Double Costs Denied Following Modest Besting of Formal Settlement Offer

Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, denying a Plaintiff double costs after modestly beating a pre-trial formal settlement offer.
In today’s case (Barnes v. Lima) the Plaintiff was injured in a collision and sued for damages.  The morning before trial the Plaintiff tabled a $60,000 formal settlement offer.  ICBC rejected this offer and proceeded to trial where damages just over $67,000 were assessed.  The Plaintiff applied for double costs although the Court did not award these finding it was reasonable not to accept the last minute offer.  In reaching this decision Mr. Justice Weatherill provided the following reasons:
[2]             The action arose from injuries sustained by the plaintiff in a motor vehicle accident. It was commenced on September 18, 2012. It was a fast track action commenced under Rule 15-1 of the Supreme Court Civil Rules, B.C. Reg. 168/2009 (the “Rules”). The trial was heard on June 24 to 26, 2014. It lasted 3 days. My Reasons for Judgment were pronounced on July 11, 2014, indexed as 2014 BCSC 1282. The plaintiff was awarded $67,214.19.
[3]             On June 23, 2014, the morning before commencement of the trial, the plaintiff communicated a formal offer to settle the claim for $60,000 plus reasonable disbursements. The offer was stated to be open for acceptance until that same afternoon at 4 p.m. The defendant did not respond to that offer, although it had responded to earlier settlement offers from the plaintiff including by making his own formal offer to settle for $39,651.69 plus funding for 12 active rehabilitation sessions…
[9]             I have considered how the offer compares to the amount ultimately awarded after trial. The award at trial was only $7,214.19 more than the plaintiff’s offer. As matters transpired, it turned out to have been a reasonable offer, although it was a short-fuse offer made on the eve of trial. It should have been made weeks earlier. Be that as it may, it was straight forward and contained no ambiguities. Counsel for the defendant candidly acknowledged that his client had sufficient time before the trial in which to consider it. However, the fact that the award at trial was greater than the offer is not determinative: Ward v. Klaus, 2012 BCSC 99 at para. 46. The reasonableness of a decision not to accept an offer to settle must be assessed not by reference to the award that was ultimately made but rather the circumstances existing when the offer was open for acceptance: Ward, at para. 36.
[10]         On the eve of the trial, the defendant had a legitimate defence to the plaintiff’s claim, particularly his claim for loss of capacity which in his earlier communications to the defendant the plaintiff had indicated was significant. The plaintiff did not break his settlement offer into its components and provided the defendant with no ability to assess how much of it was to compensate the plaintiff for his loss of capacity claim. At the time the offer was communicated, there was a reasonable possibility that the plaintiff would not recover anything for that claim, which ultimately proved to be the case. It was reasonable for the defendant to wish to test the plaintiff’s position that his inability to work overtime at Carter Motors was due to the accident and not to other factors such as his marriage, particularly in the absence of supporting documentation.
[11]         Moreover, most of the plaintiff’s injuries were soft-tissue in nature. He had a pre-existing right shoulder injury. There were live issues regarding whether the plaintiff’s T-4 vertebra fracture had healed and, if so, when, as well as the plaintiff’s credibility relating to the extent that his injuries had affected his life. Parties should not be unduly deterred from bringing meritorious, but uncertain, defences because they fear a punishing costs order: Currie v. McKinnon, 2012 BCSC 1165 at para. 20.
[12]         In addition, the plaintiff provided the defendant with several photographs of the plaintiff’s carpentry skill but gave no explanation for how he intended to rely upon those photographs until after his settlement offer had expired.
[13]         The court has a broad discretion when determining the issue of costs: Ward at para. 33.
[14]         In my view, having considered all of the foregoing circumstances, the offer was not one that the defendant ought reasonably to have accepted.
 

"Walk Away" Offer Fails to Trigger Double Costs in Liability Trial

Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, addressing a defence application for double costs after a Plaintiff’s personal injury claim was dismissed.
In this week’s case (Miller v. Emil Anderson Co. Ltd.) the Plaintiff was involved in a motor vehicle collision alleging that an unidentified vehicle contributed to the incident.  Prior to trial the Defendant made a formal settlement offer of $1 which “expressed the defendants’ belief that the Court would conclude that Mr. Miller had suffered no compensable injury.”
Ultimately the Plaintiff’s claim was rejected with the Court concluding that “memory and perception of the key events preceding his loss of control of his vehicle were not reliable.”.  Despite this the Court found the walk-away offer was not reasonable as the plaintiff had a sincere belief in his perception of the event and that “ had he accepted the defendants’ offer, he would have been giving up, without adjudication, a claim that he believed had merit“.
In dismissing the Defendant’s request for double costs Madam Justice Ballance provided the following reasons:
[15]                      In the present case, Mr. Miller proceeded upon his hypothesis as to how the accident occurred, including the purported role of another vehicle.  He tendered no expert evidence in the field of engineering and/or accident reconstruction in support of his theory.  In weighing the evidence, I concluded that Mr. Miller had not proved his case on a balance of probabilities.  In reaching that conclusion, I found that his memory and perception of the key events preceding his loss of control of his vehicle were not reliable.
[16]                      Despite the frailties in Mr. Miller’s testimony and his faulty recall of events, I did not doubt that Mr. Miller’s perception of events, including his theory as to how the accident occurred, was sincere.  He did not attempt to mislead or deceive the Court.  Had he accepted the defendants’ offer, he would have been giving up, without adjudication, a claim that he believed had merit.  A belief that was neither groundless nor frivolous…
[18]                      The Offer is to be considered in the context of a serious liability issue where neither side called expert engineering or accident reconstruction evidence in relation to the pivotal issue of what had caused the accident.  Mr. Miller was aware that he and the defendants held conflicting versions of the material events and that there was a risk that, if the Court found that the evidence did not support his case, his action would be dismissed.  However, it does not follow that the nominal Offer ought reasonably to have been accepted by Mr. Miller at any time.  As was the case in Stuart, the Offer provided nothing to Mr. Miller in relation to the claim itself and proffered little meaningful benefit to him.
[19]                      The evidence indicates that Mr. Miller was in his early 70s at the time of the accident and was retired or semi-retired from prospecting.  Beyond that, there was no cogent evidence of his financial circumstances and I am therefore unable to agree with his counsel’s submission that it was clear he is impecunious.
[20]                      Although Mr. Miller ultimately failed to make out his case on a balance of probabilities, I would not characterize his refusal to accept the Offer as unreasonable.
[21]                      Weighing the pertinent factors and giving the most weight to the fact that I am unable to say that it was unreasonable for Mr. Miller to refuse the Offer, I consider it a fair exercise of my discretion to decline to order double costs.  An award of costs at Scale B in favour of the defendants is appropriate in this case and will likely be of significant consequence to Mr. Miller.
[22]                      Accordingly, the defendants’ application for double costs is dismissed.  They will have their costs at Scale B.

Formal Offer on Eve of Trial Not "Too Late" To Trigger Costs Consequences

Reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, discussing the effects of a formal settlement offer made on the eve of trial.
In last week’s case (J.D. v. Chandra) the Plaintiff was injured in two motor vehicle collisions.  At trial she was awarded just over $500,000 in damages.  On the last business day before trial the Plaintiff made a formal offer to settle for $200,000.  The Plaintiff sought double costs for the trial arguing the offer should have been accepted.  The Defendant argued the offer was made too late in the process to trigger such consequences.  In rejecting this position Madam Justice Griffin provided the following reasons:
[16]         One of the defendants’ arguments is that the offer was delivered too close to the start of trial.  The offer was delivered at the end of the day on Friday, January 31, 2014, and counsel for the defendants submits that he did not see it until the next day, Saturday, February 1, 2014.  The trial was set to and did commence the following Monday, February 3, 2014.
[17]         The shortness of time to consider the offer does give me pause.  However, counsel for the plaintiff has pointed out case authorities where ICBC has taken the position that offers it has delivered to plaintiffs on the eve of trial ought to be considered by the court in depriving the plaintiff of costs.  These arguments have been accepted in some cases, for example, see Bevacqua v. Yaworski, 2013 BCSC 29.
[18]         As noted by Mr. Justice Voith in Brewster v. Li, 2014 BCSC 463, there is currently no requirement in the Rules that an offer be made within a specific time from the start of trial.  The question of what is a reasonable time to consider an offer is “largely driven and governed by context” (para. 26).
[19]         Here, the context was that counsel for the defendants had delivered an offer to settle on January 21, 2014; the parties had attended a Judicial Settlement Conference on January 29, 2014, and the defendants had delivered an additional offer to settle on January 30, 2014.  This context suggests that the defendants were in a position where they were well able to analyze the risks of going to trial and the relative merits of each side’s position.
[20]         There was nothing complicated about the offers to settle which required lengthy analysis.  The parties were just exchanging dollar amounts.  There was no revealing new analysis of the issues or last minute disclosure of material information.
[21]         The plaintiff’s form of offer to settle adopted a form similar to that of the defendants.
[22]         The defendants were represented by experienced counsel for ICBC.  I find that the defendants were in a good position to be able to analyze and respond to the offer within hours, if not minutes.  I find that the defendants had sufficient time to assess the reasonableness of the plaintiff’s offer to settle.
 

Summary Trials Are Not Trials For the Purpose of Discontinuing Lawsuits

Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, addressing whether a Plaintiff can discontinue a lawsuit when a matter is set for summary trial.
In today’s case (Binary Environments Ltd v. Batyka) the Plaintiff brought a lawsuit which was set for a summary trial following a case planning conference.  Before the summary trial took place the Plaintiff unilaterally discontinued the lawsuit relying on Rule 9-8(1) which reads “At any time before a notice of trial is filed in an action, a plaintiff may discontinue it in whole or in part against a defendant by filing a notice of discontinuance in Form 36 and serving a filed copy of the notice of discontinuance on all parties of record.”.
The Defendant brought a motion seeking to set aside the discontinuance arguing “the Plaintiff cannot escape by the side door” on the cusp of summary trial.
Mr. Justice Ball dismissed the motion finding the Plaintiff was within their rights in discontinuing finding that a summary trial is not a notice of trial.  In reaching this conclusion the Court provided the following reasons:
[25]         Additionally, setting aside the notice of discontinuance would also be contrary to Rule 9-8(1) as setting a matter for summary trial is not the same as setting a matter for a full trial: Strata Plan No. 36 v. Wilson, [1998] B.C.J. No. 308 (S.C.) at para. 12. A summary trial is a distinct mechanism with its own procedures and safeguards: Inspiration Mgmt. Ltd. v. McDermid St. Lawrence Ltd.[1989] B.C.J. No. 1003 (C.A.).
[26]         I therefore decline to set aside the plaintiff’s notice of discontinuance and dismiss that application.
The Court did, however, order that the discontinuance be with prejudice should the Plaintiff ever start similar litigation.  In exercising its discretion under Rule 9-8(8) the Court reasoned as follows:
[23]         Rule 9-8(8) provides:
Unless the court otherwise orders, the discontinuance of an action in whole or in part is not a defence to a subsequent proceeding for the same or substantially the same cause of action…
[31]         The final matter which must be decided here is whether the notice of discontinuance filed by the plaintiff be order to be a defence to any subsequent proceeding for the same or substantially the same cause of action. From the review conducted by counsel for defendant of the affidavits prepared support of the summary trial application taken together with the admission by counsel for the plaintiff that he was instructed to call no evidence in the event this matter did come forward for trial, the only rational conclusion can be drawn is that this matter must in fairness finally come to an end. I therefore pursuant to Rule 9-8(8) that discontinuance of action is a defence may subsequent proceeding or the same or substantially the same cause of action.
 

Defendant Fails "To Recognize The 'Capital Asset” Approach"; Ordered To Pay Double Costs

Update August 5, 2015 – The below damages for Diminished Earning Capacity were overturned by the Court of Appeal and a new trial was ordered on the issue.
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Reasons for judgement were released today by the BC Supreme Court, Penticton Registry, ordering a Defendant to pay double costs for refusing to accept a bested pre-trial formal settlement offer.  In reaching this result the Court was critical in the Defendant’s failure to appreciate the ‘capital asset’ approach in assessing diminished earning capacity awards.
In this week’s case (Ostrikoff v. Oliveira) the Plaintiff was injured in a 2009 collision.  Prior to trial the parties exchanged a variety of formal settlement offers with the Plaintiff’s last offer coming in at $325,000 and the Defendant’s last offer being $100,000.  The matter proceeded to trial where damages of over $550,000 were assessed.  The Plaintiff was awarded post offer double costs and in finding the Defendant should have accepted the Plaintiff’s offer the Court provided the following comments:
[11]         The plaintiff, on the other hand, marshalled a combination of both expert and lay evidence.  The essence of the plaintiff’s case was that the plaintiff was involved in unique and highly skilled work which had a significant physical component and that the plaintiff’s chronic pain and physical impairments threatened both his business and his sole means of livelihood.  The uncontradicted expert evidence was that the plaintiff was not a suitable candidate for retraining. 
[12]         All of this was known to the defendant well before the trial began.  Expert reports had been delivered from orthopaedic surgeons, treating physicians, a functional capacity evaluator, a vocational consultant, a cost of care consultant, and an economist (regarding future loss multipliers).  No rebuttal reports were prepared by the defendants and much of the evidence was uncontradicted at trial.
[13]         Plaintiff’s counsel provided the defendant with a detailed rationale for the quantum of the first settlement offer in the amount of $325,000 made on March 8, 2013.  The nature and structure of the claim became obvious at that point, if it had not already been obvious beforehand.  Service of the plaintiff’s expert reports would have alerted the defendant to the possibility of a very significant claim being presented and possibly succeeding at trial. 
[14]         The only submission made by the defendant in defence of its refusal to accept the plaintiff’s settlement offer is that there was an absence of any “documented pecuniary loss” and of any expert or other reliable evidence supporting any pecuniary loss, whether past or future.  The submission, and indeed the defence’s entire approach to both the case and the settlement offer, fails to recognize the “capital asset” approach to assessment of damages for both past and future earning capacity in circumstances where the financial loss is not easily measurable. 
[15]         In my opinion, the February 17, 2014 settlement offer made by the plaintiff was reasonable and one that ought reasonably to have been accepted by the defendant before the commencement of trial.  A careful assessment of the strength of the plaintiff’s case on the eve of trial, having regard to the expert reports and the proposed lay testimony, as well as the principles of damages assessment in chronic pain cases involving potentially significant loss of capacity would have, and should have, resulted in a conclusion that a recovery at trial of sums in excess of the offer was a realistic prospect.  Instead, relying almost exclusively on tactics limited to cross-examination and putting the plaintiff to strict proof of his case, the defendant chose to proceed to trial to see what might happen.  Defendants are free to litigate the case in such fashion as they consider appropriate.  But as stated in Hartshorne, above, “[l]itigants are to be reminded that costs rules are in place to encourage the early settlement of disputes by rewarding the party who makes a reasonable settlement offer and penalizing the party who declines to accept such an offer”.
[16]         For these reasons, I exercise my discretion to award party and party costs to the plaintiff under Scale B up to February 17, 2014, and double that scale for all steps taken in the proceeding thereafter.
 

Excessive Delay Strips Defendant of Double Costs Entitlement

In what I believe is the first case addressing this factor, reasons for judgment were released today by the BC Supreme Court, Kelowna Registry, looking to the timeliness of  a costs application as a factor in deciding costs consequences following a trial with a formal settlement offer in place.
In this week’s case (Bay v. Pasieka) the Plaintiff was involved in a collision and sued the Defendant for damages.  The case had “frailties” and prior to trial the Defendant made a nominal formal settlement offer of $1.  The Plaintiff rejected this offer and proceeded to trial.  A jury dismissed the claim.  The Defendant sought double costs and Mr. Justice Butler would have awarded these but did not due to excessive delay in bringing the Defendant’s application.  In reaching this conclusion the Court provided the following reasons:
 [1]             On January 27, 2010, following a two-day trial, the action of the plaintiff, Laurie-Ann Bay, against the defendant, Todd Pasieka, was dismissed. I ordered that the issue of costs be adjourned with liberty to the parties to apply to the court if an agreement could not be reached. Three-and-a-half years after the trial, the defendant now applies for costs. The defendant seeks costs at Scale B and double costs from November 14, 2006, the date an offer to settle was made, to the present. The plaintiff says that each party should bear their own costs…
[30]         While some delay is understandable, the delay in this case far exceeded a reasonable limit. Excessive delay is, of course, contrary to the object of the Rules as set out in Rule 1-3(1): to secure “the just, speedy, and inexpensive determination of every proceeding on its merits.” By waiting so long to deal with the issue of costs, the defendant undoubtedly increased the cost of dealing with the issue for both parties and delayed the final resolution by years. It would be wrong to accept the delay without imposing any consequence on the defendant. It is in the interests of the court and of the parties to resolve disputes as soon as they arise to promote efficient use of court time. The inordinate delay in bringing this application is not acceptable.
[31]         In Xerox, Finch J. found that a party alleging prejudice has the evidentiary burden of showing that prejudice. While the evidence presented does not establish significant prejudice, the plaintiff has established that the defendant’s delay in pursuing a costs award caused her and her counsel difficulty in responding to the application in as fulsome a manner as she would have been able to had the defendant sought costs soon after trial. Similarly, it is much more difficult for the court to consider the costs claim so long after the trial has concluded.
[32]         I find that the defendant has not provided a suitable reason for the inordinate delay in bringing this application. The plaintiff has been prejudiced as a result of this delay and the court has been inconvenienced.
[33]         Without the delay in the application, I would have found that the defendant was entitled to double costs from the date of Mr. Pasieka’s examination for discovery. The plaintiff should have known from that time forward her claim was weak and should have accepted the offer. However, given the inordinate delay, I decline to make that order. Instead, I order that the defendant is entitled to costs at Scale B throughout.
 

A Balanced Costs Award Following Jury Trial

In an illustration that not all trial ‘losses’ trigger catastrophic costs consequences, reasons for judgement were released today by the BC Supreme Court, New Westminster Registry, ordering balanced costs consequences.
In this week’s case (Desharnais v. Parkhurst) the Plaintiff was involved in two vehicle collisions.   Prior to trial the Defendants provided two formal offers, the first at $50,000 the second at $75,000.  The Plaintiff, who was seeking in excess of $1 million rejected both offers and proeeded to trial.  Following a thirteen day jury trial the Plaintiff’s damages were ultimately assessed at $30,100.
Both parties had medical evidence to justify their respective positions, however, the Court noted, some of the opinions of the Plaintiff’s experts were “highly suspect”.
The Defendants sought substantial costs having bested their formal settlement offers. The Court noted a more appropriate result would be to award the Plaintiff costs up to the date of the second formal offer and to have the parties bear their own costs thereafter.  While such an order still has significant financial consequences for the Plaintiff it is far less sever than ordering payment of the Defendant’s costs. In reaching this decision Mr.Justice Saunders provided the following reasons:
[42]         On the whole, I do not consider either the First or the Second Offer as having reflected, objectively speaking, a genuine attempt at compromise. I find them to hae been more reflective of what the Applicants could reasonably have hoped to achieve if all or substantially all of the issues were resolved in their favour. I am not dissuaded from taking this view by the fact that the jury awarded even a lesser amount; I do not think it is unfair to counsel or to the jury for me to say that the jury’s decision was considerably less than what reasonably prudent counsel would have regarded as a “win” for the defence. I cannot find that either offer ought reasonably to have been accepted by the plaintiff.
[43]         As Goepel J. stated in Ward, that is the beginning, not the end of the analysis. The most basic principle underpinning the Rules relating to costs is that costs of a proceeding are to be awarded to the successful party (R. 14-1(9)). This expectation is intended to promote sensible conduct throughout court proceeding; it exists notwithstanding the broad judicial discretion to depart from the principle, which is generously built into the Rules.
[44]         In this case, the jury found that the plaintiff had successfully proven some damage. But for the offers to settle, he would be entitled to his costs. Having regard to the factors set out in Rule 9-1(6), including giving some weight to the plaintiff’s financial circumstances, I do not find that the offers were so substantial that the Applicants ought to be entitled to any indemnification against their own costs. The plaintiff’s position was not completely lacking in merit. It was not frivolous. However, the fact that the settlement offers exceeded the judgment amount cannot be ignored. The Applicants were forced to incur the expense of a trial which they were willing to avoid by paying the plaintiff a not insubstantial sum, a sum which ended up being considerably greater than the damages the plaintiff was judged to be entitled to. It would be unfair to require the Applicants to indemnify the plaintiff for the costs of advancing a claim that was ultimately judged to be greatly overvalued.
[45]         I find that the plaintiff is entitled to his costs up to the date of delivery of the Second Offer. The parties will bear their own costs thereafter.
 
 

The Contractual Nature of Accepted Formal Settlement Offers

As previously discussed, when a formal settlement offer dealing with costs consequences is accepted the BC Supreme Court had no discretion to make a different order with respect to costs.  Reasons for judgement were released this week confirming this principle.
In this week’s case (Tomas v. Mackie) the Defendant made a formal settlement offer $77,400.   The offer included the usual term that, if accepted, the Plaintiff would be entitled to reasonable costs and disbursements up to the date of the offer and the Defendant would be entitled to their costs and disbursements from that time onward.
The Plaintiff accepted the offer 13 days after it was derived.  During this period further costs were incurred.  The Plaintiff argued that the Defendant should be responsible for these as the Plaintiff should have the benefit of a reasonable period of time to consider the offer.  District Registrar Cameron was sympathetic to this argument but ultimately disagreed noting there is no judicial discretion to deviate from the terms of the accepted formal offer.  In reaching this conclusion the Court provided the following reasons:
[9]             Mr. Loewen submitted that the acceptance of the settlement offer constituted a binding agreement and as a result the court has no discretion to vary the terms of that agreement under Rule 9-1 or 14-1 of theSupreme Court Civil Rules.
[10]         Mr. Loewen referred to a number of authorities in support of his argument that clearly were not before Registrar Sainty…
[14]         Applying these authorities, it is clear that I do not have the discretion to vary the terms of the settlement agreement made by the parties and they should obtain a date from the Registry for the assessment of both the Plaintiff’s and the Defendants’ costs pursuant to Rule 14-1 of the Supreme Court Civil Rules.
 

"All-Inclusive" Formal Settlement Offers Can Trigger Costs Consqeunces

Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, finding that an “all inclusive” formal settlement offer is capable of triggering costs consequences.
In today’s case (Wettlaufer v. Air Transat A.T. Inc.) the Plaintiff sued for damages after an “aircraft touched down and then braked, an unsecured food cart struck, with force,(struck) the back of the plaintiff’s seat.”.   Prior to trial the Defendant made an offer, inclusive of costs and disbursements, of $250,000.  The Plaintiff rejected this offer, proceeded to trial and sought damages of over $1 million.  Much of the Plaintiff’s claimed damages were rejected with an award of approximately $110,000.
The Plaintiff argued the all inclusive offer should not trigger costs consequences.  Mr. Justice Funt disagreed finding there is no prohibition to formal offers which have costs and disbursements built into them.  In reaching this decision the Court provided the following reasons:
[18]         The present Rules of Court provide greater discretion to the Court and avoid the formulaic approach reflected in the older rules set forth above.  Justice Masuhara in Dodge v. Shaw Cablesystems, 2009 BCSC 1765, described the rationale for the rejection of all-inclusive offers under Rule 37 (the old rule in Helm):
[22]      The old Rules provided a complete code which determined the costs consequences of an offer to settle:  Cridge v. Harper Grey Easton, 2005 BCCA 33 at para. 20, 37 B.C.L.R. (4th) 62.  Under the old Rule 37(24)(a), if the defendant made a monetary offer to settle which the plaintiff did not accept, and the plaintiff obtained a judgment equal to or less than the settlement amount, the defendant was entitled to costs from the date the offer was delivered.  With such rigid cost consequences from which the judge had no discretion to depart, the rationale for the rule against “all-in” offers in Helm was engaged.  Where the judge was unable to discern what part of the settlement offer was for costs and what part was for discharge of the action, the judge could not precisely evaluate whether or not the plaintiff obtained judgment more favourable than the settlement offer, leading to potentially drastic consequences.
[Footnote omitted.]
[19]         In his October 18, 2012 letter, defendant’s counsel, Mr. Dery, rejected the plaintiff’s offer to settle for $996,025 plus taxable costs and countered with the $100,000 all-inclusive offer.  The plaintiff did not provide a bill of costs and disbursements.
[20]         Absent a bill of costs, the defendant’s further all-inclusive offer of $250,000 is understandable.  Most litigants seeking to resolve a dispute prefer finality.
[21]         With Helm decided on the significantly different rules, the Court is not bound by the rule in Helm that all-inclusive offers cannot be considered.  The Court’s consideration of the $250,000 all-inclusive offer accords with the text, context and purpose of the current Rule 9‑1.
 

Late Formal Settlement Offers Still Capable of Triggering Costs Consequences

Two judgement were released this week by the BC Supreme Court demonstrating that formal settlement offers made late in the litigation process are still capable of triggering costs consequences.
In the first case (Dennis v. Fothergill) the Plaintiff was injured in a motor vehicle collision and sued for damages.   The Defendant made a formal settlement offer for $279,000 days before the start of trial.  Following trial global damages of just over $48,000 were awarded.  The Plaintiff argued that no costs consequences should be triggered, in part, due to the timing of the late formal settlement offer.  Madam Justice Bruce disagreed and awarded the Defendants costs and disbursements from the date of the offer onward and stripped the Plaintiff of her costs and disbursements of the trial.  In addressing the timing of the offer the Court provided the following reasons:
[30]         The plaintiff had three days to consider the offer and, while her counsel was out of town at the time the offer was served, she had an opportunity to speak with him by telephone prior to its expiry. The offer was straightforward and did not involve complicated calculations that would have required further time to consider and evaluate. Counsel deposes that the plaintiff’s alcohol consumption was interfering with his ability to obtain instructions from her at the time of the offer; however, the plaintiff’s mental health or state of sobriety was not of such a serious nature that it led counsel to apply for an adjournment of the trial that began within days of the offer. At no time was the Court advised that the plaintiff was unable to testify or appear for her trial due to mental health concerns.
[31]         I find the terms of the offer were clear and unambiguous. The amount of Part 7 benefits and the possible income tax holdback was nominal compared to the amount of the defendant’s offer to settle. The offer was also expressed to be “new money”, which meant in addition to Part 7 benefits paid to the plaintiff in advance of trial. The offer of settlement was clearly not a “nuisance offer” that could be easily dismissed by the plaintiff.
[32]         For these reasons, I find the plaintiff ought reasonably to have accepted the offer of settlement.
In the second case (Brewster v. Li) the Plaintiff was injured in a 2008 collision.   The parties exchanged a series of formal settlement offers, the most relevant of which being a defence offer of $450,000 made 4 days prior to trial.  At trial the Plaintiff sought damages of approximately $1,750,000.  Much of the sought damages were not awarded with a judgement of just over $418,000.
The Plaintiff argued that no costs consequences should accrue.  Mr. Justice Voith disagreed and stripped the Plaintiff of post offer costs and disbursements.  In addressing timing of the offer the Court provided the following reasons:
[25]         The timing of the Last Offer is also relevant. There is no requirement in Rule 9–1, as there was in earlier Rules, that an offer be made within a specific time from the start of trial. In several cases judges have used seven days as a reasonable time to consider an offer; see for example Bailey at para. 39; McIsaac v. Healthy Body Services Inc., 2010 BCSC 1033 at para. 87; Gonzales at para. 51.
[26]         It is clear, however, that this issue is largely driven and governed by context. In Bennett, where the defendant made an offer that was open for two days, Madam Justice Dardi succinctly said:
[34]      Mr. Bennett submits that the Second Offer should be given no force and effect because it was received “some two clear working days before the commencement of the trial.” Rule 37B does not contain the same seven-day notice provision as its predecessor. No inflexible “seven-day” rule is imposed by the Rules; rather every case must be judged on its own facts: Dodge v. Shaw Cablesystems Ltd., 2009 BCSC 1765. The proper issue for consideration is whether, in all the circumstances, the offeree had a reasonable opportunity to consider the offer: Uppal v. Rawlins, 2010 BCSC 11.
[35]      The Second Offer was made shortly before trial. The impact of the lateness of the offer was tempered by Mr. Bennett’s awareness of the settlement negotiations that had previously occurred between counsel. Given Mr. Bennett’s personal knowledge of the material facts as referred to above and his representations to the CRA in April 2005 that he had no interest in the Property, I find that neither the timing of the offer nor the late disclosure of the income tax information negatively impacted his ability to meaningfully evaluate the Second Offer. In all the circumstances, I find that as of November 19, 2008, Mr. Bennett was in a position to reasonably evaluate the Second Offer, that the two days were reasonably sufficient time for him to do so, and that he should have accepted the Second Offer.
[27]         In Enviro West, Madam Justice Boyd considered that an offer which was only open for less than two days provided the plaintiff with adequate time to properly consider the offer. She was influenced both by the fact that the defendants had made an earlier offer that “was not far different” from its last offer and by the fact that the plaintiff was “a sophisticated litigant” (at para. 55).
[28]         In Uppal v. Rawlins, 2010 BCSC 11, Mr. Justice Grauer dealt with an offer that was open for 51 hours and said:
[20]      In this case, although the offer was open for only a relatively short period of time, it was presented just before trial, when all discovery of documents and examinations for discovery had been completed, and when the issues had been fully aired in a Rule 18A application for judgment brought by the defendants. That application was dismissed because the chambers judge found that the case was not suitable for determination by summary trial given the credibility issues. Nevertheless, the position of the defendants was made abundantly clear to the plaintiffs. There would be no surprises at trial. Moreover, the perjury and forgery of the plaintiff Navjeet Uppal had been exposed, and the defendants had obtained admissions on discovery that had seriously imperiled the plaintiffs’ case.
[21]      In all of these circumstances, I have no hesitation in concluding that the offer was one that ought reasonably to have been accepted within the 51 hours or so during which it was open for acceptance. Had the plaintiffs accepted it, they would have saved $26,000 that they will now lose, they would have received $40,000 that they will not now get, they would have saved the time and expense of many days of trial, and they would have avoided all their additional liability for costs.
[29]         Finally, in Wright v. Hohenacker, 2009 BCSC 996, Madam Justice Fisher considered that four days was a reasonable time to weigh an offer in circumstances where the parties “were exchanging offers for a week before” (para. 17).
[30]         In this case counsel for Ms. Brewster emphasized the plaintiff’s emotional frailty. He argued, and she deposed, that she had only been examined for discovery a week or so before the Final Offer was made, that that process had been upsetting to her and further that when she received the Last Offer she felt “doubtful, angry and bullied”.
[31]         Though Ms. Brewster may have felt these things, there was no objective reason to feel bullied. Similarly, the fact that her examination for discovery only took place shortly before the trial does not appear to have been through any fault of the defendant.
[32]         Having said this I do accept that receiving two different offers, which replaced an earlier offer, in close succession and without any explanation, late on the Friday before the week in which the trial started, had the prospect to confuse and be more difficult to deal with. I further accept, having seen Ms. Brewster give evidence, that she would have been somewhat fragile emotionally on the eve of trial.
[33]         Accordingly, different aspects of the considerations raised by Rule 9–1(6)(a) favors each of the parties. On balance, therefore, this consideration is neutral…
[39]         I return to where I started. The dominant object that animates Rules 9–1(5)–(6) is the promotion of reasonable settlements. The plaintiff’s position, that she be awarded the costs of the trial notwithstanding the Last Offer, completely ignores this object.
[40]         I consider that a result which properly gives effect to Rule 9-1(4) and which properly reflects the additional considerations that I have identified, would be to deprive the plaintiff of all of her costs, including all disbursements, after February 11, 2013. This result accords with the result arrived at by the court, for example, in each of Tompkins at paras. 28-31 and Wafler at para. 41.

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ERIK
MAGRAKEN

Personal Injury Lawyer

When not writing the BC Injury Law Blog, Erik is the managing partner at MacIsaac & Company, based in Victoria, B.C. He is also involved with combative sports regulatory issues and authors the Combat Sports Law Blog.

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