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

and this was granted on the basis that ICBC was unreasonable in not accepting the Plaintiff’s offer.  In reaching this decision Mr. Justice Gomery provided the following reasons:

1]             The plaintiff sued the defendants for damages consequent on injuries suffered in a motor vehicle action.  Liability was admitted.  The trial was straight-forward.  The defendants did not call evidence.  I gave judgment at the conclusion of the trial awarding the plaintiff damages totalling $126,430, consisting of special damages of $6,430.80, non-pecuniary general damages of $80,000, and compensation for the cost of future care of $40,000.

[2]             After I gave judgment at trial, counsel for the plaintiff indicated that the award exceeded offers to settle made before trial pursuant to Rule 9-1 of the Supreme Court Civil Rules and sought double costs.  Counsel for the defendants said that he had no instructions.  I directed that counsel exchange written submissions according to a schedule.  The plaintiff filed a written submission as contemplated by the schedule.  The defendants did not file a written submission.  It was due on June 18, 2019.  Having evidently decided not to respond, it would have been courteous for the defendants to have advised the Court of their decision…

[11]         I find that it was unreasonable for the defendants to refuse the $70,000 offer, having regard to the following:

a)    The defendants must have been prompted by the $95,000 offer to assess the settlement range in January 2019 and in February 2019, when they examined the plaintiff for discovery.  In that light, they had a reasonable opportunity to consider the $70,000 offer in the period just before the trial began, while they were preparing for trial.

b)    There were no serious conflicts in the lay evidence presented at trial;

c)     The expert opinion evidence tendered by the plaintiff at trial was not challenged;

d)    The special damage claim was uncontentious.  The defendants argued for a non-pecuniary award in the range of $40,000 to $60,000 and a cost of future care award of $5,000.  On that basis, they would have anticipated an award in the range of $50,000 to $70,000, but they must have known that their cost of future care submission was unrealistically low, and that they were pitching their argument on the non-pecuniary award at the low end of the range.

e)    It was therefore obvious that the defendants were exposed to the likelihood of a significantly larger award than the settlement offered by the plaintiff.

f)      In short, the plaintiff’s $70,000 offer was well-timed and substantive.  It offered a genuine compromise.  The defendants were not lacking any information they needed to assess the offer or anticipate the eventual result at trial.  In the circumstances, it was unreasonable for the defendants to refuse the $70,000 offer.

[12]         The second consideration is the relationship between the offer and the eventual judgment of the Court.  The judgment exceeds the offer by 80%.  This favours the plaintiff’s application.

[13]         The third consideration is the relative financial circumstances of the parties.  The defendants are represented by the Insurance Corporation of British Columbia.  That fact carries no weight unless the insurer used its financial resources in a manner that distorted the litigation process; Wepryk v. Juraschka, 2013 BCSC 804 at para. 15.  That did not occur in this case.  I view relative financial circumstances as a neutral consideration.

[14]         Finally, I am to consider any other factor I consider appropriate.  The plaintiff observes, correctly, that the defendants could have reduced the duration and expense of the litigation and freed up judicial resources had they accepted the offer.

[15]         I should have regard to the purpose of Rule 9-1.  It is intended to encourage parties to settle prior to trial by attaching costs consequences to a failure to accept an offer of settlement by which further legal proceedings could have been avoided, in an appropriate case; C.P. v. RBC Life Insurance Company, 2015 BCCA 30.  At para 95, Goepel J.A. stated, for the court:

A plaintiff who rejects a reasonable offer to settle should usually face some sanction in costs. To do otherwise would undermine the importance of certainty and consequences in applying the Rule:  Wafler v. Trinh, 2014 BCCA 95 at para. 81. …

[Emphasis added.]

[16]         Taking all these matters into account, I allow the plaintiff’s application and award her double costs for trial preparation and the conduct of the trial.  The defendants’ unreasonable refusal of the $70,000 offer resulting in an award that was 80% higher should result in a costs sanction.  The plaintiff should not have been put to the trouble and expense of an unnecessary trial, and the costs order should reflect that.

[17]         I award the plaintiff double costs of the trial, including her preparation for trial.  The double costs award will include the plaintiff’s costs to prepare a written submission concerning costs to which the defendants did not respond.