I'd Buy That For a Dollar – Rule 37B and Nuisance Settlement Offers
As readers of the blog know Rule 37B of the BC Supreme Court Rules has given the Court considerable discretion with respect to awarding parties costs when formal offers of settlement are beat at trial. One pattern that is becoming clear under the new Rule is that token offers of settlement are not particularly effective in triggering meaningful costs consequences. Reasons for judgement were released today demonstrating this.
In today’s case (Skinner v. Fu) the Plaintiff was involved in a BC Car Crash and sued the other motorist. The issue of fault was hotly contested by ICBC who argued that the Plaintiff was fully at fault for the accident and his injuries. Mr. Justice Harvey of the BC Supreme Court agreed and dismissed the Plaintiff’s claim after a summary trial.
Having successfully defended the lawsuit ICBC (through the Defendant) applied for costs from the Plaintiff. Prior to trial the Defendant made a formal offer to settle the claim for $1. ICBC asked the Court to award them double costs.
Mr. Justice Harvey dismissed the motion for double costs. In doing so he commented that a $1 offer in an ICBC Claim with contested liability is not a ‘reasonable offer’ which ought to trigger increased costs consequences for the losing party. Specifically the Court held as follows:
 Liability was the central issue between the parties. The defendants, from the time the matter was first reported to the Insurance Corporation of British Columbia, took the position that no liability rested with the defendant driver despite his apparent breach of s. 187 of the Motor Vehicle Act, R.S.B.C. 1996, c. 318.
 Immediately after the writ of summons was issued, the offer to settle the matter for $1 was forwarded to the plaintiff.
 Where, as in the case at bar, the central issue is liability, I do not consider an offer of $1 plus costs of filing the writ of summons an offer which ought reasonably be accepted, either on the date that the offer to settle was delivered or on any later date. Were it so, all defendants in similar positions would follow suit and, as a result, enhance their entitlement to costs without promoting the underlying objective of Rule 37B, which is to encourage reasonable settlement. As a result, this offer to settle will have no effect on the order of costs in this case.
This is not the first case interpreting Rule 37B in this way (click here to read my previous posts discussing the Court’s application of Rule 37B in BC Injury Claims) and the pattern seems well established that nominal offers will rarely be effective for triggering meaningful costs consequences.
In my continued efforts to get prepared for the New BC Supreme Court Civil Rules I am cross referencing Civil Procedure cases that I discuss on this blog with the New Rules. I will again point out that Rule 37B will be replaced with Rule 9 under the New Rules. The new rule uses language that is almost identical to Rule 37B which should help cases such as this one retain their value as precedents.