offer of settlement, and in relation to which no order was made under that rule, or

(c)      an offer to settle, made after July 1, 2008, that

(i)         is made in writing by a party to a proceeding,

(ii)        has been delivered to all parties of record, and

(iii)       contains that following sentence: “The … [name of the party making the offer]… reserves the right to bring this offer to the attention of the court for consideration in relation to costs after the court has rendered judgment on all other issues in this proceeding.” [B.C. Reg. 130/2008, s. 1]

[6] The offer served by Mr. Moses on the defendant does not contain the wording required in Rule 37B(1)(c)(iii)…

[7] In Lau v. Rai, 2009 BCSC 696, Powers J. considered the effect of a non-compliant offer and held that a non-compliant offer did not constitute an “offer to settle” as defined under Rule 37B.

[8] I agree with Powers J.’s conclusion.  “Offer to settle” is a defined term.  A proposal concerning costs made subsequent to July 1, 2008 that does not comply with the provisions of Rule 37B(1)(c) is not an “offer to settle” as defined in the Rules and does not trigger the cost options set out in Rule 37B(5).

[9] In the result, therefore, the third party’s application for double costs is dismissed.  I confirm the cost order set out in para. 144 of my initial reasons.  The defendant is entitled to the cost of this application to be set off against the costs otherwise awarded to the third parties.  As the third parties were both represented by the same counsel at trial and took the same positions with respect to defending the third party claim the third parties are collectively only entitled to one set of costs:  Malik v. State Petroleum Corp., 2009 BCSC 115.

costs consequences and rule 37b, formal settlement offers, icbc claims and settlement offers, Mr. Justice Goepel, pre-trial settlement, Rule 37B, wormell v. hagen

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ERIK
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When not writing the BC Injury Law Blog, Erik is the managing partner at MacIsaac & Company, based in Victoria, B.C. He is also involved with combative sports regulatory issues and authors the Combat Sports Law Blog.

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