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"Genuine Sympathy" Not Enough to Move Away From Loser Pays Consequences

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


As previously discussed, a Plaintiff’s financial circumstances is not relevant when assessing “loser pays” costs consequences following trial in the BC Supreme Court (subject to the different analysis that applies when pre-trial formal settlement offers have been made).  Reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, demonstrating this.
In last week’s case (Staley v. Squirrel Systems of Canada Ltd.) the Plaintiff sued the Defendant for damages due to alleged wrongful dismissal.  The claim was dismissed at trial.  The Defendant applied for costs to be paid with the Plaintiff opposing arguing, in part, that his poor financial circumstances should preclude such a result.  Mr. Justice Williams disagreed and ordered that the Plaintiff pay the Defendant’s costs.  In doing so the Court provided the following reasons:
[17] Regrettably, I find myself unable to accede to the plaintiff’s submissions. The Rule with respect to costs is quite fundamental. While there is some latitude for judicial discretion, the authorities make abundantly clear that the discretion must be exercised in a principled and, I would conclude, cautious manner. Deviation from the basic principle that a successful litigant shall recover must necessarily be carefully constrained…

[21] The third basis for his application is that he is unemployed and experiencing difficult financial circumstances.

[22] While no evidence is before the Court to establish precisely what his present situation is, I will accept that it is not good. I have genuine sympathy for this plaintiff. I am sure that the requirement to pay costs to the defendant will be a real burden for him in his circumstances.

[23] Indeed, I expect that it is frequently the case that there are substantial discrepancies between the means of parties to litigation. Unsuccessful litigants are not infrequently in difficult financial straits, and orders for costs can exacerbate that situation.

[24] However, I am unable to conclude that an order requiring him to pay the defendant’s costs, in accordance with the relevant tariff, $11,000, would be so “unfair and inappropriately punitive” to make the order sought. There are no special circumstances in this case which warrant an order for reduced costs or relieving the plaintiff from paying the defendant’s costs.

Defendant's Insured Status Shields Plaintiff From Hefty Costs Consequences

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 7, BCSC Civil Rule 9, Uncategorized.


As previously discussed, when a Plaintiff fails to beat a Defendant’s formal settlement offer at trial they can be exposed to significant costs consequences.  One factor that Courts can consider when using their discretion is the financial status of the parties including whether the Defendant is insured.  Reasons for judgement were released this week by the BC Supreme Court, New Westminster Registry, using this factor in shielding a Plaintiff from potentially hefty costs consequences.
In this week’s case (Cunningham v. Bloomfield) the Plaintiff was injured in a collision.  She sued for damages and the claim proceeded to jury trial.  Prior to trial the Defendant provided a formal settlement offer of $12,500.  The jury awarded $5,000 in total damages triggering a Defence application for payment of post offer costs.  Mr. Justice Crawford rejected the application finding stripping the Plaintiff of all her costs was a more appropriate result.  In addressing the financial position of the parties the Court provided the following reasons:

[15] The award of the jury was low. But as noted in Cairns at para. 50, the unpredictability of a jury is a relevant consideration.

[16] It is said that the plaintiff is not lacking in income and no evidence as to her assets have been put forward to properly consider her position. But as discussed in several of the cases, the defendant through their insurer is able to cover their costs. The plaintiff on the other hand has a dependent husband and a reduced income, though that by choice.

[17] The other factor I consider appropriate is of course my assessment of the plaintiff’s case upon the issuing of the writ and I have found counsel’s assessment was over-optimistic and therefore the plaintiff is already deprived of costs.

[18] In the circumstances I will allow the plaintiff her disbursements throughout, but I will make no order as to costs payable to either side.

Bullock Orders and Judicial Discretion

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


As previoulsy discussed, when a Plaintiff sues 2 parties and succeeds only against one the Court had a discretion under Rule 14-1(18) to order that the unsuccessful defendant pay the successful defendants costs.  Reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, demonstrating the flexibility of this discretion in action.
In last week’s case (Bakker v. Nahanee) the Plaintiff was injured when struck by a stolen vehicle being driven by the Defendant.  The Plaintiff sued for damages and, as is customary in BC, also sued the Registered owner of the vehicle alleging vicarious liability pursuant to section 86 of BC’s Motor Vehicle Act. As the lawsuit progressed it became clear that the at fault vehicle was indeed stolen making the vicarious liability claims untenable.
Ultimately the action was dismissed against the owner and a settlement was reached with respect to the claim against the driver.  The Plaintiff applied for an order that the Driver pay the costs of the successful owner.  Madam Justice Fitzpatrick agreed such a result was justified but only until the examination for discovery phase where it was obvious that the vicarious liability claims would not succeed.  The Court provided the following reasons:

[40] Supreme Court Civil Rule 14-1 (18) provides that the Court may exercise its discretion in ordering that the costs of one defendant be paid by another defendant:

If the costs of one defendant against a plaintiff ought to be paid by another defendant, the court may order payment to be made by one defendant to the other directly, or may order the plaintiff to pay the costs of the successful defendant and allow the plaintiff to include those costs as a disbursement in the costs payable to the plaintiff by the unsuccessful defendant…

[52] It is not a novel concept that when preparing pleadings, all parties who are potentially liable should be included where a valid cause of action can be reasonably advanced. This applies equally in the arena of motor vehicle litigation. In this respect, Mr. Bakker also relied on the evidence of Mr. David Kolb, a Vancouver lawyer who practices in this area. He states that an owner of the vehicle in question is always named as a defendant arising from the statutory vicarious liability under the Motor Vehicle Act. He goes on to state that even if the car was purportedly stolen, it is wise to err on the side of caution and name all parties until further investigations are done to ensure that all facts are known before the owner is released from the litigation. He cites as an example, that while the driver/thief and the owner may have different names, further investigations may in fact reveal that they were related and resided together, in which case the owner would be liable even if a stolen vehicle is involved. There may also be issues of fraud or improper motive on the part of the owner who reported the vehicle as stolen. Until such facts as may establish liability are ruled out, it is a prudent practice to name the owner.

[53] In these circumstances, as a general proposition, I am of the view that Mr. Bakker was reasonable in naming Ms. Ang and GMAC as defendants to this action…

[77] In my view, and exercising my discretion, the granting of a Bullock order is appropriate in the circumstances but the order should be limited, similar to that which was ordered in Cominco at 212. Accordingly, Mr. Bakker is entitled to a Bullock order but only in respect of the costs incurred up to and including the examination for discovery of Ms. Ang on September 20, 2007. By that time, Mr. Bakker’s counsel had elicited sufficient evidence from Ms. Ang to be satisfied that she and GMAC had no vicarious liability and that there were no mechanical issues relating to the vehicle. Beyond September 20, 2007, I am unable to say that it would be just or fair to fix Mr. Nahanee with the costs of Ms. Ang and GMAC.

Court Should Avoid "Unduly Punitive" Costs Awards in Face of Formal Settlement Offers

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9, ICBC No-Fault (Part 7) Benefits, Uncategorized.

In a good demonstration of the Court’s discretion following a trial where a Plaintiff does not beat a pre-trial defence formal settlement offer, reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, taking a Plaintiff’s post offer costs and disbursements away but not requiring the Plaintiff to pay the Defendant’s costs and disbursements.
In this week’s case (Tompkins v. Bruce) the Plaintiff turned down a pre-trial formal settlement offer of $950,000.  Following trial the Plaintiff was awarded net damages of $851,437.  ICBC applied for post offer costs.  Mr. Justice Curtis found such a result would not be appropriate and instead took away the Plaintiff’s post offer costs and disbursements.  In doing so the Court provided the following reasons:

[28] When the offer in this case was received on October 6, 2011, the plaintiff and his counsel were in possession of the information necessary to make a realistic assessment of the potential recovery.  Naturally, there is no mathematical certainty in those matters and differing courts may give differing amounts.  The plaintiff and his counsel would clearly have contemplated a range of possible recoveryies.  The plaintiff, of course, hopes for the high end of the range and the paying party the low ? settlements are often made somewhere in between.

[29] The offer in this case was reasonable on the facts of the case as they were known to the parties.  It could reasonably have been accepted as being within the range of possible recovery, although likely it would not have been thought by either party at the high end of the range.  The amount of the Offer was reasonable as was its timing: the information necessary to assess the claim was in the possession of the parties, yet there was plenty of time to give careful consideration to the matter before the November trial date.  On the other hand, Mr. Tompkins was seriously injured.  He and his counsel’s view of the matter was that it was worthwhile going to court in the hope of getting a significantly higher award.  It cannot be said that such a decision was unreasonable at the time.

[30] The purpose of cost consequences of reasonable offers is to encourage settlement.  On the other hand, onerous cost penalties should not discourage the seriously injured from a proper hearing and a chance to obtain a higher award, nor should they seriously subtract from what the court has found is appropriate compensation for the injury.

[31] Considering the factors set out in the Rules, it is my opinion that the interests of justice are best served in this case by awarding Mr. Tompkins his costs and disbursements up to and including October 31, 2011, but disallowing them after that date, with the Third Party to bear its own costs.  There is then a consequence for not accepting a reasonable Offer, but the consequence is not unduly punitive in the circumstances.

Today’s case is also worth reviewing for the Court’s discussion of various Part 7 Deductions following a tort action.

ICBC "Nuisance Offer" Fails to Trigger Double Costs

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9, Uncategorized.


One of the most welcome developments under the New Rules of Court (and for a short while prior to their introduction, Rule 37B) was the introduction of discretion to the costs process following trials where formal settlement offers were made.  It used to be that if a Plaintiff had their case dismissed at trial where a formal offer was made before hand (even a $1 offer) the Plaintiff was forced to pay double costs.  Reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, demonstrating this discretion in action.
In last week’s case (Byer v. Mills) the Plaintiff was one of two occupants of a vehicle involved in a serious collision.  Prior to trial the Parties agreed to quantum of $125,000.   The parties could not agree on the issue of liability with ICBC arguing the Plaintiff was the driver of the at-fault vehicle (not the passenger as he alleged).  ICBC made a formal settlement offer of $5,000.
At trial the Plaintiff’s case was dismissed with the Court finding he likely was the driver.  ICBC asked for double costs to be awarded.  Mr. Justice Harris refused to do so finding a nuisance offer that does not provide a genuine incentive to settle should trigger double costs.  The Court provided the following reasons:

[21] It is in these circumstances that one must assess whether the offer of $5,000 plus costs was one that ought reasonably to have been accepted by the plaintiff. Although the prospect of the plaintiff succeeding was always highly uncertain and difficult realistically to assess, I cannot see that it can fairly be characterised as a case that was lacking in some substantial merit. In my view, the offer does not rise above a nuisance offer. The merits of the case, on both sides, and the uncertainties facing all parties, called for a more substantial offer if the offer were to serve the purposes of the Rule. Accordingly, I cannot conclude that the offer was one that ought reasonably to have been accepted by the plaintiff while it was open for acceptance.

[22] In reaching this conclusion, I have approached the question whether the offer was one that ought reasonably to have been accepted by the plaintiff from the plaintiff’s perspective. It will be apparent, however, from my general comments about the inherent uncertainties affecting predicting the merits of the case, that I do not view the offer that was made as objectively reasonable. In that sense, I cannot conclude that it provided a genuine incentive to settle the case. The offer does not possess those characteristics that would justify rewarding the party who was successful at trial with an award of double costs.

[23] I turn to consider the other considerations that may justify an award of special costs, even though the offer is not one that ought reasonably to have been accepted. I approach these factors recognising that the Rule is intended to penalise a party for failing to accept an offer and reward a party who makes a reasonable settlement offer. In brief, I do not find that any of those considerations justify an award of double costs.

[24] Although the plaintiff would clearly have been substantially better off to have accepted the offer, this consideration standing alone is not determinative.

[25] I cannot conclude that the relative financial circumstances of the parties lend support to the conclusion that, nonetheless, an award of double costs is justified.

[26] I am not persuaded that there are any other considerations that would justify an award of double costs. The defendants criticised the cross-examination of their expert, which they characterised as suggesting guilt by association. I did not view the cross-examination as overstepping reasonable professional boundaries.

[27] The application for double costs is dismissed. There will be one set of costs.

Rule 9-1 Does Not Allow the Court to Award Double Disbursements

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9. 52 Comments on Rule 9-1 Does Not Allow the Court to Award Double Disbursements


(Update – April 19, 2013 – The below decision should be cross-referenced with reasons for judgement released today (Gonzales v. Voskakis) where Madam Justice Fitzpatrick came to a different conclusion)
Reasons for judgement were released this week by the BC Supreme Court, Victoria Registry, confirming that the Court cannot award double disbursements following a trial where a formal settlement offer was bested.
In this week’s case (Moore v. Kyba) the Plaintiff was awarded substantial damages in a jury trial following a motor vehicle collision.  The damages awarded exceeded both the Plaintiff’s and Defendant’s pre-trial formal settlement offers.  The Plaintiff brought an application seeking double costs and double disbursements.  Mr. Justice Brown held that while it was appropriate to award double costs, Rule 9-1 does not go so far as to give the Court authority to award double disbursements.  Mr. Justice Brown provided the following reasons:
[8]I am not convinced by the applicant’s argument.  The repeal of the definition relied on in Browne v. Lowe is not determinative and does not require its reversal.  In any event, I conclude that the proper interpretation of Rule 9-1(5) does not permit the Court to award double disbursements.  In Rule 9-1(5)(a), the rule specifically provides for disbursements, while Rule 9-1(5)(b) does not.  Therefore, properly interpreted, Rule 9-1(5)(b) does not permit the Court to award double disbursements after the delivery or service of the offer to settle.

The High Cost of a Successful WCB Defence in a Personal Injury Lawsuit

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


As previously discussed, Section 10 of BC’s Workers Compensation Act operates to generally strip you of your right to sue if you are injured in the course of your employment by someone else in the course of their employment.  If this defence is raised and succeeds in a personal injury lawsuit the claim will be dismissed exposing a Plaintiff to ‘loser pays’ costs consequences.  Reasons for judgement were released this week by the BC Supreme Court, Victoria Registry, demonstrating this reality.
In this week’s case (McKay v. Marx) the Plaintiff was injured in a 2005 collision.   His vehicle was rear-ended by a Fed Ex vehicle.  The Plaintiff sued for damages.  There was no dispute that the Defendant was in the course of employment when the crash happened.  The defendant argued that the plaintiff was also a ‘worker’ and therefore his right to sue was stripped away.  The issue was sent to WCAT for determination who ruled that the Plaintiff was indeed a worker.
Given WCAT’s findings the Plaintiff’s lawsuit was dismissed.  The Defendant applied for costs and ultimately was successful.  In doing so Madam Justice Dorgan provided the following reasons:

[32] The circumstances in which the plaintiff found himself are unfortunate and they garner some sympathy. However, the authorities explicitly prohibit this court from denying costs by exercising discretion out of a sense of fairness or sympathy or a comparison of the relative economic strength of the parties.

[33] In summary, the defendants successfully pled a s. 10 Workers Compensation Act defence and are thus the substantially successful party ?? the winner of the event. The evidence as presented falls short of demonstrating such reprehensible conduct on the part of the defendants that would allow the court, in the exercise of its discretion, to depart from the general rule. Accordingly, the defendants are entitled to costs.

More on the Reality of Insurance and Costs Consequences Following Trial

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9, Uncategorized.


Update March 21, 2014 – the Trial Judgement with respect to the relevance of insurance and costs was upheld today by the BC Court of Appeal
_____________________________________________________
In 2010 the BC Court of Appeal confirmed that Judges can look at insurance when considering the “financial circumstances” of litigants when addressing costs consequences following trials where a formal settlement offer was made.  Further reasons were released last week by the BC Supreme Court, Victoria Registry, confirming that costs consequences should not be applied with the ‘fiction‘ of ignoring insurance.
In last week’s case (Meghji v. Lee) the Plaintiff suffered brain trauma after being struck by a motorist while walking in a marked cross-walk in 2003. At trial the motorist was found 90% at fault for the crash with the Ministry of Transportation shouldering the remaining 10% for designing the intersection with inadequate lighting.
Prior to trial the Plaintiff offered to settle for $750,000.  Neither Defendant accepted.  Damages at trial were assessed at just over $1.1 Million with the Defendants being jointly and severally liable.  The Plaintiff sought and was awarded double costs from the time of her offer onward.  In doing so Mr. Justice Johnston provided the following useful reasons addressing the reality of insurance and the risks of joint and several liability:

[33]Also relevant to consider is the fact that a well-funded party, such as MoTH,  faces higher risk with joint liability when other potentially liable parties have less means or no means with which to satisfy a possible judgment. In such circumstances, the well-heeled party may end up paying more than its proportionate share to the plaintiff if or when the impecunious party exhausts its ability to pay.

[34]This risk is balanced by the potential that the plaintiff might be held partly to blame for her losses, which would confine the well-funded party’s liability to its proportionate share of the loss through several liability: Leischner (Next friend of) v. West Kootenay Power, [1982] B.C.J. No. 1641…

[40]Quite apart from the fact that I am bound by the decision in Smith v. Tedford, its reasoning eliminates one fiction that ought not to complicate proceedings before a judge alone. That fiction is that there is no plan of universal compulsory automobile insurance in effect in British Columbia, mandated by statute, where the details of the coverage available are found in statute and regulation. If judges and others are presumed to know the law, there is little sense in requiring that judges ignore what the law provides when dealing with costs.

Formal Settlement Offers and Costs Consequences: A "Broad Discretion"

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9, Uncategorized.


Reasons for judgement were released last month by the BC Supreme Court, Vancouver Registry, discussing the broad discretion that Judges have respecting costs consequences following trial where formal settlement offers have been made.
In last month’s case (Ward v. Klaus) the Plaintiff was involved in a motor vehicle collision.  Prior to trial ICBC tabled a $493,000 settlement offer.  As trial neared the offer was increased to $595,000.  The Plaintiff rejected these offers and went to trial.  At trial the presiding judge awarded just over $434,000.
ICBC brought an application to be awarded post offer costs.  This would have created a ‘costs swing‘ of $149,000.  Mr. Justice Goepel ultimately stripped the Plaintiff of her post offer costs but did not make her pay the Defendants costs reducing the sting of her failure to best the formal settlement offer.  In demonstrating the ‘broad discretion‘ of Rule 9-1 Mr. Justice Goepel provided the following reasons:

[32] Since its inception in 2008, much ink has been spilled explaining the Rule. LexisNexis Quicklaw presently references some 231 decisions in which the Rule has been discussed. From the decisions, some broad principles of general application have emerged concerning how the Rule should be applied.

[33] It is now generally recognized that the Rule provides for the exercise of a broad discretion by trial judges and provides principles to guide in the exercise of that discretion: Roach v. Dutra, 2010 BCCA 264, 5 B.C.L.R. (5th) 95…

[53] For the reasons I have stated, it cannot be said that the plaintiff should have accepted either offer. That is, however, the beginning, not the end of the analysis. Unlike Rule 37 which mandated the outcome regardless of the circumstances, Rule 9-1 gives the court a broad discretion to determine the consequence of a successful offer to settle. While the Rule is intended to reward the party who makes a reasonable settlement offer and penalizing the party who fails to accept it, the several options set out in Rule 9-1(5) allows the court to determine with greater precision the penalty or reward appropriate in the circumstances.

[54] In this case, regardless of the merits of the plaintiff’s case, the defendant’s offers to settle cannot be ignored. To do so would undermine the purpose of the Rule. Having decided to proceed in the face of two not insignificant and ultimately successful offers to settle, the plaintiff cannot avoid some consequences. That said, in the circumstances of this case, to deprive the plaintiff of her costs and have her in addition pay the costs of the defendant would be too great a penalty. It would not be fair or just to require the plaintiff to pay the defendant’s costs after the date of the First Offer. Similarly, however, I find that the defendant should not pay the costs of the plaintiff after the delivery of the First Offer, which costs were only incurred because the plaintiff decided to proceed.

[55] Accordingly, I find that the plaintiff is entitled to her costs up to May 3, 2010. The parties will bear their own costs thereafter.

Insurance Policy Limits Relevant to Formal Settlement Offer Costs Analysis

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 7, BCSC Civil Rule 9.


In 2010 the BC Court of Appeal found that Judges could consider the existence of insurance when exercising costs discretion following a trial in which a formal settlement offer was made.  Last week reasons for judgement were released by the BC Supreme Court, Victoria Registry, expanding on this principle finding that the limits of insurance coverage were equally applicable.
In last week’s case (Meghji v. Lee) the Plaintiff suffered brain trauma after being struck by a motorist while walking in a marked cross-walk in 2003.  At trial the motorist was found 90% at fault for the crash with the Ministry of Transportation shouldering the remaining 10% for designing the intersection with inadequate lighting.
Following trial the Plaintiff applied for double costs as the trial result exceeded a pre-trial formal settlement offer she made.   The Defendant wished to place information relating to his insurance policy limits before the Court before a costs decision was made.  In finding this was appropriate Mr. Justice Johnston provided the following reasons:

[6] Rule 7-1(4) reads:

(4)        Despite subrule (3), information concerning the insurance policy must not be disclosed to the court at trial unless it is relevant to an issue in the action.

[7] Subrule (3) requires a party to list in his or her list of documents insurance policies that, generally speaking, might be available to satisfy a judgment in whole or in part should the judgment be entered.

[8] Mr. Lee has responded by arguing that the trial is over (subject, of course, to an application to re-open prior to entry of judgment), and even if the trial is not at an end, his policy limits are now relevant to an issue in the action, being costs. That relevance can fall under one or more of the considerations set out in Rule 9?1(6).

[9] Counsel for the Ministry of Transportation and Highways (MoTH) disagrees as to the relevance of Mr. Lee’s insurance limits.

[10] I have concluded that the amount of Mr. Lee’s automobile liability insurance limits is relevant to the considerations set out in Rule 9-1(6). The amount of available insurance could affect the question whether the offer was one that ought reasonably to have been accepted, and it could also affect the weighing of the relative financial circumstances of the parties.

[11] Counsel for Mr. Lee is authorized and directed to disclose the amount of Mr. Lee’s liability insurance limits operative at the time of the accident.