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ICBC Denied Double Costs Despite Significantly Besting Formal Settlement Offer

(Update February 9, 2012 – the below decision is under appeal with the BCCA granting leave to appeal on February 9, 2012)

Last year highly publicized reasons for judgement were released assessing damages at $5.9 million for a lawyer who sustained a traumatic brain injury during a dance floor incident.   Despite the headline making award, only a fraction of the damages were recoverable due to the limits of the responsible insurer.  In what may be the final chapter of this long legal saga, reasons for judgement were released addressing costs.
As was widely reported, the Plaintiff was injured in a dance floor incident and successfully sued another lawyer that knocked her down causing her brain injury.  The reason why ICBC played a role is because the Plaintiff was involved in a subsequent car crash.  She sued the motorist for damages claiming the crash aggravated her brain injury.  Prior to trial ICBC made a formal settlement offer of $500,000.  The Plaintiff countered at $1.9 million.   Ultimately her allegations that the crash aggravated the brain injury were rejected and damages of just over $10,000 were awarded for the car crash.
ICBC asked the the Court to award them double costs under Rule 9-1.  Despite ICBC’s success in relation to their formal settlement offer and despite concerns about aspects of the Plaintiff’s trial testimony, Mr. Justice Kelleher declined to award ICBC double costs.  In today’s case (Danicek v. Li) the Court provided the following reasons:
[38] Considering all the factors, I conclude that there should be no award of double costs.  The plaintiff suffered, I found, career ending injuries.  I cannot say it was unreasonable to decline the offer.  Although I considered Ms. Danicek to be less than candid, I conclude on a consideration of all factors that no double costs award should be made.
Despite this, the Court did go on to award Costs and Disbursements at Scale C (the highest scale).  In reaching this decision Mr. Justice Kelleher provided the following Reasons:

[40] Counsel agree that the relevant factors for determining whether Scale C costs should be awarded include:

–       the length of trial;

–       the complexity of issues involved;

–       the number and the complexity of pre-trial applications;

–       whether the action was hard fought with little conceded;

–       the number and length of examinations for discovery;

–       the number and complexity of expert reports; and

–       the extent of the effort required in the collection and proof of facts.

See: Mort v. Saanich School Board, 2001 BCSC 1473 at para. 6; 566935 B.C. Ltd. v. Allianz Insurance Co. of Canada, 2005 BCSC 3032 at para. 7.

[41] Based on these criteria, there will be an award at Scale C.

[42] The trial was 29 days.  A central issue was whether the plaintiff’s symptoms would have resolved but for the motor vehicle accident.  There were reports and/or testimony from physiatrists, neurologists, psychiatrists and others.  The plaintiff alone relied on 21 expert reports.

[43] The action was complex. There were some seven parties involved. The plaintiff was examined for discovery on eleven occasions over several years. There were a number of applications both prior to and during the trial.  This case bears similarity to Graham v. Marek, 2002 BCSC 214; Ramcharitar v. Gill, 2007 BCSC 1268; and Mosher v. Sedens Estate, [1998] B.C.J. No. 2822.

[44] I have considered Hussack v. School District No. 33 (Chilliwack), 2010 BCSC 304, and Radke, when costs at Scale B were awarded.

[45] Hussack was a 23-day trial.  However, the liability issue was not complex; there were only four pre-trial applications and none was complicated.  The examination for discovery of the plaintiff was one full day and three half days.  There was one plaintiff and one defendant.

[46] In Radke, Madam Justice Boyd cited these circumstances in concluding that the matter was not a matter of “more than ordinary difficulty” (at para. 26):

[26]      The one circumstance which I agree made this case somewhat unusual was the fact that the defendant apparently took a very heavy interest in this case, to the point of following her neighbour (the plaintiff) about and gathering evidence to challenge her claims of disability.  In response the plaintiff’s counsel apparently conducted an in- depth investigation of the defendant, including her history of unusual behaviour in the neighbourhood, so as to challenge her own credibility and reliability.  The trial was settled before that evidence was heard.

[47] The complexity of this matter is well beyond what was before the Court in Hussack and Radke.


BC Court of Appeal Discusses Jury Instructions in Trip and Fall Lawsuits


(Update March 22, 2012The case discussed below was subsequently dismissed at the new trial ordered by the Court of Appeal.  You can access the reasons for judgement here)
Reasons for judgement were released this week by the BC Court of Appeal ordering a new trial following the dismissal of a trip and fall lawsuit.
In today’s case (Lennox v. New Westminster (City)) the Plaintiff was seriously injured while walking on a municipal sidewalk.   She alleged that she tripped because of “a discrepancy in the elevation between two panels of the sidewalk that had apparently shifted due to the roots of a large tree“.  She claimed the City was negligent and sued for damages.  A jury dismissed her case.  The Plaintiff appealed arguing the verdict was not reasonable and that the jury was misdirected by the trial judge.
The BC Court of Appeal found that while there evidence to justify the Jury’s verdict, a new trial was warranted because of the presiding judges directions to the Jury.  Specifically the judge charged the jury that “The plaintiff must prove that the city’s employees negligently carried out their responsibilities under the city’s written and unwritten inspection and maintenance policies.
The BC Court of Appeal found this to be a fatal error as either a breach of the City’s written or unwritten policies could have constituted negligence.  In a 2-1 split the BC Court of Appeal ordered a new trial with the majority providing the following reasons:
[27] The question chosen by the trial judge in this case referred to the respondent’s written and unwritten policies in a conjunctive manner, leaving the potential for members of the jury to believe that the plaintiff’s case would have to fail, unless she proved a breach of both as opposed to either policy.  It was unnecessary for the appellant to establish a breach of both the written and the unwritten policies in order to succeed in her claim in negligence, and a misdirection amounting to an error in law results, if that is what the jury question required…
[34] While it is true that the trial judge instructed the jury on more than one occasion that the appellant’s case was argued in the alternative; that she asserted a breach of both the written and the unwritten policies, I do not consider that his summary of the appellant’s alternate theories of her case overcomes the potential that the single question asked of the jury may have caused them to conclude that the appellant had to establish breaches of both the written and the unwritten City policies in order to succeed…

As was the case in Laidlaw, the trial judge’s charge did not mirror the wording in the single question asked of the jury, and again, as in Laidlaw, the charge was inconsistent, here, as to whether the plaintiff needed to prove a breach of one or both of the respondent’s policies.  By the time the jury was completing its deliberations, their focus must have been on the question, which is clear in its terms but, unfortunately, had the potential to mislead them as to what the plaintiff needed to prove in order to succeed.  It is impossible to determine with confidence that the jury had understood its task in deciding if the respondent’s employees were negligent in carrying out their operational responsibilities in accordance with either, as opposed to both of the respondent’s written and unwritten policies.

[40] I would therefore accede to the first ground of appeal, and order a new trial.

Madam Justice Smith, in dissenting reasons, stated the charge was nothing more than a “latent ambiguity” and that a new trial was not warranted.

Details Please: Privileged Documents and Disclosure Requirements of the New Rules of Court


In 2009 the BC Court of Appeal released reasons for judgement addressing the details necessary when listing privileged documents.  The first reasons I’m aware of addressing this issue under the New Rules of Court were released this week by the BC Supreme Court, Vancouver Registry, demonstrating that the law remains unchanged.
In today’s case (Anderson Creek Site Developing Ltd. v. Brovender) the Plaintiff sued various defendants claiming damages for alleged unpaid accounts.   The Defendants listed many privileged documents in the course of the lawsuit.  The Plaintiff brought an application seeking that these be described with greater detail.  Mr. Justice Verhoeven granted the application and in doing so provided the following useful summary describing the necessary details when listing a privileged document under Rule 7-1(7):

[110] Rule 7-1(7) requires that:

The nature of any document for which privilege from production is claimed must be described in a manner that, without revealing information that is privileged, will enable other parties to assess the validity of the claim of privilege.

[111] The description in the list of documents is not sufficient to respond to that requirement.

[112] The defendants argue that the description that they have given on their list of documents is not materially different than the plaintiff’s own description. That may be. That application is not before me at the moment.

[113] It is hard to know in a given case how much description is required to answer the requirement in Rule 7-1(7) without revealing privileged information. It depends on the nature of the case and the nature of the document. In this case, I would expect most documents to be transactional documents. There may be other documents as well.

[114] As a minimum, in order to have any assessment of the validity of a claim of privilege, in the circumstances of this case, it seems to me that what is required to be described are four things: first, something about the nature of the communication, that is whether it is a letter or an e-mail or memorandum or something else; second, the date upon which it was created or sent; third and fourth, the author and the recipient. With that information, it may be possible for the plaintiff to assess the claim of privilege. There may be further disclosure that is necessary at that stage; I cannot tell.

[115] So that application will be allowed to that extent. The defendants will produce a more detailed list of privileged documents disclosing that information. The plaintiff will be at liberty to reapply for a better list, in order to challenge the claim of confidentiality.

Can ICBC Deny Fault For a Crash After Previously Admitting it?


As with most areas of law, the short answer is ‘it depends‘.  Reasons for judgement were released this week by the BC Supreme Court, Victoria Registry, canvassing this area of law.
In today’s case (Hurn v. McLellan) the Plaintiff was injured in a 2007 motor vehicle collision.  It was a ‘t-bone‘ crash that occurred in a parking lot.  The Plaintiff started a lawsuit and ICBC admitted the issue of fault in the Pleadings on behalf of the other motorist.  As the lawsuit neared trial ICBC brought an application seeking permission to withdraw the admission of fault.  Master Bouck dismissed ICBC’s request finding it would be prejudicial to the Plaintiff’s interests.  In doing so the Court provided the following useful summary of the law:

[26] …There are similar and overlapping considerations for the court on these two types of applications. However, to adopt the submissions of plaintiff’s counsel, the “high bar” threshold to obtain leave to withdraw an admission must be met before the “low bar” threshold to obtain leave to amend a pleading will follow. Thus, the legal test to be met by the defence is with respect to the withdrawal of an admission.

[27] Rule 7-7(5) of the SCCR  provides that:

7-7(5)  A party is not entitled to withdraw

(a) an admission made in response to a notice to admit,

(b) a deemed admission under subrule (2), or

(c) an admission made in a pleading, petition or response to petition

except by consent or with leave of the court.

[28] The principles which govern an application to withdraw an admission of fact are as follows:

1.  Whether there is a triable issue which, in the interests of justice, should be determined on the merits and not disposed of by an admission of fact;

2.  In applying that test, all of the circumstances should be taken into account including whether:

(a) the admission has been made inadvertently, hastily or without knowledge;

(b) the fact admitted was not within the knowledge of the party making the admission

(c) the fact admitted is not true.

(d) the fact admitted is one of mixed fact and law

(e) the withdrawal of the admission would not prejudice a party

(f) there has been no delay in applying to withdraw the admission.

Hamilton v. Ahmed (1999), 28 C.P.C. (4th) 139 (B.C.S.C.) at para. 11, as approved in Munster & Sons Developments Ltd. v. Shaw, 2005 BCCA 564.

[29] More recently, the test has been articulated by the court in 374787 B.C. Ltd. v. Great West Management Corp., 2007 BCSC 582 at para. 27:

As a general rule, the Court must consider whether in the circumstances of the case the interests of justice justify the withdrawal of the admission. The following facts, which are not exhaustive are relevant: delay, loss of a trial date, a party is responsible for an erroneous admission, inadvertence in the making of an admission and estoppel …

[30] The question of fault for the accident is one of mixed fact and law: Bedwell v. McGill, 2008 BCCA 6 at paras. 33 to 34, foll’g Housen v. Nikolaisen, [2002] S.C.J. No. 31, [2002] 2 S.C.R. 235 at para. 27 (S.C.C.), per Iacobucci and Major JJ.

[31] However, whether the admission sought to be withdrawn is one of fact, law or mixed law and fact, the same legal test applies: Nesbitt v. Miramar Mining Corp., 2000 BCSC 187 at para. 6.

[32] It is not enough to show that triable issue exists. The applicant must show that, in all of the circumstances, the interests of justice require the withdrawal of the admission: Rafter v. Paterson(November 7, 2007), Vancouver No. B924884.

[33] Moreover, even if a trial date is not imminent and the applicant gave early notice of the proposed withdrawal of the admission, delay in bringing an application for such relief might in itself be a “concern that cannot be overcome”: Sureus v. Leroux, 2010 BCSC 1344.

Limited Application Provided to ICBC's "Attached Equipment" Exclusion


While ICBC does provide coverage for most tort claims following BC motor vehicle accidents there are certain exclusions to their coverage.  Last week the BC Court of Appeal released useful reasons for judgement addressing the scope of ICBC’s “Attached Equipment” exclusion.
In last week’s case (Wormell v. ICBC) the Plaintiff was injured in a 2003 incident when he was helping a friend transport some goods.  Their vehicle stopped at a weigh scale.  The Plaintiff stood on top of the cargo.  At the same time, the Defendant was operating a crane attached to the vehicle intending to lift the cargo.  The cargo shifted while the Plaintiff was still standing on it and in the “agony of the moment” the Plaintiff jumped off the truck to the ground which was some 12 feet below.  In jumping on the ground the Plaintiff suffered various injuries including a “crush fracture to the left ankle and a tear to the anterior cruciate ligament of his right knee“.
The Plaintiff sued for damages and following trial the Defendant was ordered to pay just over $570,000 in damages.  The Defendant was insured by ICBC.  The Plaintiff applied, pursuant to section 76(2) of the Insurance (Vehicle) Act for ICBC to pay the judgement.  ICBC refused to pay arguing that this claim fell outside of the scope of coverage because of section 72(2) of the Insurance (Vehicle) Regulation which states that:
The corporation shall not indemnify an insured for liability imposed by law for injury, death, loss or damage arising, directly or indirectly, out of the operation of attached equipment at a site where the attached equipment is being operated…
The Plaintiff sued ICBC and succeeded.  ICBC appealed arguing that the claim fell within this exclusion.  The BC Court of Appeal disagreed and dismissed ICBC’s appeal.  In doing so the Court provided the following reasons limiting the scope of ICBC’s ‘attached equipment’ exclusion:

[21] To repeat, the language of this exclusion is as follows:

(2)        The corporation shall not indemnify an insured for liability imposed by law for injury, death, loss or damage arising directly or indirectly, out of the operation of attached equipment at a site where the attached equipment is being operated, unless the attached equipment …

[22] ICBC’s position is that anywhere the crane is being used to load or unload cargo from the truck, or to move other loads, is “a site where the attached equipment is being operated”.

[23] This proposition is at odds with the presumption against tautology.  All words in a provision are to be taken to have meaning.  To interpret this clause as ICBC would, that whenever the crane is being operated it is at a site, effectively strikes out or renders superfluous the words “at a site where the attached equipment is being operated”.

[24] A plain reading of s. 72(2) leads to the conclusion that some losses from the operation of the attached equipment would be covered by ICBC.  Otherwise, the clause “at a site where the attached equipment is being operated” is meaningless.  The appellant argues in effect “everywhere” and “every time” the crane is operated it is at a site.

[25] If that were the case, then s. 72(2) would simply have read as follows:

(2)        The corporation shall not indemnify an insured for liability imposed by law for injury, death, loss or damage arising, directly or indirectly, out of the operation of attached equipment …

[26] To give meaning to the words “at a site where the attached equipment is being operated” requires that “site” refer to something more, such as work sites or the site of the owner’s business operations.  The appellant has not raised an alternative meaning or function that would not render the words “at a site” meaningless or superfluous.

[27] In accordance with the principles of interpretation for statutes and insurance policies, the clause means that the automobile insurance policy covers accidents caused by the attached equipment unless it was being used for business operations at a work site.  That was no doubt the intent of the drafters, namely to exclude losses arising from business operations.

[28] On the appellant’s interpretation the only time the vehicle would not be at a site, and the exclusion would not apply, would be when the truck and crane were in transit from place to place.

[29] Such an interpretation is not consistent with the reasonable expectations of the parties and if it had been intended, could have been achieved by much simpler and concise language directed to that end.

[30] I agree with the learned trial judge that the plain meaning of the words used in s. 72 is that the words “at a site where the attached equipment is being operated” mean, a site such as a construction site, a building site, or some other “work site”.

More on Responding Medical Reports and Physical Exams: Reconciling the Cases to Date


As previously discussed, a debate has arisen about if and when a Defendant is allowed to compel a Plaintiff to attend an ‘independent‘ medical exam in order to obtain a ‘responding‘ report under the BC Supreme Court Rules.  Very useful reasons were released this week by the BC Supreme Court, Victoria Registry, addressing and reconciling the various authorities considering this issue to date.
In today’s case (Labrecque v. Tyler) the Plaintiff was involved in three separate collisions.  He sued for damages and all three claims were set for trial at the same time.   In the course of the lawsuit the Plaintiff obtained  a report from his GP and from a physiatrist.  The Plaintiff intended to rely on the physiatrist’s report at trial.  The Defendants intended to rely on the GP’s report at trial.  The Plaintiff never attended a defence medical exam in the course of the lawsuit and as the trial neared one of the Defendant’s brought an application to compel the Plaintiff to attend an examination in order to get a ‘responding’ report.
In support of the application the proposed examiner swore an affidavit explaining that he needs to ‘physically examine the plaintiff and ask him the questions a doctor would ask in order to elicit information upon which to ground my opinions‘.    The application was dismissed finding that this falls short of what is required in order for a physical exam to be ordered as part of a responding report.  In dismissing the application Master Bouck provided the following useful reasons reconciling the authorities addressing this issue to date:

[28] In Wright v. Bauer, the court recognized that Rule 11-6(4) “filled a lacuna” in the Rules governing civil procedure in this province: para. 12. Parties are now specifically governed by a Rule regarding delivery of responsive written expert evidence. Prior to this Rule’s enactment, the delivery of such evidence was governed by common law principles.

[29] In that case, the application for an independent medical examination was brought nearly one month before the defence would have been required to serve a responsive report.

[30] In dismissing the defendant’s application, the court found that the applicant had not met the necessary evidentiary threshold justifying an order under Rule 7-6: para. 21.

[31] The same result is found in Boudreau v. Logan and Crane v. Lee, supra.

[32] In contrast, the court in Luedecke v. Hillman was satisfied that an order should go requiring the plaintiff’s attendance at an examination…

[35] In my view, the principles enunciated in Luedecke and Wright are consistent and entirely reconcilable. The difference between the outcomes in these two cases lies in the facts.

[36] In both cases, the court concerned itself with the evidence presented to support the necessity of an examination as well as the question of prejudice.

[37] Here, the evidence from Dr. Piper as to the necessity for an examination is rather general in nature. Dr. Piper refers to the reports of both Dr. Grimwood and Dr. MacKean when in fact the responsive opinion would concern only the latter’s report. Unlike the evidence from the proposed examiner in Luedecke, Dr. Piper does not specifically identify the “medical evidence” (other than the reports themselves) that can only be addressed if a physical examination of the plaintiff occurs. Rather, Dr. Piper’s evidence suggests that an examination is necessary to respond generally to the subject matter of the plaintiff’s case and, as such, is no justification for the order sought: Luedecke at para. 52.

$85,000 Non-Pecuniary Damages Assessment for Chronic Pain Syndrome

Adding to this site’s archives of chronic pain cases, reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, assessing damages for chronic pain syndrome.
In last week’s case (Perry v. Perry) the Plaintiff was involved in two motor vehicle collisions.  She suffered from pre-existing health problems including PTSD and chronic pain.  She was injured in both collisions and this aggravated her pre-existing difficulties and caused new ones.  Ultimately she was diagnosed with a Chronic Pain Syndrome with a poor prognosis.  In assessing her non-pecuniary damages (money for pain and suffering and loss of enjoyment of life) at $85,000 Mr. Justice Melnick made the following findings:

41] Ms. Perry is a person who had had a number of challenging health issues prior to the first accident. Those issues included PTSD, which related to her childhood abuse, and problems with her feet and legs. She sometimes suffered from depressive episodes and had a history of alcohol and heroin abuse. She had multiple areas of pain that she experienced at least as far back as 2003. I conclude that, prior to the first accident, she was a person of some fragility with respect to both her physical and emotional health, likely the seeds of which were sown by her tragic childhood and exacerbated by her alcohol and drug use.

[42] That said, Ms. Perry, in the few years prior to the accident, had made real progress by putting her addictions behind her and, to a certain extent at least, engaging in life through education, volunteer work and a small amount of employment. She was, however, what I would describe as a “thin-skull” case: more at risk for emotional and psychological trauma than a normal person without Ms. Perry’s medical history would be: Athey v. Leonati, [1996] 3 S.C.R. 458. See also: Hussack v. School District No. 33 (Chilliwack), 2009 BCSC 852 at para. 143; . Thus, while the average otherwise healthy individual involved in the same type of accidents that Ms. Perry experienced may have suffered similar physical injury, that person would not be at the same risk of suffering the same psychological damage as Ms. Perry.

[43] I am satisfied that Ms. Perry suffers from chronic pain, which is largely attributed to the first accident, and to a minor extent to the second accident. She was not without pain and physical problems before these accidents and the defendants are not responsible for the extent to which those symptoms were already symptomatic: Athey at para. 35…

[51] Ms. Perry has several health issues, a large portion of which are attributable to these two accidents. Taking into account, as I have, that some of her current health situation is attributable to her past medical problems, I asses her overall non-pecuniary damages at $85,000. The seriousness of Ms. Perry’s injuries and her guarded prognosis are more in line with the authorities suggested by counsel for Ms. Perry.

Jury Dismissal Of Intersection Crash Claim Upheld on Appeal


(Accident Reconstruction Software courtesy of SmartDraw)
Adding to this ever-growing database of BC motor vehicle liability cases, reasons for judgement were released this week by the BC Court of Appeal upholding a Jury Verdict dismissing an injury claim following an intersection crash.
In today’s case (Bailey v. Jang) the Plaintiff was driving in a restricted-traffic curb lane as she approached an intersection.  At the same time the main lane in her direction of travel was backed up leaving a gap at the intersection.  The Defendant tried to make a left hand turn through the gap and the vehicles collided.  The Plaintiff sued for damages but her claim was dismissed with the Jury finding that the Defendant was not negligent.  The Plaintiff’s appeal was also dismissed with the Court finding that the jury’s verdict was not unreasonable.  In doing so the BC Court of Appeal provided the following reasons addressing some of the principles that come into play for crashes involving left-hand turning vehicles:

[11] Section 174 of the Motor Vehicle Act, R.S.B.C. 1996, states:

Yielding right of way on left turn

174.     When a vehicle is in an intersection and its driver intends to turn left, the driver must yield the right of way to traffic approaching from the opposite direction that is in the intersection or so close as to constitute an immediate hazard, but having yielded and given a signal as required by sections 171 and 172, the driver may turn the vehicle to the left, and traffic approaching the intersection from the opposite direction must yield the right of way to the vehicle making the left turn.

[12] Although, as asserted by the appellant, it is a logical corollary of the jury’s verdict that they concluded the appellant was 100% at fault for the accident, it is important to remember that the principal focus of this appeal is whether there was evidence on which the jury properly could have found that the respondent was not negligent.

[13] The appellant relies on Pacheco v. Robinson, (1993), 75 B.C.L.R. (2d) 273 para. 15 where this Court stated:

… the dominant driver who is proceeding through the intersection is generally entitled to continue and the servient left-turning driver must yield the right of way. The existence of a left-turning vehicle does not raise a presumption that something unexpected might happen and cast a duty on the dominant driver to take extra care. …

These comments were noted in Salaam v. Abramovic, 2009 BCSC 111 para. 26.

[14] The quotation of legal principle from Hiscox v. Armstrong, 2001 BCCA 258 and Pacheco is based on circumstances where the left-turning driver “proceeds through an intersection in complete disregard of his statutory duty to yield the right-of-way”. In Pacheco this Court found that the defendant “totally failed to determine whether [the] turn [could] be made safely”. In Salaam, the court held that the dominant driver “was there to be seen from 450 feet away” and that “[t]he plaintiff did not determine whether her turn could be done safely”. Such drivers cannot shift responsibility to the driver who has the right-of-way.

[15] Other cases relied on by the appellant show that a dominant driver is not without obligation. This was recognized in Pacheco wherein this Court distinguished a decision of the Ontario Court of Appeal on the basis that “[t]here was no indication here that traffic on the left hand side of the plaintiff had stopped so that the plaintiff should have been alerted to a situation of potential danger”. An obligation on a dominant driver to take care was recognized in Berar v. Manhas, [1988] B.C.J. No. 677, Reynolds. v. Weston, [1989] B.C.J. No. 49, and Clark v. Stricker, 2001 BCSC 657.

[16] These cases illustrate the fact that a left-turning driver is not without rights as is clear from the wording of s. 174. Too often drivers proceed through an intersection as if left-turning drivers have no rights. In each situation, the specific circumstances dictate whether a left-turning driver is at fault for a collision, in whole, in part, or not at all.

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


Interesting reasons for judgement were released this week by the BC Supreme Court, New Westminster Registry, discussing the ‘flexibility‘ that the New Rules of Court give Judges in making costs awards following trials where formal settlement offers were made.
In today’s case (Cairns v. Gill) the Plaintiff brought an ‘exaggerated’ personal injury claim to trial following a 2005 motor vehicle collision.  ICBC made an early formal settlement offer in 2006.   ICBC’s offer was modest at just over $1,200 plus costs.   The Plaintiff rejected the offer and proceeded to trial.   The trial did not go well and the Jury largely rejected the Plaintiff’s claim awarding just over $850 in total damages.
Having beaten their formal offer ICBC applied for an order that the Plaintiff pay their post offer Bill of Costs which was expected to exceed $16,000.  Despited the ‘exaggerated’ nature of the claim Madam Justice Arnold-Bailey found that such a result was unjust.  The Court stripped the Plaintiff of her post offer costs and disbursements however did not award ICBC their costs.  In reaching this result the Court provided the following reasons demonstrating the flexible (but perhaps somewhat unpredictable) nature of the current Civil Rules:
[57] The defendants seek costs and disbursements following the date of the offer to settle, despite the plaintiff obtaining judgment.  This is available pursuant to Rule 9-1(5)(d)…

[59] To make such an order would have a very negative effect on the plaintiff, and have the broader effect of further discouraging those with legitimate claims from bringing their actions in this Court when the defendant, funded by an insurer, has deeper pockets with which to bear the risk of a plaintiff achieving only a minor or, indeed, a pyrrhic victory.

[60] It is clear from the rules and the jurisprudence that costs consequences are to guide counsel in litigation decisions.  The object of the Rules is, “to secure the just, speedy and inexpensive determination of every proceeding on its merits.”  This object is to be conducted, as far as is practicable, with regard to proportionality.  While this object is frustrated to some extent by a claim worth $851 proceeding to its conclusion at a Supreme Court jury trial where it was more appropriate for determination in Provincial Court, the object and proportionality principle do not appear to accord with the potential cost of litigation in this case.  The bill of costs of the defendants is expected to exceed $16,000.

[61] I note that the Court of Appeal in Giles recognized when dealing with the issue of double costs that “all litigation comes with a degree of risk,” and that, “when faced with settlement offers, plaintiffs must carefully consider their positions.”  However, the court also indicated that plaintiffs, “should not to be cowed into accepting an unreasonable offer out of fear of being penalized with double costs if they are unable to ‘beat’ that offer.”  These considerations also appear relevant in these circumstances.

[62] In this case, pursuing a valid, although exaggerated, personal injury claim to trial, where the offer to settle did not provide a genuine incentive to settle in the circumstances, may, in the face of a defence funded by ICBC, cost the plaintiff almost twenty times what was awarded at trial.  It seems consistent with the object of the Rules generally, and of Rules 9-1 and 14-1(10), to have regard to the need to emphasize litigation decisions that direct cases to the appropriate forum without disproportionately penalizing a party that had some success, however limited.

[63] To this end, as considered in relation to the first issue, Rule 14-1(10) permits the Court to limit a plaintiff to the recovery of disbursements when the amount of the judgment is within the jurisdiction of the Provincial Court, which I declined to do in this case.  Then, as considered in relation to the second issue, Rule 9-1(5)(a) permits the Court to deprive the plaintiff of any or all of their disbursements after the date of the offer, which I found to be appropriate.  Then, taking the matter even further, Rule 9-1(5)(d) permits the Court to consider requiring the plaintiff to pay the defendants’ costs in respect of some or all of the steps taken after the date of the offer to settle.

[64] This progression demonstrates the flexibility within the overall framework of the rules to craft an order for costs that is appropriate to the circumstances of each case.

[65] In the present case, the plaintiff, although the “successful” party at trial, agreed to forego her costs after the date of service of the offer to settle and is, by virtue of my decision on the second issue, without disbursements from the date of service of the offer to settle, which occurred very early in the proceedings.  To require her to pay all or some of the defendants’ costs after the date of service of the offer to settle, which at the time was an unreasonably low offer, would be excessive and unjust.  It would not be in keeping with the nature of the offer, the relative financial circumstances of the parties, the principle of proportionality, and the need to avoid decisions that inappropriately discourage plaintiffs from pursuing valid claims.

This case is worth reviewing in full for the Court’s length analysis of many authorities to date addressing costs discretion under the new Rules of Court and further addressing important issues such as sufficient reason to sue in Supreme Court, and the relevance of suing an insured defendant.

Chambers Practice Update: The Prohibition of Written Arguments


Last month the BC Supreme Court released reasons indicating that parties ought to use Form 32 to provide the Court with “full disclosure of the argument to be made in chambers”. It is good practice to do so because Rule 8-1(16) of the New Rules prohibits written arguments (other than those set out in Form 32) from being relied on in Chambers Applications estimated to take less than 2 hours.  Reasons for judgement were released today by the BC Supreme Court, Victoria Registry, demonstrating this prohibition in action.
In today’s case (Lebrecque v. Tyler) the Plaintiff was involved in three motor vehicle collisions.  The Defendant brought a motion for an ‘indepdendent‘ medical exam but this was dismissed.   During the course of the application the Defendant’s lawyer provided the Court with a written outline of argument.  The Court refused to consider this outline citing the new prohibition in the Rules of Court.  Master Bouck provided the following useful reasons:
Prior to July 1, 2010, provision of a written argument was recognized as good practice and often encouraged by the court — even for applications consuming less than 2 hours.
Since July 1, 2010 and pursuant to Rule 8-1(16), a written argument may only be presented to the court if the application consumes more than two hours.  There is no discretion under the Rule to receive written argument in other circumstances.  This application was estimated to be heard in 35 minutes but took one hour.
Thus, no written argument can or should have been considered by the court.
These observations should not be seen as a criticism of defence counsel whose efforts were no doubt intended to assist the court.  However, it seems worthwhile to remind litigants of the provisions of Rule 8-1(16) so that in the future, the time and expense of preparing a separate written argument is avoided.
As of today’s date the Labrecque decision is not yet publicly available but, as always, feel free to contact me and request a copy and I’ll be happy to provide one.