More on the Reality of Insurance and Costs Consequences Following Trial
Update March 21, 2014 – the Trial Judgement with respect to the relevance of insurance and costs was upheld today by the BC Court of Appeal
In 2010 the BC Court of Appeal confirmed that Judges can look at insurance when considering the “financial circumstances” of litigants when addressing costs consequences following trials where a formal settlement offer was made. Further reasons were released last week by the BC Supreme Court, Victoria Registry, confirming that costs consequences should not be applied with the ‘fiction‘ of ignoring insurance.
In last week’s case (Meghji v. Lee) the Plaintiff suffered brain trauma after being struck by a motorist while walking in a marked cross-walk in 2003. At trial the motorist was found 90% at fault for the crash with the Ministry of Transportation shouldering the remaining 10% for designing the intersection with inadequate lighting.
Prior to trial the Plaintiff offered to settle for $750,000. Neither Defendant accepted. Damages at trial were assessed at just over $1.1 Million with the Defendants being jointly and severally liable. The Plaintiff sought and was awarded double costs from the time of her offer onward. In doing so Mr. Justice Johnston provided the following useful reasons addressing the reality of insurance and the risks of joint and several liability:
Also relevant to consider is the fact that a well-funded party, such as MoTH, faces higher risk with joint liability when other potentially liable parties have less means or no means with which to satisfy a possible judgment. In such circumstances, the well-heeled party may end up paying more than its proportionate share to the plaintiff if or when the impecunious party exhausts its ability to pay.
This risk is balanced by the potential that the plaintiff might be held partly to blame for her losses, which would confine the well-funded party’s liability to its proportionate share of the loss through several liability: Leischner (Next friend of) v. West Kootenay Power,  B.C.J. No. 1641…
Quite apart from the fact that I am bound by the decision in Smith v. Tedford, its reasoning eliminates one fiction that ought not to complicate proceedings before a judge alone. That fiction is that there is no plan of universal compulsory automobile insurance in effect in British Columbia, mandated by statute, where the details of the coverage available are found in statute and regulation. If judges and others are presumed to know the law, there is little sense in requiring that judges ignore what the law provides when dealing with costs.