More on ICBC, Rule 37B and Costs
I have previously blogged about the new Rule 37B (here and here) which deals with formal offers of settlement and the costs consequences of trial.
The first case that I’m aware of dealing with Rule 37B in an ICBC claim was released today.
In this case both fault and quantum were at issue. The Plaintiff alleged that the Defendant was at fault for the car accident and claimed over $1million in damages. The case was presented for over one week in front of a Vancouver jury.
The case was dismissed on the issue of liability meaning that the Jury found the Plaintiff was responsible for this collision thus making her entitlement to tort damages $0.
In this case ICBC (on the defendant’s behlaf) made a pre-trial offer to settle for $35,000. This offer was made in compliance with Rule 37B.
The court refused to look at the fact that the Defendant was insured when considering ‘the relative financial circumstances of the Parties’ and concluded that the Defendant was entitled to Double Costs from the time the offer was made through trial.
I reproduce the court’s key analysis below:
a) Ought the Defendants’ Offer to Have Been Accepted?
 In her submissions, the plaintiff referred to the position that she said was taken by an unnamed ICBC adjuster respecting the responsibility for the collision. That view was apparently a preliminary one, the basis for which is unexplained; it was not before the jury in this case, and, in any event, the conclusion would certainly not be binding on the jury or the court.
 The plaintiff also referred in her submissions to the fact that she had offered to settle her claim for $160,000 plus her costs, a sum considerably less than her counsel sought from the jury.
 Based upon her offer compared to the position taken by her counsel at trial, the plaintiff was clearly prepared to take a considerable gamble to achieve a significant award. While it was open to the jury to make a sizeable award, in the event there was a finding of liability against the defendants, the discount the plaintiff was prepared to accept in order to settle the claim does not support the conclusion that she had confidence in the likelihood of securing a sizeable award at trial. That, in my view, is one of the factors against which the reasonableness of her refusal to accept the defendants’ offer to settle must be assessed.
 As I have said above, it was clearly open to the jury to dismiss the plaintiff’s claim by finding no liability against the defendants, but equally open to them to find some or even complete liability against the defendants.
 While the defendants argued that the jury’s verdict proves that the plaintiff ought to have accepted their offer to settle, I do not read Rule 37B as inviting that sort of hindsight analysis. Under Rule 37, an offer to settle was revoked once trial began. Although Rule 37B contains no such provision, the defendants in this case stated in their offer that it was open for acceptance “at any time before 4:00 pm, Pacific Time, or the last business day prior to the commencement of the first day of trial”. In my view, the reasonableness of the plaintiff’s decision not to accept the defendants’ offer to settle must be assessed, under that offer, only prior to the last date that the offer could be accepted, and in any case, under Rule 37B, prior to the delivery of the jury’s verdict, but not thereafter.
 Weighing these factors, I am unable to say that it was unreasonable for the plaintiff to have rejected the defendants’ offer to settle.
b) Relationship between the Offer and the Final Judgment
 Implicit in the defendants’ position on costs is the argument that the complete dismissal of the plaintiff’s claim obviates a consideration of subrule 37B(6)(b). I do not accept that that is an appropriate reading of that subrule.
 With respect to this subrule, the plaintiff argues that the jury’s verdict was not one that ought to have been “seriously contemplated” by the plaintiff. The difficulty with this position is that counsel for the plaintiff took no objection to the charge, which instructed the jury that it was open to them to dismiss the plaintiff’s claim if they were not satisfied that the plaintiff had established liability on the part of the defendant Priscilla C. Jang. The jury’s verdict could not in these circumstances be said to be perverse, as counsel for the plaintiff argued before judgment was entered.
 I do not accept the plaintiff’s submission that the jury’s verdict is difficult to accept on the evidence before it.
c) Relative Financial Circumstances of the Parties
 The plaintiff asserts by affidavit that her annual income is between $33,000 and $34,000 per year, and that her share of the expenses in the apartment she shares with a friend together with her own monthly expenses amount to approximately $2000 per month.
 The plaintiff lists a debt to her lawyers of some $29,000 as well as other debts of a further $35,000, and swears that “If I am obliged to pay ICBC’s defence costs for this trial, I will be unable to meet my ongoing expenses and debts.” I have no evidence of the extent to which the plaintiff could arrange financing to address her position, but I do not accept that her present debts or even greater financial obligations could not be accommodated by financing. While the defendants argue that the plaintiff’s obligations to her counsel are a result of her refusal to accept their offer to settle, I do not see that the cause of the plaintiff’s debts is a relevant consideration. The fact is that she is indebted to her counsel.
 There are, however, two difficulties with the plaintiff’s position on this factor. First, she argues that her financial circumstances are difficult. This alone is insufficient to meet Rule 37B(6)(c).
 Second, she places her financial position against that of ICBC, as opposed to that of the defendants.
 While I accept that it is likely that most drivers in British Columbia are insured by ICBC, the wording of subrule 37B does not invite consideration of a defendant’s insurance coverage. There may be good policy reasons for this. Insurance coverage limits with ICBC are not universal, and will vary from insured to insured. Certain activities may result in a breach of an individual’s insurance coverage, or the defence of an action under a reservation of rights by ICBC. A plaintiff will not and likely should not be privy to such matters of insurance coverage between a defendant and ICBC.
 The contest in this case was between the plaintiff and the defendants, and the insurance benefits available to the defendants do not, in my view, fall within the rubric of their financial circumstances, any more than any collateral benefit entitlement that a plaintiff may have would affect that person’s financial circumstances for the purpose of determining their loss.
 There is no evidence before me as to the defendants’ financial circumstances. What little I do know of the circumstances of the defendant Pricilla C. Jang is that, at the time of the accident, she was driving her mother’s motor vehicle, and that she was employed as a parts delivery person for a motor vehicle dealership. That does not suggest to me that her financial circumstances are appreciably different from those of the plaintiff.
d) Other Factors
 No submissions were made by the plaintiff suggesting that there are other factors in this case that should influence the appropriate cost option to be employed in this case.
 While I am not prepared to find that the plaintiff’s failure to accept the defendants’ offer to settle was unreasonable, I am equally unprepared to accept that the jury’s verdict was unreasonable. I am also unprepared to conclude that there is any significant disparity in the financial circumstances of the parties so as to invoke subrule 37B(6)(c).
 What then, of the function of the Rules to encourage or to deter the types of conduct referred to by Cumming J.A. in Skidmore? As mentioned above, the plaintiff was prepared to take a considerable gamble to achieve a significant award. Had she succeeded, she doubtless would have sought an order for double costs against the defendants following her offer to settle.
 I conclude that the refusal of an award of double costs from August 11, 2008 would completely ignore the important deterrent function of the Rules. The factors set out in subrule 37B(6) do not, in this case, persuade me that such a result would be appropriate. I find that the defendants are entitled to an award of double costs beginning a reasonable period of time after which the plaintiff could consider their offer. That period I find commenced on August 18, 2008, seven days after the defendants’ offer to settle.
 The defendants are entitled to recover their taxable costs and disbursements of this action from its commencement until August 18, 2008 pursuant to Rule 57(9). Those costs will be taxed at Scale B.
 The defendants are entitled to double costs commencing August 18, 2008 and to their disbursements as incurred after August 18, 2008. The disbursements will be allowed only in the amount incurred, and not at a double rate.