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Defendant Awarded Double Costs for Successfully Defeating Claim Where "Walk Away" Offer was Made

Written by admin on . Posted in BC Supreme Court Costs Cases, Uncategorized.


Rule 37B, the BC Supreme Court Rule dealing with formal settlement offers, continues to be shaped by the Courts.  One factor that is not yet firmly established is what effect a “walk away” offer made by a Defendant has after a Plaintiff’s claim is dismissed at trial.
When a party sues for damages in the BC Supreme Court and later decides that their lawsuit is likely going to lose at trial they can discontinue.  If this is done the Defendant is able to seek their costs at the time of discontinuance unless they waive this right.  A common strategy of Defendants when they are confident they will win at trial is to make a formal “walk away” offer where they waive their right to costs if the Plaintiff discontinues.  If the Plaintiff does not take the offer and goes on to lose at trial the Defendant may be entitled to ‘double costs’ which could easily add up to tens of thousands of dollars.  Reasons for judgement were released this week by the BC Supreme Court dealing with a walk away offer.
In this week’s case (Riley v. Riley) the parties were involved in a lawsuit involving the transfer of real-estate between family members.  (although this was not a personal injury case there is no reason why the Court’s reasoning cannot be used in the injury claims context).  Prior to trial the Defendant made a formal offer under Rule 37B for the Plaintiff to walk away from the lawsuit on a ‘no costs‘ basis.  The Plaintiff refused the offer, went to trial where her case was dismissed.  The Defendant then asked the Court to award ‘double costs‘ and Mr. Justice Greyell agreed to do so.  In concluding that this was a fair result the Court provided the following reasons:

[20] In MacKinlay v. MacKinlay Estate, 2008 BCSC 1570, Savage J. also considered the effect of Rule 37B when a nominal offer was made.  The issue was whether double costs should be awarded where the successful defendant had made a nominal offer to settle.  He held, at paras. 34-35:

[34]      While a nominal offer might be described as strategic, it was a strategy aimed at persuading the Plaintiffs to discontinue the proceeding, an outcome that is favourable as compared to the outcome the Plaintiffs obtained at trial.  Such an offer is one of the few tools in the arsenal of a defendant of relatively modest means which might exert pressure on a plaintiff pursuing an unmeritorious claim.

[35]      In this regard, albeit in the context of the former Rule, the Court of Appeal in Kurylo v. Rai 2006 BCCA 176, 53 B.C.L.R. (4th) 214, at ¶ 7 said:

…. When a defendant assesses his position in litigation of any kind he may consider that the plaintiff has no case and if the case goes to trial, will fail.  But the defendant may also be willing to make some minor offer which would carry with it the costs in the hope that the action will go away and that he will not, thereafter, incur large legal bills to establish his legal position that the plaintiff has no case.

[21] I see no logical distinction between a nominal offer and an offer such as that made by the defendant in this case.  The principle is the same.  One party is provided with an offer to settle and if not successful at trial in advancing its position relative to the offer it may be held accountable for costs of pursuing the matter to trial.

[22] The second factor referred to in Rule 37B(6) clearly favours the defendant.  The judgment upheld the position she outlined in the offer to settle.  Had the plaintiff accepted it he would have saved not only his legal costs but also the legal costs he must pay to the defendant as the successful party.

[23] There are no other relevant circumstances which bear on my determination of double costs.  The caution expressed by Hall J.A. in Catalyst Paper Corporation v. Companhia de Navegaçäo Norsul, 2009 BCCA 16, 86 B.C.L.R. (4th) 17, is applicable in this case.  Based on the considerations in the above paragraphs, I conclude the plaintiff shall pay double costs to the defendant.  Those double costs shall commence seven days from the date the offer was made.

As mentioned at the start of this article, the formal offer Rule is still being shaped and the result of a ‘walk away’ offer is still not certain.  To read a case where the Court refused to award double costs where a walk away offer was made you can click here.
In my continued efforts to get us all prepared for the New BC Supreme Court Civil Rules I will again point out that Rule 37B will be replaced with Rule 9 under the New Rules. The new rule uses language that is almost identical to Rule 37B so the issue of the effect of ‘walk away’ offers will continue to be judicially shaped moving forward.

The Problem With Losing An ICBC Injury Claim at Trial

Written by admin on . Posted in BC Supreme Court Costs Cases, Uncategorized. 60 Comments on The Problem With Losing An ICBC Injury Claim at Trial


When Plaintiffs have their injury claim dismissed in the BC Supreme Court, not only do they get nothing to compensate them for their injuries, they actually end up having to pay the Defendant money.   How can this be?  The reason is something called “costs“.  Generally speaking, the loser has to pay the winner’s Court costs and disbursements.
So how much money are we talking about here?  The answer is thousands, sometimes tens of thousands, sometimes even over one hundred thousand dollars.  Reasons for judgement were released this week by the BC Supreme Court, New Westminster Registry, demonstrating this.
In this week’s case (Pearlman v. Atlantic Trading Company Ltd.) the Plaintiff was involved in a motor vehicle collision in 2004.  He sued the party he claimed was responsible for his injuries.  He also sued ICBC alleging that ICBC “had requested a medical report from his family doctor whose authorization to provide the report had been revoked by the Plaintiff.”.
A jury dismissed the Plaintiff’s first claim and a Judge dismissed the Plaintiff’s second claim.  ICBC was awarded their Court costs.  The BC Supreme Court assessed these at $66,000 for the two claims combined.    The Plaintiff then appealed these costs awards.    Madam Justice Gropper dismissed the Plaintiff’s appeals and upheld the awards.
While this case does not contain any unique or novel principles of law, it is worth reviewing because it demonstrates the stark realty that people can pay a very high price if they are on the losing end of an ICBC claim in the BC Supreme Court.
If you are interested in more information on costs consequences in BC Supreme Court injury lawsuits you can click here to read my archived posts on this topic.

Defendant Awarded Trial Costs for Beating Formal Settlement Offer in ICBC Claim

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While Rule 37B is still being shaped in its application one pattern that is relatively well established is that if a Plaintiff is awarded less at trial than ICBC’s formal settlement offer the Plaintiff will likely be deprived of their trial costs and be ordered to pay a portion of the Defendant’s costs.  Reasons for judgement were released this week by the BC Supreme Court, Courtenay Registry, demonstrating such a result.
In this week’s case (Berry v. LaBelle) the Plaintiff was injured in a motor vehicle collision.  He sued for damages.  The month before trial ICBC made a formal settlement offer to resolve the claim for $46,000.  This offer was rejected.  At trial the Plaintiff was awarded $30,000 in total damages by the BC Supreme Court (you can click here to read my article summarizing the trial judgement).
ICBC brought a motion under Rule 37B to be awarded double costs for all steps taken in the lawsuit after the formal offer was delivered.  Madam Justice Baker refused to award double costs, however the Court did deprive the Plaintiff of costs following the formal offer and ordered that the Plaintiff pay the Defendant’s costs from the week after the offer was made through to trial.
The Court recognized that such an order would significantly reduce the amount of damages the Plaintiff would receive.  Madam Justice Baker provided the following reasons justifying this result:
[13] Counsel for the defendant submits, and I agree, that the plaintiff did set his sights very high at trial.  In oral submissions at the end of trial, counsel for the plaintiff argued that the appropriate award for non-pecuniary damages was between $150,000 to $200,000; that the plaintiff should receive an award of $45,000 to $60,000 for past loss of income; and that the court should award $400,000 for loss of the capacity to earn income in future.  The submissions about income loss were particularly ambitious given that the plaintiff provided no documentary evidence whatsoever about income earned by the plaintiff before or after the accident…

[15]        I consider that the offer made by the defendant was one that ought reasonably to have been accepted, although the plaintiff would, in my view, have reasonably needed some time to consider his position and seek his counsel’s advice.

[16]        As stated earlier, the plaintiff ought to have anticipated significant difficulty in maintaining a loss of income claim without the ability, or willingness, to provide documentary evidence about his earnings before or after the accident.

[17]        By the date of the defendant’s offer, the plaintiff had available to him the medical opinion evidence on which he relied at trial.  Given that the medical evidence ruled out neurological injury; plaintiff’s counsel would have had plenty of precedents available to assist in assessing the likely range of quantum of non-pecuniary damages…

[19]        Certainly the effect of the costs order the defendant is seeking would be to deprive the plaintiff of the greater part of the compensation to which I concluded he is entitled by reason of the defendant’s negligence and the plaintiff’s injury…

[21] In all of the circumstances, I am satisfied that it would be inequitable to make an award of double costs in favour of the defendant.  The defendant having elected to proceed under Rule 66, I am satisfied that the defendant’s entitlement to costs should be governed by Rule 66.  I award the plaintiff his costs, on Scale B, not to exceed $6,600, up to and including April 21, 2009, plus disbursements incurred to that date.  In respect of proceedings after that date, the defendant shall have her costs, but also limited to $6,600 pursuant to Rule 66(29); and her disbursements from and after April 22, 2009.   There shall be no order for double costs.

As readers of this blog are likely aware, Rule 37B will be replaced with Rule 9 on July 1, 2010 when the new BC Civil Rules come into force. The new rule uses language that is almost identical to Rule 37B which will likely have cases such as this one retain their value as precedents moving forward.

You can click here to access my archived posts discussing other Rule 37B cases.

ICBC Asks Court of Appeal to Address "Costs" Awards In Cases Worth Under $25,000

Written by admin on . Posted in BC Supreme Court Costs Cases, Uncategorized. 68 Comments on ICBC Asks Court of Appeal to Address "Costs" Awards In Cases Worth Under $25,000

I’ve written many times about the fact that the BC Supreme Court Rules give trial judges a discretion to award a successful plaintiff Court Costs even if the amount awarded falls in the Small Claims Court’s Jurisdiction.
Two recent cases were released today by the BC Court of Appeal demonstrating that ICBC is interested in having the circumstances in which these awards are made limited.
In the first case (Morales v. Neilson) the Plaintiff was injured in a BC Car Crash and sued for damages.  At trial he was awarded just over $12,000.  The trial judge went on to award the Plaintiff costs despite the fact that the judgement was for an amount within the small claims courts financial jurisdiction.  ICBC asked permission to appeal but this was refused with the BC High Court holding that the Judge appropriately applied the test for discretionary costs.
The second case, however, had the BC Court of Appeal more interested.  In this case (Gradek v. DaimlerChyrster Financial Services Canada Inc.) the trial judge awarded a Plaintiff under $10,000 in total compensation as a result of a BC collision.  The Court went on to award the Plaintiff costs.  (You can click here to read my summary of the trial decision regarding costs).  ICBC asked the Court of Appeal to intervene arguing that the trial judge was wrong in considering the ‘procedural advantages‘ available in the BCSC as factors which give a plaintiff ‘sufficient reason‘ to sue in that Court when the case is worth clearly less than $25,000.  The Court of Appeal agreed to hear the case noting that this is an important issue for ICBC. Specifically the BC High Court held as follows:

[7] The issue on which the appeal is sought to be brought is a pure issue of law. It is one of statutory construction, the question being the meaning of the words “sufficient reason” in the context of Rule 57(10). The language of Rule 57(10) does not, on its face, limit “sufficient reason” to a consideration of the anticipated quantum of damages.  Even so, while I would not describe the appellant’s case as a very strong one, it does seem to me that it is arguable that “sufficient reason” contemplates jurisdictional questions (particularly the quantum of damages), and not procedural advantages.  In my view, there is sufficient merit in the appeal to warrant a hearing before a division of the Court.

[8] The issue of how the Supreme Court is to determine whether a matter is brought in that court for “sufficient reason” is a matter of general importance in litigation, particularly given that the monetary limit for Small Claims Court has expanded to $25,000. There will now be a sizable number of cases that fall below the Small Claims limit.

[9] The case is of significance to the defendant in this matter; from a practical standpoint, it is an institutional defendant involved in many cases. The case is, however, of limited significance to the plaintiff.  While the costs award is a significant proportion of the entire award received by the plaintiff, the costs of defending the appeal may significantly exceed the amount in issue.

[10] This concern is mitigated, however, by the fact that the appellant is prepared to abide by an order that it will pay the respondent’s costs on Scale 1 in any event of the appeal (it is acknowledged that the respondent would be free to argue before the Court that a higher level indemnity should be awarded).

[11] In the circumstances, I am satisfied that leave ought to be grant and that a division of the Court should hear this matter. Leave is granted. The appellant will be responsible for the respondent’s costs in any event of the appeal.

I will be sure to write about the BC Court of Appeals decision in this case once it is released.

Plaintiff Awarded Double Costs for Beating Pre Trial Formal Settlement Offer; Relevance of ICBC Insurance Considered

Written by admin on . Posted in BC Supreme Court Costs Cases, Settlement Law, Uncategorized.


In my continued efforts to track the judicial development of Rule 37B, reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, awarding a Plaintiff double costs for the trial of her ICBC claim.  The contentious issue of the existence of Insurance as a potentially relevant factor was also considered.
In today’s case (Pham-Fraser v. Smith) the Plaintiff was injured in a BC motor vehicle collision.  Before trial the Defendant (insured with ICBC) offered to settle under Rule 37B for $115,000.  The Plaintiff responded with a formal settlement offer of $149,000.  Neither party accepted the respective offers and proceeded to trial where the Court awarded just over $400,000 in total damages (click here to read my previous post discussing the trial judgement).
The Plaintiff, having comfortably beat her formal offer, asked the Court to award double costs under Rule 37B.  In granting the motion Mr. Justice Greyell held as follows:

[24] The second factor referred to in Rule 37B(6) also operates in the plaintiff’s favour.  There is a wide difference between the offer to settle and the final judgment.  The judgment is almost three times the amount offered.  The plaintiff’s offer was made because she wished to avoid court and having to give her evidence.  Some of her evidence was of a private nature relating to matters she did not wish to talk about in the public forum of a court of law (that is, how the accident affected her work and home life, her marital relationship with her husband after the accident, and the fact she suffered from incontinence).

[25] It is not necessary to consider factors set out in Rule 37B(6)(c) and (d).  I do not accept the plaintiff’s submission I ought to consider that the defendants, being represented by ICBC, are in a “sophisticated” position in terms of providing settlement instructions and that this is a factor to be taken into account and operate in the plaintiff’s favour in exercising my discretion under the rule.   The plaintiff’s argument seems to me to simply be another way of putting a “deep pockets” argument forward: an argument the courts have thus far rejected as being a factor to be considered in determining whether to award costs under Rule 37B.

[26] After considering the factors which I do consider relevant under Rule 37B, I conclude the plaintiff is entitled to an award of double costs.

As previously discussed, the BC Supreme Court is inconsistent on whether a Defendant being insured is a relevant factor under Rule 37B and clarity from the Court of Appeal would be welcome.  While more cases than not have held that insurance is not a relevant consideration it is not yet clear that this is correct.  If the law was settled it would assist lawyers in advising their clients of the potential risks and benefits of trial.

In my continued efforts to get us all prepared for the New BC Supreme Court Civil Rules I will again point out that Rule 37B will be replaced with Rule 9 under the New Rules. The new rule uses language that is almost identical to Rule 37B which should help cases such as this one retain their value as precedents.

More on Court Costs and "Sufficient Reason" For Suing in the BC Supreme Court

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Further to my previous posts on this topic, if a Plaintiff successfully sues in the BC Supreme Court but receives damages below $25,000 they may be deprived of their court ‘costs’ unless they had ‘sufficient reason’ for choosing the Supreme Court over small claims court.
Two judgements were released this week by the BC Supreme Court discussing this area of law.  In this weeks cases (Spencer v. Popham and Spencer v. Horton) the Plaintiff was involved in 2 separate  BC car crashes.  She started separate lawsuits in the BC Supreme Court but settled her cases before they went to trial.  Both claims settled form amounts below $25,000 (the current financial limit of BC’s small claims court).  The Plaintiff and ICBC could not agree on the issue of costs.
ICBC argued that since both cases were in the small claims courts jurisdiction the Plaintiff did not have sufficient reason for suing in the Supreme Court.  Mr. Justice Punnett disagreed and awarded the Plaintiff costs in both claims.  In doing so he provided the following useful and through summary of this area of the law:

[8] Rule 57(10) of the Rules of Court states:

A plaintiff who recovers a sum within the jurisdiction of the Provincial Court under the Small Claims Act is not entitled to costs, other than disbursements, unless the court finds that there was sufficient reason for bringing the proceeding in the Supreme Court and so orders.

[9] This rule encourages persons to bring actions in Small Claims Court when a claim falls within that court’s monetary jurisdiction. It is an example of “proportionality”; the judicial process should match the amount in dispute. However, the court must also respect a party’s “legitimate choice” of forum: Reimann v. Aziz, 2007 BCCA 448, 286 D.L.R. (4th) 330 at para. 35.

[10] The burden is on claimants to evaluate their claims prior to commencement and to justify their decision if they recover less than the Small Claims Court limit, currently $25,000:Reimann at para. 38. If plaintiffs fail to sufficiently investigate and assess their claims prior to commencement, they risk not recovering costs. In a personal injury action this may require plaintiffs to obtain medical records and medical reports, to gather evidence to support claims for loss of earnings and earning capacity, and to assess the evidence in support of the claims being advanced before commencing the action.

[11] However, as noted by Justice Savage in Gradek v. DaimlerChrysler Financial Services Canada Inc, 2010 BCSC 356 at para. 19, R. 57(10) contemplates the possibility that factors other than quantum must be considered:

[19]      The proviso in Rule 57(10) is “unless the court finds that there was sufficient reason for bringing the proceeding in Supreme Court and so orders”. The Rule does not define “sufficient reason”. There is nothing in the Rule that limits the extension of the term “sufficient reason” to matters relating to the quantum of the claim.

[12] Factors that can give rise to “sufficient reason” were set out in Kuehne v. Probstl, 2004 BCSC 865 at para. 22, and accepted in Icecorp International Cargo Express Corp. v. Nicolaus, 2007 BCCA 97, 38 C.P.C. (6th) 26 at para. 27. They include:

i. the legal or factual complexity of the case;

ii. the need for discovery of documents and examinations for discovery;

iii. the need for a judgment enforceable outside of British Columbia;

iv. a bona fide preference for a jury trial; and

v. access to the summary trial procedure available in Supreme Court.

Other factors can be the need for the plaintiff to have legal counsel (Faedo v. Dowell, 2007 BCSC 1985 at para. 36; Ostovic v. Foggin, 2009 BCSC 58 at para. 42; Gradek at para. 43), and the defendant’s denial of liability, causation, and injury or loss and allegations of contributory negligence, pre-existing conditions, previous causes and a failure to mitigate (Ostovic at paras. 39-40; Gradek at para. 35).

[13] Therefore, a plaintiff’s evaluation of his or her claim, can also involve an assessment of these factors. Even if the plaintiff assesses the claim to be within the jurisdiction of the Small Claims Court, the plaintiff can rely on these other reasons to commence the action in Supreme Court: Johannson v. National Car Rental (Canada) Inc., 2009 BCSC 1284 at para. 5.

[14] In my opinion, a plaintiff’s simple desire to retain counsel is not in and of itself a sufficient reason for commencing the action in Supreme Court. Other factors, such as those noted above, determine whether retaining counsel is justified.

[15] In Faedo, the plaintiff was in a low impact collision and suffered a soft tissue injury to her neck and back. Justice Vickers found that the case was not that complex and plaintiff’s counsel could not have considered ICBC’s original dispute of liability a serious threat to recovery. However, Justice Vickers concluded that it was reasonable for the plaintiff to have brought her claim in Supreme Court for two reasons: (1) when the action was commenced, the plaintiff believed she was suffering from the accident and her pleadings included a claim for loss of earning capacity and disruption of the ability to earn income; and (2) ICBC put her credibility seriously in issue when it took the position that she had not suffered from any injury or any significant injury. Justice Vickers continued at para. 36:

[36]      … I observed this plaintiff to be very nervous in court. She had no previous experience in court and in my opinion when she was confronted with a case where the defendant represented by counsel was suggesting that she hadn’t been injured at all and this was a low impact accident in which it was suggested she wouldn’t be injured, that the plaintiff reasonably required counsel to represent her and reasonably started an action in the Supreme Court where she could hope to recover some of the cost of retaining that counsel which was necessary for her to properly put her case to get the compensation I have found her entitled to. Furthermore, an offer to settle such as the plaintiff made in this case puts very little pressure upon a defendant to settle where there is no exposure to costs.

[16] In Ostovic, another case arising out of a low impact accident, Justice Savage noted that because the defendant denied liability, causation and special damages, the plaintiff had to prove these issues in court. Because of this, the plaintiff needed to avail himself of pre-trial discovery, which provided important evidence of the speed of impact, the consequences of impact and concern over the plaintiff’s condition. In addition, Justice Savage found at para. 42:

[42]      There is the additional factor that, as in Faedo and Kanani [v. Misiurna, 2008 BCSC 1274], the Plaintiff faced an institutional defendant which, in the ordinary course, has counsel. To obtain any recovery the Plaintiff is forced to go to court, where he is facing counsel and counsel is reasonably required, but in Provincial Court there is no way of recovering the costs of counsel.

[17] In Gradek, before the issuance of the writ, the defendants’ insurers had informed the plaintiffs that their position was the accident did not result in any compensable injury. In their pleadings, the defendants denied liability and injury or loss and alleged contributory negligence, the existence of a pre-existing injury and previous causes, and a failure to mitigate. There was a broad range of findings possible respecting liability. The plaintiff, Henryk Gradek, was a Polish immigrant who spoke halting English. Justice Savage found at para. 42 that “he would have had extraordinary difficulty presenting a case on his own” and would have been “out-matched” by either a lawyer or an ICBC adjustor. The plaintiff needed counsel to obtain a just result and, therefore, had sufficient reason to begin the action in Supreme Court.

[18] Plaintiffs do not have an ongoing duty to reassess their claims as the matter proceeds: Reimann at para. 44. Thus, the court must assess whether a plaintiff had “sufficient reason” to bring the action in Supreme Court when the plaintiff started the action: Ostovic at para. 35. This analysis is necessarily done with the benefit of hindsight since it only occurs after trial or settlement, but the court must be careful not to use that hindsight in deciding what was reasonable: Faedo at para. 28.

[19] It also must be remembered R. 57(10) “does not involve an exercise of discretion.” Rather, “the court must make a finding that there was sufficient reason for bringing the action in the Supreme Court” (emphasis added): Reimann at para. 13.

In my continued effort to cross reference the current Supreme Court rules with the new Rules of Court that come into force on July 1, 2010 I will note that the Current Rule 57(10) will become Rule 14-1(10) and it reads identical to the current rule so the precedents developed under Rule 57(10) regarding costs should continue to assist litigants under our new rules.

BC Court of Appeal Clarifies Discretionary Costs Awards in Fast Track Trials

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As I’ve previously written, when a person wins in a lawsuit in the BC Supreme Court they are usually entitled to ‘costs‘.
The normal amount of costs a successful litigant is entitled to are set out in a tariff as an appendix to the Rules of Court (appendix B).  However, in fast track trials, the amount of costs a person is entitled to is capped under Rule 66.  A judge has discretion to waive this cap and award a litigant more.  Today, the BC Court of Appeal released reasons for judgement dealing with the extent of that discretion.
In today’s case (Majewska v. Partyka) the Plaintiff was injured in a 2007 BC car crash.  ICBC admitted that the driver was at fault.  The lawsuit focused on the value of the Plaintiff’s claim.  The Plaintiff made a formal offer to settle her case for $50,000.  ICBC made a formal offer for $25,000.  The trial judge ultimately awarded just over $62,000 in damages.
The Court went on to award the Plaintiff double costs under the ‘usual tariff‘.  ICBC argued that while the Court did have discretion to award costs above the capped amount set our in Rule 66(29) the Judge was wrong in awarding them under the ‘usual tarriff’ and should have used the limited amounts set out in Rule 66 as guidance for the increased costs award.  The BC Court of Appeal agreed and set out the following principles:
[29] Thus, Anderson established two principles. First, it confirmed that there is discretion to award costs beyond the limits in R. 66(29) if there are special circumstances. Second, where such an award is justified, it affirmed that costs should be calculated using those limits as reference points, rather than under the usual tariff…

[31] I appreciate that Anderson dealt only with a settlement offer, whereas there were additional special circumstances in this case. The trial had run for three and a half days, and there was an issue of some complexity. However, the approach in Anderson can easily be adapted to calculate costs for extra days of trial by adding a further $1,600 for each day, based on the present figures of $5,000 and $6,600 in R. 66(29). This was the approach used by Gerow J. in Park, where the R. 66 trial had taken three days.

[32] Using the amounts in R. 66(29) as a basis for awarding increased costs because the issues were complex is not as straightforward. I am persuaded, however, that theAnderson approach could be adapted effectively to accomplish this, again by using those amounts as the basis for calculations.

[33] This approach brings desirable consistency and predictability to costs awards following fast track litigation. The varied approaches that have developed under R. 66 have led to uncertainty with respect to both exposure to and recovery of costs under the rule. Having opted into the R. 66 process, fast track litigants should be able to reliably assess their potential costs liability or recovery in making decisions about the conduct of the case….

[37] I would conclude that the discretionary nature of R. 66(29) is circumscribed by the objectives of R. 66: to provide a speedier and less expensive process for relatively short trials. Those objectives are best served by awarding lump sum costs, calculated by reference to the amounts in R. 66(29).

[38] I acknowledge there may be situations that justify a departure from such costs. I anticipate these would be “exceptional” circumstances rather than “special” circumstances, and might include situations deserving of special costs or solicitor client costs, however, such matters must be left for another day.

[39] I would therefore allow the appeal, and calculate costs under R. 66(29) as follows. Under the present limits of $5,000 and $6,600 I take the pre-trial portion of costs to be $3,400, and $1,600 as representative of each day of trial. The plaintiff’s offer to settle was delivered only six days before trial. Thus, she is not entitled to double costs for trial preparation. She is, however, entitled to double costs for three and a half days of trial, calculated at $3,200 per day. Total costs are thus $14,600 ($3,400 plus $11,200) before disbursements and taxes.

Despite winning the appeal, the BCCA ordered that ICBC pay the Plaintiff’s costs of the appeal because this was a ‘test case‘ and but for that reason ICBC would not have proceeded with the appeal.  The Court stated as follows:

[42] In my view, an order that each party bear its own costs would not be appropriate. The amount in issue is not so significant that the parties would have undertaken the appeal of their own accord. Because the defendant’s insurer chose to use it as a test case, the plaintiff was put to the expense of responding to the appeal. The defendant’s late and unsuccessful attempt to raise a second ground of appeal increased that expense, as the plaintiff had to reply to the new ground as well. In Patterson v. Rankel (1998), 166 D.L.R. (4th) 574 (B.C.C.A.), Southin J.A. described the same insurer’s agreement to pay the plaintiff’s costs in a “test case” as “a very proper thing to do”, and ordered costs in those terms. I agree that is the appropriate result in such a case.

I should point out that Rule 66 is being taken off the books as of July 1, 2010 and being replaced with Rule 15.  However, today’s case ought to retain value as a precedent under the new rule because Rule 15-1(15) has language almost identical to Rule 66(29).

No Double Costs for "Walk Away Offer" In Defeated Lawsuit

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Reasons for judgement were released today by the BC Supreme Court considering whether a Defendant should be awarded double costs for successfully defeating a lawsuit where they made a formal settlement offer before trial.
In today’s case (McVeigh v. McWilliams) the Plaintiff sued the Defendant alleging defamation.  Before trial the Defence lawyer made a ‘walk away’ offer under Rule 37B (click here to access my previous posts and recent video discussing formal settlement offers and costs consequences) which was phrased as follows:
Our client will waive costs in exchange for your consent to a dismissal of your claim on a “without costs” basis. Our client 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, in accordance with Rule 37(b) of the Rules of Court.
The Defendant, who was awarded Costs for succeeding in the lawsuit, asked the Court to exercise its discretion under Rule 37B and award double costs.  Mr. Justice Shabbits refused to do so finding that the Plaintiff was entitled to his day in Court and should not be penalized with an order of double costs for failing to beat a walk away offer.  The Court reasoned as follows:

[23] A defendant in every case in which a non-monetary issue is at stake could offer to “settle” on the basis that the plaintiff concede the cause of action, and they could do so as soon as they file the statement of defence. The issue is whether such an “offer” should attract double costs.

[24] I acknowledge that in this case the defendant did offer to waive costs to the date of the offer. But, costs here were never the issue. In my view, the defendant’s offer did not really involve any meaningful element of compromise. In respect of the cause of action, the defendant’s position after delivery of the offer to settle was the same as before delivery. It was as set out in the pleadings.

[25] In my opinion, it was not unreasonable of the plaintiff to refuse the defendant’s offer. He, too, was entitled to have the issue tried.

[26] In my opinion, no order for double costs is warranted. The defendant is entitled to his costs on Scale B except for the costs of this application. The plaintiff has enjoyed substantial success on this application, and he is entitled to his costs of it on Scale B.

I should point out that it is possible for a Defendant to be awarded double costs for beating a settlement offer if the lawsuit is dismissed, however, in cases where the settlement offer was no more than a ‘nuisance’ offer or a ‘walk away’ offer the BC Supreme Court may be reluctant to make such an award.

In my continued efforts to get us all prepared for the New BC Supreme Court Civil Rules I will again point out that Rule 37B will be replaced with Rule 9 under the New Rules. The new rule uses language that is almost identical to Rule 37B which should help cases such as this one retain their value as precedents.

The Debate Goes On – Rule 37B and the Relevance of Insurance

Written by admin on . Posted in BC Supreme Court Costs Cases, Civil Procedure, Uncategorized.


Further to my numerous posts discussing the development of Rule 37B, reasons for judgement were released today demonstrating that this Rule’s application is still being shaped by the BC Supreme Court.
The one factor that has yet to receive judicial agreement is whether the defendant being insured is a factor the Court can consider when exercising its discretion to award costs under the rule.  There are cases going both ways and today’s case shows that the debate goes on.
In today’s case (Wittich v. Bob) the Plaintiff was injured in a car crash.  Her husband was the at fault driver.  She sued for damages.  Before the trial the Defendant (through his insurer ICBC) made a formal offer to settle the case for $40,100.  Later the Defendant withdrew this offer and made a second formal under Rule 37B to settle the case for $65,000.  The Plaintiff rejected this offer, made her own formal offer of $196,000 and proceeded to trial.
At trial the Plaintiff sought damages of $847,000.  The claim was largely unsuccessful with the Court awarding just over $31,000 in damages.  (You can click here to read my summary of the trial judgement).
The Defence then brought a motion to be awarded costs and disbursements.  This application was partially successful with the Defendant being awarded their costs and disbursements from 6 weeks before trial through trial.  Before coming to this decision, however, Madam Justice Bruce was asked to consider whether the fact that the Defendant was insured with ICBC was a factor the court can consider when weighing the financial positions of the parties.  The Court ruled that this indeed is a relevant factor holding as follows:

[23]        Turning to the financial circumstances of the parties, it is clear that, as a married couple, the plaintiff and the defendant have the same economic position.  The authorities are divided as to whether the circumstances of the insurer should be considered as a relevant factor in an order for costs. In the particular circumstances of this case, I find it is appropriate to consider the insurer’s resources in comparison to the plaintiff’s. The defendant Mr. Wittich supported his wife’s claim and testified that her pain and suffering after the accident was considerable and prolonged; however, counsel for the defendant took an entirely different position in argument. Thus it must be inferred that counsel was taking instructions from the insurer and not the litigant.

[24]        The plaintiff is not a wealthy person. She has not worked for a considerable period of time. The defendant has an income of less than $70,000 per year. I thus find that their economic circumstances are far less substantial when compared to that of the insurer. It is also apparent that an award of costs may deprive the plaintiff of the judgment awarded at trial. These are factors in her favour.

Rule 37B has been on the books now for almost two years.  The Court is clearly conflicted about whether the availability of insurance is a relevant factor under the rule.  When the New BC Supreme Court Rules come into force on July 1, 2010 Rule 37B will be replaced with Rule 9.  Rule 9 uses language that is almost identical to Rule 37B so the lack of clarity will likely continue.  In light of the on-going conflicting authorities it will be useful if the BC Court of Appeal addresses this issue.

More on BC Supreme Court Costs – Rule 57(10) and Judgments Below $25,000

Written by admin on . Posted in BC Supreme Court Costs Cases, Uncategorized. 56 Comments on More on BC Supreme Court Costs – Rule 57(10) and Judgments Below $25,000

(Note: The below case was upheld by the BC Court of Appeal.  You can find the BCCA decision here.)
As recently discussed, when advancing an ICBC Claim in Court one of the first choices to make is whether to sue in BC Supreme Court or Small Claims Court.   When a Plaintiff successfully sues in the BC Supreme Court they are usually entitled to “costs” from the Defendant.  Costs are intended to offset some of the expenses of requiring a formal lawsuit to reach a resolution to a claim. The Small Claims Court does not have the ability to award Costs.
One of the exceptions to this general principle of giving successful Supreme Court plaintiffs “Costs” is set out in Rule 57(10) which holds that “A plaintiff who recovers a sum within the jurisdiction of the Provincial Court under the Small Claims Act is not entitled to costs, other than disbursements, unless the court finds that there was sufficient reason for bringing the proceeding in Supreme Court and so orders.“
So if a Plaintiff is awarded under $25,000 (the current limit of the Small Claims Court) in an ICBC or other BC Injury Claim does this mean they will be deprived of Court Costs?  The answer is not necessarily.  Our Supreme Court has held time and time again that a Plaintiff may have sufficient reasons for suing in Supreme Court despite the fact the final outcome may be an award below $25,000 and reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, discussing this.
In today’s case (Gradek v. DaimlerChrysler Financial) the Plaintiff was injured in a BC car crash.  He sued in the BC Supreme Court and was awarded just below $10,000 in total damages (you can click here to read my article summarizing the trial judgement).  The Plaintiff asked for Costs.  The Defendants opposed this arguing that since the value of the case within the Small Claims Courts Monetary Jurisdiction the Plaintiff did not have “sufficient reason” to sue in the Supreme Court.
Mr. Justice Savage rejected this argument and summarized the law relating to “sufficient reason” to sue in the BC Supreme Court as follows:

[18] In my opinion the approach taken by the defendants is too narrow and not supported by an interpretation of the Rule or by the authorities.

[19] The proviso in Rule 57(10) is “unless the court finds that there was sufficient reason for bringing the proceeding in Supreme Court and so orders”.  The Rule does not define “sufficient reason”.  There is nothing in the Rule that limits the extension of the term “sufficient reason” to matters relating to the quantum of the claim.  ..

[27] There are relevant authorities in this court.  In Faedo v. Dowell, 2007 BCSC 1985, a case predating Reimann, Curtis J. held that a variety of factors gave rise to “sufficient reason” within the meaning of Rule 57(10).  The Court referred to the plaintiff’s beliefs about her claim, the defendant’s denial of liability, challenge to the plaintiff’s credibility, the plaintiff’s inexperience and demeanor, the reasonable requirement to have counsel, and the fact that costs of counsel were only recoverable in Supreme Court.

[28] Master Patterson in Garcia v. Bernath, 2003 BCSC 1163, 18 B.C.L.R. (4th) 389 (S.C.), held that a number of factors including whether there were injuries at all, can give rise to sufficient reason.

[29] In Johannson v. National Car Rental (Canada) Inc., 2009 BCSC 1284, Barrow J., referred to Reimann, and noted in obiter dicta that other reasons for proceeding in Supreme Court include those identified in Kuehne.

[30] In Tucker v. Brown, 2008 BCSC 734, Cole J. applied Reimann noting the importance of discovery procedures in determining liability in a “no crash no cash” case.

[31] In Kanani v. Misiurna, 2008 BCSC 1274, Humphries J. considered factors such as a denial of liability in finding “sufficient reason” under the Rule.  To like effect is the decision in Ostovic v. Foggin, 2009 BCSC 58.

[32] In the result, in my view, the term “sufficient reason” within the meaning of the rule encompasses a number of considerations including considerations which do not inform the quantum of the claim.

Mr. Justice Savage went on to award the Plaintiff his trial costs finding that despite the fact that the case could have been tried in Provincial Court given its monetary value the Plaintiff had sufficient reason to sue in the Supreme Court for a variety of reasons including the fact that the examination for discovery evidence was useful at trial and that the Plaintiff would have been “out-matched” if he sued the insured defendant without the assistance of a lawyer in small claims court.

In my continued effort to cross reference the current Supreme Court rules with the new Rules of Court that come into force on July 1, 2010 I will note that the Current Rule 57(10) will become Rule 14-1(10) and it reads identical to the current rule so the precedents developed under Rule 57(10) regarding costs should continue to assist litigants under our new rules.