Insurance Policy Limits Relevant to Formal Settlement Offer Costs Analysis
In 2010 the BC Court of Appeal found that Judges could consider the existence of insurance when exercising costs discretion following a trial in which a formal settlement offer was made. Last week reasons for judgement were released by the BC Supreme Court, Victoria Registry, expanding on this principle finding that the limits of insurance coverage were equally applicable.
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.
Following trial the Plaintiff applied for double costs as the trial result exceeded a pre-trial formal settlement offer she made. The Defendant wished to place information relating to his insurance policy limits before the Court before a costs decision was made. In finding this was appropriate Mr. Justice Johnston provided the following reasons:
 Rule 7-1(4) reads:
(4) Despite subrule (3), information concerning the insurance policy must not be disclosed to the court at trial unless it is relevant to an issue in the action.
 Subrule (3) requires a party to list in his or her list of documents insurance policies that, generally speaking, might be available to satisfy a judgment in whole or in part should the judgment be entered.
 Mr. Lee has responded by arguing that the trial is over (subject, of course, to an application to re-open prior to entry of judgment), and even if the trial is not at an end, his policy limits are now relevant to an issue in the action, being costs. That relevance can fall under one or more of the considerations set out in Rule 9?1(6).
 Counsel for the Ministry of Transportation and Highways (MoTH) disagrees as to the relevance of Mr. Lee’s insurance limits.
 I have concluded that the amount of Mr. Lee’s automobile liability insurance limits is relevant to the considerations set out in Rule 9-1(6). The amount of available insurance could affect the question whether the offer was one that ought reasonably to have been accepted, and it could also affect the weighing of the relative financial circumstances of the parties.
 Counsel for Mr. Lee is authorized and directed to disclose the amount of Mr. Lee’s liability insurance limits operative at the time of the accident.