BC Supreme Court Costs Cases – Page 15

Formal Settlement Offers, Costs, and the Flexibility of the New Rules of Court

Written by admin on April 8, 2011. Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14, BCSC Civil Rule 9, Uncategorized. 46 Comments on Formal Settlement Offers, Costs, and the Flexibility of the New Rules of 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.

Costs and Sufficient Reason to Sue in the Supreme Court: Clarity from the BCCA

Written by admin on March 22, 2011. Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14, Uncategorized.

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.

Costs Awards For Settlements Below $100,000

Written by admin on February 16, 2011. Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14, BCSC Civil Rule 15, Uncategorized. 58 Comments on Costs Awards For Settlements Below $100,000

(Note: The case discussed below was upheld on appeal in July, 2011 by Madam Justice Ker)
As previously discussed, Rule 15 is the new BC Fast Track Litigation Rule and it is mandatory for cases for damages seeking less than $100,000 and for cases that “can be completed within 3 days“.
Rule 15-1(15) generally limits costs awards for fast track lawsuits to no more than $11,000. Reasons for judgement were released today by the BC Supreme Court, New Westminster Registry, addressing whether this limit applies to non-fast track cases that settle for less than $100,000. In short, Master Keighley held that it can, however, when a case has been removed from the fast track the costs restriction does not apply.
In today’s case (Johnson v. Axten) the Plaintiff started the lawsuit under the former Rule 68. The parties consented to remove the case from Rule 68 prior to trail and obtained a Court order to that effect. The case then settled after the new Rule 15 came into force. The settlement was for $90,000 plus costs and disbursements. The Defendant argued that the Rule 15 cap on costs should apply. Master Keighley disagreed finding that while it could apply, it should not in the circumstances of this case. The Court provided the following useful reasons:

[17] The Majewska case does, however, contain this helpful observation on the issue of “opting out” of Rule 66, at para. 34:

Moreover, it is important to recognize that parties to a R. 66 action are not compelled to remain in the fast track process. If the spectre of “special circumstances” emerges at any time during the action, whether in the form of complex issues, offers to settle, increased trial time, or any other situation, the parties may consent to removing the case from R. 66, or obtain an order to that effect under R. 66(8). Thus, if a concern arises that costs under R. 66(29) will not be adequate, this can be remedied by taking appropriate action during the proceeding.

and at para. 36:

“Here, if the plaintiff was concerned that R. 66 was no longer appropriate, the proper response was to apply for removal from the fast track litigation. If she chose not to take that step, she should have no basis for complaint that her costs are limited by R. 66(29).”

[18] In other words, a party who opted out of Rule 66 prior to trial was not limited by Rule 66(29). It is noteworthy that Rule 68, which governed this action prior to the parties “opting out” contained no limitation on costs. Also noteworthy is that Rule 15?1 as well as the case with its predecessors, provides for opting out of the provisions for the Rule and in this case the parties did so.

[19] Ms. Deane-Cloutier says that although Rule 15-1 does not, on its face, contemplate settlement, neither did Rule 66(29), but that did not prevent the court from holding that the subrule applied to settlement of cases governed by the Rule. That submission, with respect, ignores however the very clear statement of the Court of Appeal in Majewska: that once Rule 66 ceased to apply to an action, a party would not be limited to costs recoverable under Rule 66(29).

[20] The plaintiff’s costs will be assessed pursuant to Schedule B of the Supreme Court Civil Rules. While I agree that Rule 15-1(1) provides that cost limitations apply to cases which were not “fast tracked” but should have been (regardless of the intentions of the parties), the rule nonetheless provides that even if otherwise applicable, it will not apply to cases where the court has ordered that it will cease to apply. The court did so here, with the consent of the parties and, as a result, the cost limitation set out in Rule 15-1, does not apply.

Costs Awarded To Plaintiff Following Successful Part 7 Action of "Limited Monetary Value"

Written by admin on February 12, 2011. Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14, ICBC No-Fault (Part 7) Benefits.

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.

Court Lacks Discretion To Deviate From Costs Agreement In Formal Settlement Offers

Written by admin on January 27, 2011. Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9, Uncategorized. 56 Comments on Court Lacks Discretion To Deviate From Costs Agreement In Formal Settlement Offers

Authorities under the formal Rule 37B held that when a formal settlement offer dealing with costs consequences was accepted the BC Supreme Court had no discretion to make a different order with respect to costs. The first case I’m aware of dealing with this issue under the New Rules was released today. The Court upheld the principle developed under the former rule.
In today’s case (Sahota v. Sandulo) the Plaintiff was involved in a 2004 motor vehicle collision in Surrey, BC. He started a lawsuit which was set for trial by Jury. In the course of the lawsuit the Plaintiff incurred significant disbursements advancing the claim. Fearful that the Jury trial would not go favorably the Plaintiff delivered a formal offer of settlement of $3,000 “plus court costs and disbursements“. The Defendant accepted the formal offer.
The parties then could not agree on the costs consequences. The Defendant brought a motion to address this issue. Mr. Justice Armstong held that precedents developed under Rule 37B remain good law and that the Court has no discretion with respect to costs awards in these circumstances. The Court provided the following reasons:

[28] Generally, the Court has discretion in relation to costs; however, where an offer to settle with specific terms as to costs has been accepted, to which Rule 9-1 applies, the Court does not have discretion to vary the terms of that agreement as they relate to costs.

[29] In Buttar v. Di Spirito, 2009 BCSC 72, Gerow J. held:

[11] Both parties advanced arguments that the court has discretion under Rule 37B to make an order regarding costs. However, it is my opinion that the court has no discretion to make an order regarding costs in this matter. Mr. Buttar accepted the offer put forth by the defendants, including the offer regarding costs, without reservation. It is my view that Rule 37B does not confer discretion on the court to set aside an agreement that has been entered into between the parties regarding costs.

…

[33] The rule in Buttar has been consistently applied in this Court and appears determinative of this issue.

[34] Buttar and cases following it did not address Rule 9-1(4) as it relates to an accepted settlement that addresses costs. Rule 9-1(4) states:

(4) The court may consider an offer to settle when exercising the court’s discretion in relation to costs.

[35] Buttar held that the Court does not possess discretion to vary costs where a formal offer to settle, specifically addressing costs, has been accepted. If, in such circumstances, the Court is not in a position to exercise discretion in relation to costs, Rule 9-1(4) is of no application.

[36] The rule in Buttar is applicable to the defendant’s application in this case. The plaintiff’s offer to settle, accepted by the defendant, created an agreement between the parties. This agreement is not subject to the Court’s discretion as to costs. In my view, the purpose of the rules would be frustrated if a party was free to accept an offer, clear and unambiguous on its face, and then move to invoke the Court’s discretion to add or vary terms to substantially rewrite the agreement reached by the parties.

Double Costs Ordered for Taking "Extremely Weak" Case to Trial

Written by admin on January 21, 2011. Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9, Uncategorized.

As recently discussed, when a party is on the losing end of a lawsuit in the BC Supreme Court they usually have to pay the winning sides costs. If the successful party beat a pre-trial formal settlement offer the Court has the discretion of awarding double costs. Reasons for judgement were released this week considering an application for double costs where a very modest formal offer was made prior to trial.
In today’s case (Brooks v. Gilchirst) the Plaintiff was involved in two motor vehicle incidents. She sued for damages and both claims were heard at the same time. ICBC disputed the allegation that a collision took place in the first incident. Prior to trial ICBC made a $1 formal settlement offer. The Plaintiff rejected this offer and went to trial. Mr. Justice Sigurdson dismissed the claim finding that “no collision” took place.
ICBC applied for double costs. The Plaintiff opposed arguing that the nominal offer should not trigger increased costs. Mr. Justice Sidgurson agreed that while this was typically the case, in circumstances where an ‘extremely weak‘ case proceeds to trial double costs could be awarded in the face of a formal settlement offer. In reaching this result the Court provided the following reasons:

[16] In terms of the relationship between the terms of settlement offered and the final judgment of the court, the offer was better than the result, but the offer was only for the sum of $1 plus disbursements. Ordinarily I would think that a nominal offer of one dollar may not attract orders for double costs but I know that in some cases even nominal offers may attract orders of double costs. See for example MacKinlay v. MacKinlay Estate, 2008 BCSC 1570; Ludwig v. Bos, 2010 BCSC 695.

[17] This is a case where there had been expenditures on medical and expert reports. I think that where it becomes clear that liability will be extremely difficult to establish a nominal offer that has the effect of allowing the plaintiff to recover disbursements and avoid liability for the other party’s disbursements may nevertheless be a substantial offer.

[18] In considering whether the offer ought reasonably to have been accepted, I think it was quite clear that the plaintiff’s original theory that she had been sideswiped as a result of the collision involving the other two adjacent cars was not maintainable once each side had filed their expert reports. This was not merely a case where the plaintiff had a claim that was difficult to prove at trial; this was a unique case where on the evidence available to her before trial the plaintiff should have realized that she did not have a realistic position on liability…

[23] In the circumstances, I think that the ICBC defendants should be awarded costs with respect to the main action. I have estimated the main action consumed 90% of the time at trial. The defendants were clearly successful and, in my view, it is not an appropriate order for each side to bear its own costs.

[24] In terms of whether I should award double costs, I think that, in exercising my discretion, the offer reasonably ought to have been accepted in the days prior to trial. Although the offer was modest, the circumstances at that time were clear that her case was extremely weak, she would have avoided liability for disbursements, and in fact recovered the disbursements she had incurred.

[25] I award double costs for the period after two days prior to trial.

The High Cost of Losing an ICBC Injury Claim

Written by admin on January 19, 2011. Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14, BCSC Civil Rule 9, Uncategorized.

I’ve written many times about the significant costs a party can be exposed to for being on the losing end of a BC Supreme Court lawsuit. Reasons for judgement were released today further demonstrating this reality under the New BC Supreme Court Rules.
In today’s case (Chen v. Beltran) the young Plaintiff entered an intersection against a red light on his skateboard. He was struck by a vehicle operated by the Defendant and sustained injuries. He sued for damages but his claim was dismissed with the Court finding him entirely at fault for the accident.
Rule 14-1(9) of the BC Supreme Court Rules typically requires a losing party to pay costs to a successful party. ICBC relied on this section and requested that their costs of over $75,000 be paid by the Plaintiff’s family. The Plaintiff opposed arguing that no costs should be awarded. One of the reasons advanced by the Plaintiff was that such an order would “financially cripple the (plaintiff’s) family“.
Mr. Justice Greyell rejected this argument. The Court, while disallowing some of the most significant disbursements claimed by the Defendant, did go on to order that the Plaintiff pay the Defendant’s costs. In rejecting the “financially crippling” argument Mr. Justice Greyell reasoned as follows:
[11] The first basis upon which the plaintiff says the defendants should be denied costs is that Allan suffered significant injuries in the Accident and will require ongoing medical and psychological care throughout his life. His ongoing care will involve significant cost to both his parents. Allan’s parents have already incurred substantial debt to prosecute the lawsuit, have limited financial resources and will have difficulty providing for Allan’s future care even if they are successful on this application. The plaintiff says that an order for costs will financially “cripple” the family. While I have great sympathy for Allan’s parents the case law is clear that the financial circumstances of a litigant, standing alone, are not to be taken into consideration as a factor in the awarding of costs…

[14] It is clear based on the above authorities that this Court is unable, on any principled basis, to take the plaintiff’s financial circumstances into account in determining whether to award costs.

[15] To conclude otherwise would undermine the rationale underlying Rule 14-9 and would likely lead to the promotion of litigation rather than to promote the “winnowing” function described by Hall J.A. in Catalyst Paper. It would lead to a collapse of the general principle discussed in the authorities and result in the unacceptable proposition that costs in each case would be measured not by a party’s success but by the personal financial circumstances of the litigants.

It is worth noting that this result should be contrasted with cases decided under Rule 9-1(5) where the Court does have a discretion to consider a party’s financial circumstances following trial where a formal offer of settlement was made.
Today’s case demonstrates the real world expenses that can be associated with losing an ICBC Claim in the BC Supreme Court. It is vital to gauge these costs and the risks of trial prior to putting a case before a Judge or Jury.

Interest on Disbursements in Injury Claims Recoverable "As a Matter of Principle"

Written by admin on December 28, 2010. Posted in BC Supreme Court Costs Cases, Civil Procedure, Uncategorized. 48 Comments on Interest on Disbursements in Injury Claims Recoverable "As a Matter of Principle"

Reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, illustrating a welcome development in BC personal injury law.
As discussed on previous occasions, injury lawsuits can be expensive and oftentimes individuals rely on their lawyers to finance the costs necessary to prosecute their claim. These costs can easily add up to tens of thousands of dollars and significant interest can accrue on these expenses (called disbursements). After claim settlement or trial a debate often arises as to who should pay the interest on disbursements.
Earlier this year Mr. Justice Burnyeat held that “The law in British Columbia is that interest charged by a provider of services where the disbursement has been paid by counsel for a party is recoverable as is the disbursement. The interest charge flows from the necessity of the litigation. If the disbursement itself can be assessed as an appropriate disbursement, so also can the interest owing as a result of the failure or inability of a party to pay for the service provided.” Last week a case was released going further holding that in the appropriate circumstances interest charged by lawyers for financing disbursements can be recoverable as a disbursement.
In last week’s case (Basi v. Atwal) the Plaintiff was injured in a motor vehicle collision. The Plaintiff hired a lawfirm that financed the prosecution of the claim. The lawfirm did so through a line of credit which in turn charged interest. The interest was passed on to the client. After settlement ICBC argued that the interest charged was not a reasonable disbursement. Registrar Bolton disagreed and provided the following instructive reasons:
…In… Milne v. Clarke [2010], BCSC 317, the learned judge quite clearly says that the successful party is entitled to interest on a specific disbursement where the provider of the service in question had charged interest to counsel for that party.
I see no reason in principle to distinguish this decision on the basis that in the Milne case, the interest has been charged by the provider of the service to the law firm and, therefore indirectly to the client, whereas here the interest is being charged directly by the lawyers pursuant to an agreement they have with their own bank.
So I am satisfied that the charge is potentially proper, give the appropriate circumstances. Here, the circumstances are that the law firm has an arrangement with its own bank to fund disbursements. They are funded on the basis of an agreement of paying six percent over prime. I am satisfied that that is a reasonable interest rate in these circumstances…
So to summarize: first of all, I accept that the principle of allowing interest is one that the law recognizes, at least since this decision of Mr. Justice Burnyeat. Secondly, I am satisfied that the accounting that would be required to satisfy the court that the charge does relate specifically to this particular file, has been properly done. Thirdly, I am satisfied that the interest rate being charged by the bank is reasonable…
In those circumstances, that only leaves the question of amount to be decided…as a matter of principle, or law, I suppose, I am satisfied that a claim for interest here is proper.
As readers of this blog know, I like to link to the full judgments of the cases discussed here. As of the date I write this post Basi v. Atwal remains unpublished. I will link to the case should this change but in the meantime am happy to e-mail a full copy of the case to anyone who may need it.

Challenging ICBC Surveillance Disbursements – Evidence of Necessity Required

Written by admin on December 27, 2010. Posted in BC Supreme Court Costs Cases, ICBC Privacy Issues, Uncategorized. 49 Comments on Challenging ICBC Surveillance Disbursements – Evidence of Necessity Required

If parties to a lawsuit can’t agree which disbursements were reasonably incurred they can ask the Court to decide the issue. As recently discussed, it is important for parties to bring appropriate evidence to Court to justify their disbursements. This was further addressed in reasons for judgement released today by the BC Supreme Court, New Westminster Registry.
In today’s case (Hambrook v. Sandhu) the Plaintiff was injured in a 2004 BC motor vehicle collision. In the course of the lawsuit ICBC made a formal offer to settle the claim for $75,000. About 16 months later the Plaintiff accepted the offer. The formal offer had a declining value reducing its amount by ICBC’s ‘costs and disbursements‘ incurred following the delivery of the offer.
After the offer was accpeted ICBC produced a bill of costs totalling almost $28,000. Once of the biggest disbursements included in this total were the accounts of a private investigator who was retained to conduct video surveillance of the Plaintiff. These accounts totalled almost $20,000.
The Plaintiff argued that ICBC’s disbursements were unreasoble. Eventually the BC Supreme Court was asked to decide the issue. Master Keighley sided largely with the Plaintiff and reduced ICBC’s account to just over $6,000. In doing so the Court provided the following reasons refusing the disbursements related to the private investigator and addressing the need for parties to come to Court with adequate evidence:

[11] As a general proposition, the party claiming reimbursement for sums expended in the course of litigation bears the burden of establishing the reasonableness of the charges claimed.

[12] I have suffered, on this assessment, from a paucity of evidence offered by the defendants in support of the disbursement claims. With respect to the Lanki Investigations Inc. invoices I have no evidence before me as to the necessity for or results of these investigations. I am told by counsel that the investigations, which consisted largely of video surveillance, were instrumental in resolving this claim. I have no evidence as to this effect, however, only records of the amount of time spent by various individuals. I note that the surveillance took place after the delivery of the offer to settle and in the last two weeks prior to trial. Mr. Smith says that the surveillance materials were of little value and that the case settled when it did because of a clarification in the law of costs and a change in his client’s employment. The former, he says, meant that his client would potentially net more money as a result of accepting the offer than he had previously anticipated, and the second meant a substantial limitation of his claim for loss of future earnings. These details are confirmed to some extent by the plaintiff’s affidavit of February 6, 2009. In the circumstances, while I am not prepared to say that the defendants’ expenses for surveillance were entirely unreasonable, I am compelled by the tariff item and the case law to allow them only if settlement was achieved as a result of the services provided. In the absence of any evidence from the defendants on this point, I cannot do so. The Lanki accounts are disallowed.