Costs Following Unsuccessful "Considerable Gamble To Achieve A Significant Award"

Update – July 13, 2015 – the below decision was overturned today by the BC Court of Appeal for several reasons and a new trial was ordered.  In reaching this conclusion the court noted it was improper for the Court to make a present value calculation when considering a formal offer to settle.  The Court provided the following reasons:

[53]         I agree with the appellant that the judge erred in adjusting the initial offer to reflect its 2013 value. This approach is not supported in law. As a result, the amount that the appellant was awarded ($51,300) exceeded the formal offer ($50,000) and the judge had no basis to award costs to the defendants pursuant to Rule 9-1(5)(d).

[54]         The trial judge also erred in applying the incorrect standard to determine which party was successful. The appellant was clearly the successful party in the action, as that standard is described in Loft. Though the appellant was not awarded the entire amount in damages that she sought, she established liability under a cause of action – as in Loft, by way of the defendants’ admitting liability and conceding some damages – and she obtained a remedy. The defendants did not obtain a dismissal of her case, either with respect to liability or damages.

[55]         Thus the order for costs could not have been sustained in any event of the appeal.

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Reasons for judgment were released this week by the BC Supreme Court, Vancouver Registry, addressing costs consequences following a jury trial.
In this week’s case (Han v. Park) the Plaintiff was injured in a 1999 collision that the Defendant admitted fault for.  The litigation had a “somewhat tortured history” finally coming to trial in October 2013.    The Plaintiff sought damages of over $2 million.  Following a 14 day trial a jury assessed damages at $51,300.
In 2002 ICBC tendered a formal settlement offer of $50,000.  When coupled with advances paid the offer slightly exceeded the ultimate jury award.  Given the duration of time that passed the Court was also presented with economic evidence adjusting the offer for inflation indicating it was worth about $61,100 in 2013 dollar terms.  In any event the Court was asked to assess costs consequences flowing from this formal offer.  In finding that costs should be used as a remedy where a litigant takes “a considerable gamble to achieve a significant award” the Court ordered the Plaintiff pay the Defendant’s costs from 2004 onward.  In reaching this conclusion Madam Justice Fitzpatrick provided the following reasons:
[69]         Like the plaintiff in Bailey v. Jang, 2008 BCSC 1372, aff’d 2011 BCCA 146, Ms. Han took a considerable “gamble to achieve a significant award” and lost: paras. 22, 38. Given that the majority of the time at trial was spent on her unsuccessful attempt to persuade the jury of her disability, one can only describe her as being substantially unsuccessful at trial. Accordingly, even without the application of Rule 9-1, Ms. Han would have faced meritorious arguments by the defence that a costs award should reflect that result and my conclusions below are also consistent with an analysis in this context.
[70]         She conducted herself in this litigation so as to ignore the considerable efforts of the defendants to gather evidence regarding the extent of her injuries, all at considerable cost to them. The early efforts of the defendants were geared to either provide a proper basis for a negotiated settlement or to provide the necessary evidence for a trial. All the while Ms. Han entirely failed to muster any medical opinion evidence that she either knew or should have known would be needed to support her claims at the end of the day. She refused to respond to any settlement offer until the eve of the trial.
[71]         Ms. Han’s intractable position must nevertheless be considered in the face of the July 2002 offer to settle. By this time, over three years had gone by and one would have thought that she would be in a position to critically consider her position. The offer fully addressed the position of the defendants that no brain injury had occurred. The premise of the offer was not contradicted by any medical opinion evidence obtained by Ms. Han. Even if she had chosen, strangely, to rely on the medical evidence of the defendants, by no later than May 2004, Dr. O’Shaughnessy had emphatically concluded that no disability or brain injury had resulted from the accident.
[72]         In the above circumstances, Ms. Han’s position was not an “honest but … mistaken view” per Fan, nor did she have a “meritorious, albeit uncertain claim” per A.E.
[73]         The defence calls Ms. Han “delusional” and while the remark is uncharitable, it is not far from the mark. Ms. Han has purposely conducted this protracted litigation where there was no basis in the evidence upon which to conclude other than that she had suffered a relatively straightforward soft tissue injury. Despite that, 14 years of litigation has gone by, no doubt at great cost to the defendants and to those who have financially supported this litigation on behalf of Ms. Han.
[74]         I conclude that Ms. Han is entitled to her taxable costs, including disbursements, of the action to May 2004. The defendants are entitled to their taxable costs, including disbursements, from June 2004 which will include this application to determine costs. Both costs awards will be on Scale B.