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Court Declines to Award Plaintiff Double Costs Where Adverse Liability Finding was a “Live Possibility”

Often times when a plaintiff is awarded damages beyond their formal settlement offer the BC Supreme Court awards double costs.  Such an outcome is discretionary and not automatic and occasionally double costs are declined.  Reasons for judgment were published this week by the BC Supreme Court, Chilliwack Registry, with such an outcome.

In this week’s case (Enns v. Corbett) the Plaintiff was injured in a collision and sued for damages.  The Plaintiff was awarded damages approximately $30,000 above their formal settlement offer.  Despite this the Court declined to award double costs noting there was a ‘live possibility‘ of an adverse liability outcome.

In reaching this conclusion Mr. Justice Riley provided the following reasons:

[7]             I do not agree with the plaintiff that the offer ought reasonably to have been accepted as contemplated in Rule 9-1(6)(a). Rather, I agree with the defendant that at the time the offer was made, there was uncertainty as to the strength of the plaintiff’s claim, due in large measure to issues of contributory negligence and potential apportionment of liability. Despite the live issues as to liability, the plaintiff’s offer expressly rested on the premise that the defendant would be found “fully liable” for the collision; it made no allowance for the contingent risk that the plaintiff might be found contributorily negligent, which was a live possibility based on the evidence available to the parties when the offer was made. To quote from the defendant’s submission, the plaintiff’s offer “did not account for the real risk that the plaintiff’s claim might have been dismissed entirely or that liability might be apportioned, based on information available to the parties at the time”. As explained in Owen v. Folster, 2019 BCSC 407 at para. 12, the plaintiff’s offer did not put forward a “genuine compromise or an incentive to settle” in view of the litigation risks, such that the defendant did not act unreasonably in declining to accept it.

[12]         In my view, the most telling feature of this case is the fact that the offer to settle was premised on the plaintiff’s position that the defendant would be found fully liable for the collision, when there were live issues as to apportionment of liability. In these circumstances, it cannot be said that the offer “ought reasonably to have been accepted”. The other factors are less important in this particular case. The judgment obtained at trial was higher than the amount in the offer, but only marginally so as a proportion of the overall amount in issue. And, although the defendant’s insurance coverage placed her at some degree of financial advantage in terms of the decision to proceed to trial, there is no evidence that the defendant or her insurer used their financial strength in an untoward manner. The plaintiff was successful at trial and is therefore entitled to costs of the action at Scale B, but not double costs.

Plaintiff Awarded Costs Despite Jury Awarding Damages Far Less than ICBC Formal Setttlement Offer

Reasons for judgement were published today by the BC Supreme Court, Penticton Registry, dismissing a defence application for costs and awarding a Plaintiff full costs despite receiving a jury award substantially smaller than a pre trial formal settlement offer.

In today’s case (Duarte v. McMillan) the Plaintiff was injured in a 2016 collision that the Defendant accepted fault for.  The matter proceeded to trial by Jury, an election made by ICBC on the Defendants behalf.

Prior to trial the Plaintiff made a formal settlement offer for $175,000.  The Defendant made several formal offers with the highest being $88,000 plus costs.  At trial the jury awarded far less with global damages being assessed at $22,000 being comprised of $7,300 for costs of future care and loss of homemaking capacity and $14,700 for non-pecuniary damages.

ICBC sought to have the Plaintiff pay costs.  The court declined and instead awarded the Plaintiff full costs finding with the evidence available it was reasonable to reject the settlement offer and proceed to trial.  In reaching this decision Madam Justice McDonald provided the following reasons:

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BC Court of Appeal Upholds Costs Awards To Plaintiff To Avoid “Pyrrhic Victory”

In 2017 the BC Supreme Court awarded a litigant injured in a vehicle collision costs despite receiving a jury verdict far less than a pre-trial settlement offer from ICBC.  The court concluded that if the Plaintiff was stripped of costs and ordered to pay ICBC’s costs the result would result in pyrrhic victory inconsistent with the result the jury was looking to achieve.

ICBC appealed arguing they should have been awarded costs.  In reasons released today (Bains v. Antle) the BC Court of Appeal dismissed the appeal and found the trial judge properly exercised their discretion in this case.  The Court provided the following reasons:

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Court Declines to Order Double Costs After Jury Dismisses Injury Claim Based on Liability

Reasons for judgement were published last week by the BC Supreme Court, Vancouver Registry, demonstrating the discretionary nature of double costs awards following the dismissal of a personal injury claim.

In last week’s case (Findlay v. George) the Plaintiff was involved in a significant 2013 collison.  The crash left the defendant motorist dead at the scene.  The Plaintiff  “attempted to assist with the rescue and resuscitation of the defendant at the scene and, in the result, suffers from post-traumatic stress disorder “.

The Plaintiff’s damages were potentially significant with the Court noting “given the commonality of the medical evidence, damages could have reached seven figures.”.

Prior to trial ICBC provided a formal settlement offer of $80,000.  The Plaintiff declined and proceeded to trial where the claim was dismissed based on liability.  ICBC sought double costs.  Mr. Justice Harvey refused to grant these noting costs awards are discretionary and given the potential damages at play and further some evidence where contributory negligence could have been established it was reasonable for the Plaintiff to proceed to trial in the face of this offer.  In declining to award double costs the Court provided the following reasons:

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ICBC Hit With Double Costs For “Unreasonable Refusal” To Settle Injury Claim

Reasons for judgement were published today by the BC Supreme Court, Kelowna Registry, ordering ICBC to pay double costs after their ‘unreasonable refusal’ to accept a sensible settlement offer in an injury claim.

In today’s case (Stark v. Bartier) the Plaintiff was injured in a collision and sued for damages.  Prior to trial the Plaintiff sought to settle her claim for $70,000 plus costs.  ICBC refused to accept.  At trial ICBC was ordered to pay almost 80% more with a final judgement of $126,430.

The Plaintiff applied for an order of double costs

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Court Finds "After the Event" Insurance a Factor To Consider When Awarding Post Trial Costs

In what, to my knowledge, is the first BC injury case commenting on the weight a court should place on “After the Event” insurance when awarding costs post trial, reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, addressing this.
In the recent case (Clubine v. Paniagua) the Plaintiff was injured in a crash and sued for damages.  Prior to trial the Defendant offered to resolve the claim for a total of $94,848.32 plus costs and disbursements.  The Plaintiff rejected this offer and proceeded to trial where he was awarded a total of $77,224.32 in damages.  The Defendant asked for costs of the trial arguing their offer should have been accepted.
The Plaintiff had ATE insurance which covers some of these adverse costs consequences.   The Court was asked to take this factor into account in stripping the plaintiff post-offer costs and making the Plaintiff pay the Defendant’s trial costs.  In finding this was an appropriate factor to consider Madam Justice Watchuk provided the following reasons:

[27]         On the costs application it was disclosed that the plaintiff purchased adverse cost insurance known as “After-the-Event” (“ATE”) insurance prior to trial.  In submissions the plaintiff explained that the ATE insurance would cover the defendant’s disbursements and costs from the date of the offer if costs were awarded against the plaintiff, and would also pay for the plaintiff’s disbursements incurred but not awarded from the date of the offer.  It will not pay for the plaintiff’s costs following the date of the offer. 

[28]         The defendant submits that the ATE insurance effectively undermines the intent of the offer to settle rule.  It allows a plaintiff to avoid the punitive costs consequences of the rule, ignore reasonable offers to settle, and with impunity take their chance at trial.  The winnowing function of the costs rules is obviated by ATE insurance; doubtful cases can proceed through litigation without risk of adverse costs consequences.  I conclude in this case that this insurance had such an effect. 

[29]         The ATE insurance in this case strongly weighs in favour of the defendant’s costs application. ..

[30]         The defendant made reasonable efforts to settle this matter.  The plaintiff’s failure to accept the reasonable offer to settle should have costs consequences.  The ATE insurance held by the plaintiff is a factor that further weighs against costs following the event in these circumstances. 

[31]         The offer was open to the eve of trial, July 22, 2016.  In these circumstances the plaintiff is entitled to only his pre-trial costs of $6,500 plus disbursements.  The defendant’s application is granted and she is entitled to the costs and disbursements of the trial. 

"Marginal Difference" Between Trial Result and ICBC Settlement Offer Results in Full Costs to Plaintiff

Reasons for judgement were published today by the BC Supreme Court, Victoria Registry, awarding a Plaintiff full trial costs after the Plaintiff failed to beat an ICBC settlement offer by a “marginal difference“.
In today’s case (Goguen v. Maddalena) the Plaintiff was injured in a collision the Defendant accepted fault for.  The Plaintiff proceeded to trial where he was awarded total damages of $174,360.84.
Prior to trial ICBC made a formal offer to settle for $175,000.  The Defendant argued that the Plaintiff should be deprived of some of his post offer costs for failing to beat the settlement attempt.  In finding that a “marginal difference” does not warrant such an outcome Madam Justice Forth provided the following reasons:

[39]         The plaintiff submits that the Defendant’s Offer was greater than the judgment amount by only $639.16, or approximately 0.5%. He argues that this marginal difference should afford little weight. In support, the plaintiff cites Saopaseuth v. Phavongkham, 2015 BCSC 45 at para. 74, in which Bernard J. noted that an award 2% greater than an offer to settle “suggests that little weight should be given to this factor”. Furthermore, in Zhao v. Yu, 2015 BCSC 2342 at para. 11, Baker J. held that an offer that exceeded an award by $1,800 was “of little significance in arriving at a decision about costs”.

[40]         The defendant submits that the Defendant’s Offer was only with respect to the plaintiff’s tort claim and that acceptance of the offer would have allowed the plaintiff to collect Part 7 ICBC benefits. Therefore, the Defendant’s Offer exceeds the trial award by a larger margin that what appears on its face.

[41]         The plaintiff, in reply, submits that he understood that any settlement offers made by the defendant were full settlements of both the tort claim and Part 7 claims against ICBC, and that at no time did defence counsel convey that Part 7 benefits would still be available in the event that the Defendant’s Offer was accepted.

[42]         With respect to Part 7 benefits, I note the first page of the Defendant’s Offer reads in part:

The Settlement Payment:

(a)     is offered after taking into account Part 7 benefits paid or payable, pursuant to section 25 of the Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231 (in respect of policies in force before June 1, 2007) and/or pursuant to section 83 of the Insurance (Vehicle) Act, R.S.B.C. 1996, c. 231 (in respect of policies in force on or after June 1, 2007);

[43]         Neither counsel have provided submissions on the implications of this settlement term or the quantum of Part 7 benefits that would have likely been available to the plaintiff. As a result, it would be speculative of me to attach significant weight to the submissions on these points.

[44]         Considering the marginal difference between the Defendant’s Offer and the ultimate award, this factor is of little significance in my determination…

[52]         Taken together, the factors pursuant to subrule 9-1(6) weigh in favor of the plaintiff. As a result, I exercise my discretion to award the plaintiff costs pursuant to R 9-1(5)(c). The plaintiff is entitled to his costs at Scale B.

BC Supreme Court – Double Costs Does Not Mean Double Disbursements

Reasons for judgement were published today by the BC Supreme Court, Vernon Registry, confirming that an order for double costs does not also mean a party is entitled to double disbursements.
In today’s case (Lafond v. Mandair) the Plaintiff was injured in a collision and sued for damages.  Prior to trial the Plaintiff made a formal settlement offer of $300,000.  At trial the Plaintiff beat this quantum being awarded just over $343,000.
The Plaintiff sought double costs and disbursements.  The Defendant agreed double costs were in order but argued that double disbursements were not recoverable.  The Court agreed and in doing so provided the following succinct reasons:

[14]         Double costs may be awarded for some or all steps taken after delivery of the offer to settle. A step in the proceeding is a formal step that moves the action forward: Canadian National Railway Company v. Chiu, 2014 BCSC 75 at para. 7.

[15]         Incurring a disbursement is not a formal step as contemplated by the Civil Rules.

[16]          I, therefore, conclude that under Rule 9-1(5)(b), double disbursements are not to be awarded as part of double costs. Thus, a successful offer to settle can be rewarded with an entitlement to double costs for tariff items, together with actual and reasonable disbursements.

Court Denies Defendant Costs to Prevent "Pyrrhic Victory" for Plaintiff

Reasons for judgement were released today demonstrating the Court’s discretion for costs following trial where formal settlement offers were exchanged.
In today’s case (Bains v. Antle) the Plaintiff was injured in a collision and sued for damages.  Prior to trial the Defendant presented a formal settlement offer of $185,000.  The Court noted that “some of the plaintiff’s initial negotiating positions were clearly inflated” but ultimately it was reasonable for the Plaintiff to refuse the Defendant’s offer and proceed to trial in the face of medical evidence supporting her alleged claim of chronic pain and related disability.
The decision proved costly with a jury awarding the Plaintiff damages of $37,800.  The Defendant asked to be awarded post offer costs and to strip the Plaintiff of her post offer costs.  The Court refused noting the Plaintiff is of modest means and having her pay Defendant costs would reduce the verdict to a Pyrric victory.  In awarding the Plaintiff costs Madam Justice Power provided the following reasons:

[36]         It is my view that all of the financial evidence at trial supports the fact that the plaintiff was a person of modest means.  Having already concluded that the settlement offer was not one which ought to have reasonably been accepted, it is evident that an order requiring the plaintiff to either pay the well-funded defendants’ costs, or in the alternative denying the plaintiff her costs, from September 20, 2016 onwards, would result in a pyrrhic victory and could have the effect of discouraging plaintiffs from pursuing valid claims.

[37]         As a result, although not determinative, the relative financial circumstances of the plaintiff and the defendant insurer are a consideration that I have taken into account.

[38]         I am not persuaded that in these circumstances the court should exercise the discretion afforded to it under Rule 9-1(4) and (5).  Having considered all of the relevant factors, I find that the plaintiff is entitled to her costs at Scale B and disbursements, including the cost of this application.  The defendants’ application is dismissed.

Plaintiff Ordered to Pay Double Costs After Having Injury Claim Dismissed

Reasons for judgement were released today by the BC Supreme Court, New Westminster Registry, ordering a Plaintiff to pay double costs after the dismissal of an injury claim.
In today’s case (Ross v. Andrews) the Plaintiff was involved in a 2011 collision, alleged injury and sued for damages.  Prior to trial the Plaintiff declined two formal settlement offers, the first for $41,000 the second for $75,000.
After 15 days of trial “the jury deliberated and determined that the plaintiff had not been injured in the motor vehicle accident”.
Under the loser-pays BC Supreme Court rules the Plaintiff was ordered to pay the Defendant’s costs and double costs from the time of the second offer onwards.  After a 15 day jury trial it is a safe bet that the costs consequences would be in the tens of thousands of dollars.  In finding double costs appropriate Mr. Justice Ball provided the following reasons:

20]         The evidence aforesaid created significant areas where the credibility of the plaintiff was subject to negative findings by a jury. When those areas are added together the plaintiff ought to have actively considered any offer which offered a positive return without the risks of a trial.

[21]         Based on a review of the evidence at trial, described in part above, and the cases cited, as well as a review of the submissions of counsel, I find that the offer to settle in the amount of $75,000 ought reasonably to have been accepted by the plaintiff having given consideration to the foreseeable credibility problems and the negative verdict of the jury. The offers to settle both included positive returns whereas at trial the plaintiff’s action was dismissed. The relative financial circumstances of the parties do not preclude an order for double costs in this situation. As a result, applying Rule 9-1 of the Supreme Court Rules, the defendants are entitled to the costs of this action generally and double costs of this action commencing on May 26, 2016. This date is seven days after the second offer to settle was delivered to the plaintiff; a reasonable period of time for the plaintiff to consider the offer. Double costs are awarded from May 26, 2016 until the end of the trial and will include the costs of the application to fix costs. The defendants are also entitled to disbursements but not doubled.

[22]         If the parties are unable to agree on the quantum of costs and disbursements, there shall be a reference to the registrar to assess costs pursuant to Rule 14-1(4) of the Supreme Court Rules.