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Defendant Fails "To Recognize The 'Capital Asset” Approach"; Ordered To Pay Double Costs

Written by admin on . Posted in BCSC Civil Rule 9, Uncategorized.

Update August 5, 2015 – The below damages for Diminished Earning Capacity were overturned by the Court of Appeal and a new trial was ordered on the issue.
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Reasons for judgement were released today by the BC Supreme Court, Penticton Registry, ordering a Defendant to pay double costs for refusing to accept a bested pre-trial formal settlement offer.  In reaching this result the Court was critical in the Defendant’s failure to appreciate the ‘capital asset’ approach in assessing diminished earning capacity awards.
In this week’s case (Ostrikoff v. Oliveira) the Plaintiff was injured in a 2009 collision.  Prior to trial the parties exchanged a variety of formal settlement offers with the Plaintiff’s last offer coming in at $325,000 and the Defendant’s last offer being $100,000.  The matter proceeded to trial where damages of over $550,000 were assessed.  The Plaintiff was awarded post offer double costs and in finding the Defendant should have accepted the Plaintiff’s offer the Court provided the following comments:
[11]         The plaintiff, on the other hand, marshalled a combination of both expert and lay evidence.  The essence of the plaintiff’s case was that the plaintiff was involved in unique and highly skilled work which had a significant physical component and that the plaintiff’s chronic pain and physical impairments threatened both his business and his sole means of livelihood.  The uncontradicted expert evidence was that the plaintiff was not a suitable candidate for retraining. 
[12]         All of this was known to the defendant well before the trial began.  Expert reports had been delivered from orthopaedic surgeons, treating physicians, a functional capacity evaluator, a vocational consultant, a cost of care consultant, and an economist (regarding future loss multipliers).  No rebuttal reports were prepared by the defendants and much of the evidence was uncontradicted at trial.
[13]         Plaintiff’s counsel provided the defendant with a detailed rationale for the quantum of the first settlement offer in the amount of $325,000 made on March 8, 2013.  The nature and structure of the claim became obvious at that point, if it had not already been obvious beforehand.  Service of the plaintiff’s expert reports would have alerted the defendant to the possibility of a very significant claim being presented and possibly succeeding at trial. 
[14]         The only submission made by the defendant in defence of its refusal to accept the plaintiff’s settlement offer is that there was an absence of any “documented pecuniary loss” and of any expert or other reliable evidence supporting any pecuniary loss, whether past or future.  The submission, and indeed the defence’s entire approach to both the case and the settlement offer, fails to recognize the “capital asset” approach to assessment of damages for both past and future earning capacity in circumstances where the financial loss is not easily measurable. 
[15]         In my opinion, the February 17, 2014 settlement offer made by the plaintiff was reasonable and one that ought reasonably to have been accepted by the defendant before the commencement of trial.  A careful assessment of the strength of the plaintiff’s case on the eve of trial, having regard to the expert reports and the proposed lay testimony, as well as the principles of damages assessment in chronic pain cases involving potentially significant loss of capacity would have, and should have, resulted in a conclusion that a recovery at trial of sums in excess of the offer was a realistic prospect.  Instead, relying almost exclusively on tactics limited to cross-examination and putting the plaintiff to strict proof of his case, the defendant chose to proceed to trial to see what might happen.  Defendants are free to litigate the case in such fashion as they consider appropriate.  But as stated in Hartshorne, above, “[l]itigants are to be reminded that costs rules are in place to encourage the early settlement of disputes by rewarding the party who makes a reasonable settlement offer and penalizing the party who declines to accept such an offer”.
[16]         For these reasons, I exercise my discretion to award party and party costs to the plaintiff under Scale B up to February 17, 2014, and double that scale for all steps taken in the proceeding thereafter.
 

$130,000 Non-Pecuniary Damages For Widespread Chronic Pain

Written by admin on . Posted in ICBC Chronic Pain Cases.

Adding to this site’ archived chronic pain damage assessments, reasons for judgement were released this week by the BC Supreme Court, Kamloops Registry, assessing damages for a low back injury which required surgery along with ‘widespread’ chronic pain symptoms.
In today’s case (McLeod v. Goodman) the Plaintiff was injured in a 2008 collision.  Liability was admitted by the Defendant.  The collision caused a wide variety of injuries which impacted the Plaintiff to the time of trial and were expected to continue indefinitely.  In assessing non-pecuniary damages at $130,000 Madam Justice Donegan provided the following reasons:
[125]     In this case, temporal reasoning is very compelling. I have found Mrs. McLeod’s lower back injury required surgery as a direct result of injuries she suffered in the accident. She had normal bladder sensation and function before the surgery and a loss of it nearly immediately thereafter. With no prior problems in this area, as a matter of common sense, I conclude that the low back surgery is more likely than not to have caused the bladder problems. As the surgery would not have been required if not for the defendants’ tortious act, the plaintiff has established a substantial connection between her bladder condition and the negligence beyond the de minimus range.
[126]     In summary, I am satisfied Mrs. McLeod has established that the following injuries were caused by the defendants’ negligence:
1)    Musculoligamentous strain to the cervical spine;
2)    Chronic headaches;
3)    Shoulder pain;
4)    Musculoligamentous strain to the lumbar spine and lumbar radiculopathy causing pain to her lower back, hips, groin and right leg, resulting in surgical intervention;
5)    Partial loss of bladder sensation and functionality;
6)    Widespread chronic pain syndrome; and
7)    Emotional pain in the form of low mood and feelings of low self-worth.
[127]     These injuries are permanent in nature and expected to worsen over time, although there is some hope treatment may reduce pain or increase her ability to cope with it…
[138]     Prior to the accident, Mrs. McLeod was an energetic, hardworking, 43-year-old, single mother of two. She could handle any challenge life presented her. She had no physical or emotional limitations preventing her from working in her chosen field, from maintaining a nice home and yard, from supporting and spending time with family and friends and engaging in a variety of recreational pursuits.
[139]     The accident has taken much from Mrs. McLeod. As a result of her injuries and their aftermath, she can, I think, be best described as a shell of her former self. She suffers severe, daily pain throughout her body for which she is only granted temporary reprieve when she endures painful injections. She requires constant pain medication. Mrs. McLeod must adjust her life to deal with this pain, frequent headaches, fatigue, occasional incontinence and weakness in her leg. Her emotional suffering is due to her inability to no longer contribute to her family, to the workforce and to society. Her relationships with her family are negatively affected. Her social and recreational life is non-existent. In short, her enjoyment of all aspects of her life has been significantly reduced.
[140]     Considering all of the case authorities provided, I find the Fox decision the most useful, although I do find Mrs. McLeod’s losses to be more significant than the plaintiff’s in that case. Ms. Fox did not require surgery and was able to work at least part-time.
[141]     I find the appropriate award for non-pecuniary damages in this case is $130,000.00.
 

Costs Threats Against Expert Witnesses An Abuse of Process

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In the first case I have seen addressing this issue, reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, striking out language in correspondence between lawyers as an abuse of process.
In today’s case (Walker v. Doe) the Plaintiff objected via letter sent to Defence counsel to the admissibility of Defense expert reports, and as part of the “boilerplate” objections Plaintiff’s counsel noted that “we shall seek sanctions personally against [expert’s name], including but not limited to special costs“.
In finding that the Rules of Court allow a Judge to strike out language in such a letter Mr. Justice Butler reasoned as follows:
[7]             Letters sent by counsel to provide notice of objection to the admissibility of an expert report are required to be served pursuant to R. 11-6(10). The notice must set out “any objection to the admissibility of the expert’s evidence that the party receiving the report … intends to raise at trial.” The notice required by the Rule is a document mandated by the Rules in which a party must set out their position for trial.
[8]             Rule 9-5(1) is not limited to pleadings but also applies to petitions and “other documents”. Document is defined in R. 1-1(1) in broad terms. There is no doubt the notice required under R. 11-6(10) is a document pursuant to that definition. However, the word must be interpreted ejusdem generis in the context of the phrase, “pleading, petition or other document”. Applying that aid to interpretation, I conclude that “other document” refers to documents which are required by the Rules to formally set out a party’s position, claim or defence. The notice under R. 11-6 (10) is such a document.
In finding the costs threat amounted to an abuse of process the Court provided the following reasons:
[15]         In conclusion, expert witnesses play an important role in the litigation process. When an expert is properly qualified within an area of expertise and the expert’s opinion evidence, which is not otherwise excluded, meets the essential criteria of relevance and necessity in assisting the trier of fact, it can be admitted to assist the court: R. v. Mohan, [1994] 2 S.C.R. 9. The Rules establish a process which provides adequate notice of expert opinions and sets up a way to challenge admissibility. There is no need to introduce into the process, by way of boilerplate language in notices under R. 11-6(10), threats of claims against experts for special costs. As I have already noted, it is entirely unnecessary. Further, it has the potential to frustrate the litigation process because it may discourage the participation of expert witnesses. In addition, and contrary to the intent of the new Rules, it would seem to place the expert in an adversarial position.
 

Why You Shouldn't "Steal" and Burn Your Own Car

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It should go without saying that stealing and burning your own vehicle with a view to making an insurance claim is not a good idea.
Reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, dealing with a vehicle theft/fire claim.  In last week’s case (Singh v. ICBC ) the Plaintiff purchased a 2007 E-350 Mercedes.  On October 24, 2009 the vehicle was found some 15 minutes from the Plaintiff’s home and “had just been ignited with fire” with flames “shooting ten to twenty feet in the air.”  The luxury vehicle was rendered a total loss.
The Plaintiff made a claim to ICBC to recover damages for loss of the vehicle but they were suspicious of the circumstances and denied the claim.  The Plaintiff sued for damages seeking over $94,000 in replacement cost coverage.
In denying the claim the Court found that the Plaintiff “made a key set available to someone so the Mercedes could be driven to the scene of the fire” and further that the Plaintiff conspired in the destruction of the vehicle with Madam Justice Hyslop finding that “he knew in advance what would happen to the Mercedes“.
In dismissing the claim the Court provided the following reasons:
[122]     Constable Gibo stated that Mr. Singh was not surprised or did not express shock that the Mercedes was on fire, nor did he ask for any details as to the event. He did not care. I find that is because he knew in advance what would happen to the Mercedes.
[123]     I do not accept that the Mercedes was stolen. Mr. Singh’s evidence was that when he purchased the Mercedes he received two sets of keys to operate it. He claims that he mislaid one set of keys, but was very clear that the keys were not lost or stolen. He refused to say when one set of keys was mislaid.
[124]     Expert evidence is before the court that categorically states that Mr. Singh’s Mercedes could not be driven without the keys. The opinion of Mr. Seroogy is that in order to produce a new key, it requires the proper equipment and people with extensive training and experience “in multiple electronic disciplines”. Mr. Seroogy said that the process is delicate and time consuming and could not have been performed within the timeframe between when the Mercedes was last seen and the time when it was found burning. I accept this evidence.
[125]     Mr. Crowe found that there was damage to the right side of the Mercedes. I find that this was intended to cover up the fact that the Mercedes was driven to the site of the fire with a key.
[126]     I find that the Mercedes was driven to the scene of the fire using the keys. The Mercedes was then set on fire.
[127]     The fact that it is unknown who participated in the theft and the destruction of the Mercedes by fire, is of no consequence.
[128]     In his testimony, Mr. Singh completely resiles from his pleadings in which he alleges theft. Mr. Singh repeatedly testified that he was not claiming the Mercedes was stolen, but rather that it was burned. Nothing in his pleadings mentions that the Mercedes was burned.
[129]     In his Claim File Report (by telephone), Mr. Singh claimed that the Mercedes was stolen. No mention was made of it being burned. In his statement of November 4, 2009, he refers to the fire. In his Proof of Loss, he swears that the cause of his loss was by “burned”. However, whether it was stolen or not, it could not be at the location of the fire without being driven there with the use of one of the sets of keys issued to Mr. Singh when he purchased the Mercedes.
In addition to dismissing the claim the Court ordered that the Plaintiff pay the Defendant’s costs which I would ballpark at $20,000 – $30,000.  So, the end result is no vehicle, no insurance payout and a significant debt to ICBC.
 

Excessive Delay Strips Defendant of Double Costs Entitlement

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9. 50 Comments on Excessive Delay Strips Defendant of Double Costs Entitlement

In what I believe is the first case addressing this factor, reasons for judgment were released today by the BC Supreme Court, Kelowna Registry, looking to the timeliness of  a costs application as a factor in deciding costs consequences following a trial with a formal settlement offer in place.
In this week’s case (Bay v. Pasieka) the Plaintiff was involved in a collision and sued the Defendant for damages.  The case had “frailties” and prior to trial the Defendant made a nominal formal settlement offer of $1.  The Plaintiff rejected this offer and proceeded to trial.  A jury dismissed the claim.  The Defendant sought double costs and Mr. Justice Butler would have awarded these but did not due to excessive delay in bringing the Defendant’s application.  In reaching this conclusion the Court provided the following reasons:
 [1]             On January 27, 2010, following a two-day trial, the action of the plaintiff, Laurie-Ann Bay, against the defendant, Todd Pasieka, was dismissed. I ordered that the issue of costs be adjourned with liberty to the parties to apply to the court if an agreement could not be reached. Three-and-a-half years after the trial, the defendant now applies for costs. The defendant seeks costs at Scale B and double costs from November 14, 2006, the date an offer to settle was made, to the present. The plaintiff says that each party should bear their own costs…
[30]         While some delay is understandable, the delay in this case far exceeded a reasonable limit. Excessive delay is, of course, contrary to the object of the Rules as set out in Rule 1-3(1): to secure “the just, speedy, and inexpensive determination of every proceeding on its merits.” By waiting so long to deal with the issue of costs, the defendant undoubtedly increased the cost of dealing with the issue for both parties and delayed the final resolution by years. It would be wrong to accept the delay without imposing any consequence on the defendant. It is in the interests of the court and of the parties to resolve disputes as soon as they arise to promote efficient use of court time. The inordinate delay in bringing this application is not acceptable.
[31]         In Xerox, Finch J. found that a party alleging prejudice has the evidentiary burden of showing that prejudice. While the evidence presented does not establish significant prejudice, the plaintiff has established that the defendant’s delay in pursuing a costs award caused her and her counsel difficulty in responding to the application in as fulsome a manner as she would have been able to had the defendant sought costs soon after trial. Similarly, it is much more difficult for the court to consider the costs claim so long after the trial has concluded.
[32]         I find that the defendant has not provided a suitable reason for the inordinate delay in bringing this application. The plaintiff has been prejudiced as a result of this delay and the court has been inconvenienced.
[33]         Without the delay in the application, I would have found that the defendant was entitled to double costs from the date of Mr. Pasieka’s examination for discovery. The plaintiff should have known from that time forward her claim was weak and should have accepted the offer. However, given the inordinate delay, I decline to make that order. Instead, I order that the defendant is entitled to costs at Scale B throughout.
 

$70,000 Non-Pecuniary Assessment for "Modest Soft Tissue Injuries, Knee Pain, Headaches and Anxiety"

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Adding to this site’s database of BC non-pecuniary damage decisions, reasons for judgement were released today by the BC Supreme Court, Victoria Registry, assessing damages for a lingering injuries from a motor vehicle collision.
In today’s case (Land v. Di Maddalena) the Plaintiff was involved in a collision when he was 8 years old.  He was 17 by the time of trial.  Fault was admitted by the offending motorist.  The Plaintiff suffered a variety of injuries including soft tissue injuries, knee pain, headaches and anxiety.  While he made a good recovery and was able to actively participate in physical sports some symptoms were expected to linger into the future.  In assessing non-pecuniary damages at $70,000 Mr. Justice MacKenzie provided the following reasons:
[116]     A fair assessment of damages is difficult in the present case because of the passage of time since the accident, the changes in symptomology over many years, the fact that Spencer is currently 17 years old and not yet fully grown or mature, the possible relationship between his present physical condition and his participation in strenuous sports such as basketball, tennis, soccer, lacrosse and football, especially when Spencer told me he “likes physical contact.” The fact that the medical evidence in this case is very dated has also complicated this analysis. In these circumstances, it is no surprise the evidence and medical opinions as to Spencer’s future physical condition are somewhat equivocal. The extent to which Spencer’s present deficits will affect him in the future is difficult to predict.
[117]     With the above factors in mind, and having regard to the totality of the circumstances, I am satisfied that because of the accident, Spencer suffered modest soft tissue injuries, initial knee pain, headaches and anxiety. These have affected his lifestyle to a certain degree, but have now significantly resolved. Fortunately, they have had a relatively modest impact on his activities over the last two years. In my view, a fair and reasonable award for non-pecuniary damages is $70,000.
 

Another Example of the Unintended Consequences of Personal Injury Trials

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When an injury claim proceeds to trial the case becomes one of public record.  The public nature of the proceedings can lead to unintended consequences such as creating a papertrail for Revenue Canada to go after undeclared past earnings.
Another unintended consequence of the open trial process was highlighted in reasons for judgement released this month by the BC Supreme Court, New Westminster Registry.  In the recent case the Plaintiff was injured in a 2007 collision.  He missed some time from work initially but returned to work in 2008 and had “been performing the work duties assigned to him” since that time.   The Plaintiff sought damages for diminished earning capacity and in support of this claim tendered medical evidence speaking to his physical limitations.  When his employer learned of this the Plaintiff was suspended (in this case temporarily) from his employment.  The reasons for judgement highlight this consequence as follows:
[122]     The evidence at trial was clear that the plaintiff has been performing the work duties assigned to him since his return to work in 2008.  However, on the first business day following completion of the trial, the plaintiff was suspended from his duties, without pay, apparently because the City of New Westminster had concerns about the plaintiff’s fitness for duty as a firefighter on the basis of its understanding of the evidence the plaintiff led at trial.  By letter dated June 24, 2013, Chief Armstrong informed the plaintiff as follows:
At the trial and in speaking to legal counsel for yourself and ICBC I learned several things that caused me concern.  First, apparently considerable medical evidence has been tendered at the trial as evidence of your inability to perform the full range of duties required by your position.  Second, you are apparently seeking the recovery of considerable damages as a result of the accident and prior to being subpoenaed, we were not aware that these proceedings had been instituted by you.
…This is to advise that you are being held out of service without pay until you are able to prove to us that you are in fact fit for duty.  We are formally requesting you provide copies of all medical evidence tendered as exhibits at your trial so that we may assess your fitness for duty as expeditiously as possible.
 

A Balanced Costs Award Following Jury Trial

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In an illustration that not all trial ‘losses’ trigger catastrophic costs consequences, reasons for judgement were released today by the BC Supreme Court, New Westminster Registry, ordering balanced costs consequences.
In this week’s case (Desharnais v. Parkhurst) the Plaintiff was involved in two vehicle collisions.   Prior to trial the Defendants provided two formal offers, the first at $50,000 the second at $75,000.  The Plaintiff, who was seeking in excess of $1 million rejected both offers and proeeded to trial.  Following a thirteen day jury trial the Plaintiff’s damages were ultimately assessed at $30,100.
Both parties had medical evidence to justify their respective positions, however, the Court noted, some of the opinions of the Plaintiff’s experts were “highly suspect”.
The Defendants sought substantial costs having bested their formal settlement offers. The Court noted a more appropriate result would be to award the Plaintiff costs up to the date of the second formal offer and to have the parties bear their own costs thereafter.  While such an order still has significant financial consequences for the Plaintiff it is far less sever than ordering payment of the Defendant’s costs. In reaching this decision Mr.Justice Saunders provided the following reasons:
[42]         On the whole, I do not consider either the First or the Second Offer as having reflected, objectively speaking, a genuine attempt at compromise. I find them to hae been more reflective of what the Applicants could reasonably have hoped to achieve if all or substantially all of the issues were resolved in their favour. I am not dissuaded from taking this view by the fact that the jury awarded even a lesser amount; I do not think it is unfair to counsel or to the jury for me to say that the jury’s decision was considerably less than what reasonably prudent counsel would have regarded as a “win” for the defence. I cannot find that either offer ought reasonably to have been accepted by the plaintiff.
[43]         As Goepel J. stated in Ward, that is the beginning, not the end of the analysis. The most basic principle underpinning the Rules relating to costs is that costs of a proceeding are to be awarded to the successful party (R. 14-1(9)). This expectation is intended to promote sensible conduct throughout court proceeding; it exists notwithstanding the broad judicial discretion to depart from the principle, which is generously built into the Rules.
[44]         In this case, the jury found that the plaintiff had successfully proven some damage. But for the offers to settle, he would be entitled to his costs. Having regard to the factors set out in Rule 9-1(6), including giving some weight to the plaintiff’s financial circumstances, I do not find that the offers were so substantial that the Applicants ought to be entitled to any indemnification against their own costs. The plaintiff’s position was not completely lacking in merit. It was not frivolous. However, the fact that the settlement offers exceeded the judgment amount cannot be ignored. The Applicants were forced to incur the expense of a trial which they were willing to avoid by paying the plaintiff a not insubstantial sum, a sum which ended up being considerably greater than the damages the plaintiff was judged to be entitled to. It would be unfair to require the Applicants to indemnify the plaintiff for the costs of advancing a claim that was ultimately judged to be greatly overvalued.
[45]         I find that the plaintiff is entitled to his costs up to the date of delivery of the Second Offer. The parties will bear their own costs thereafter.
 
 

Supplementary Expert Reports Bound By Document Disclosure Duties

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Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, addressing the scope of document disclosure when dealing with supplementary reports.  In short the Court held the same duties apply to supplemental reports as to ‘original’ reports, namely to identify the documents relied on by the expert in forming their opinion.
In this week’s case (Amini v. Khania) the Defendant’s expert authored a supplemental report without listing all the documents relied on.  The Defendant argued the Rules for listing all documents relied on in expert reports do not apply to supplemental reports.  Mr. Justice Burnyeat disagreed and in doing so provided the following reasons:
 [18]         The submission of counsel for the Defendants is that it is not necessary in a supplementary report to include a list of every document relied upon by the expert providing a supplementary opinion.  I am satisfied that the failure of Dr. Dommisse to list the documents that he relied upon is not “cured” by the provisions of Rule 11-6(7).  While it is clear that supplementary reports have a narrow scope and purpose and are only intended to set out where and how a previous opinion has changed in a material way, there is nothing in Rule 11‑6(7) which would allow me to conclude that the filing of a supplementary report can circumvent the clear and mandatory requirements of Rule 11‑6(1)…
[21]         The very purpose of Rule 11‑6 is that all expert reports should be tendered in a way that neither side can be ambushed or surprised at trial…
[23]         A supplementary expert report remains an expert report.  It must comply with the rules set out in Rule 11‑6(1).  Otherwise, the supplementary opinion would be based on unknown facts and assumptions.  It would be impossible to give the necessary weight to a supplementary expert opinion as it would be impossible to compare the facts upon which that opinion was based with the findings of fact ultimately made by the Court.  The provision of a supplementary report which does not comply with Rule 11‑6(1) should not be used to circumvent the requirement that no party will be caught by surprise by an expert report.
 

"It Is Contrary to Public Policy to Permit Contracts out of Liability for Damages for Personal Injuries" in BC Vehicle Collision Cases

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Important reasons for judgment were released today by the BC Court of Appeal confirming, in divided reasons, that it is contrary to public policy to allow a vehicle owner/operator to contract out of liability for damages for personal injuries.
In today’s case (Niedermeyer v. Charlton) the Plaintiff embarked on a tour to Whistler  BC to participate in various activities including a zip lining experience.  Transportation to and from Whistler was provided the by the Defendant.   During the return trip the bus driver “allowed the bus to get too close to the edge of the road and…the bus went off the road and over the edge“.  The Plaintiff suffered severe injuries including a fractured neck, ribs and vertebra.
Prior to the trip the Plaintiff signed a waiver agreement which covered activities such as ziplining but also included a clause covering “travel to and from the tour areas”.  The Defendant was, like most BC motorists, insured with ICBC and the Plaintiff sued for damages.  The Defendant admitted he was negligent but the waiver was upheld at trial dismissing the plaintiff’s claim.  In overturning this decision the majority of BC’s Court of Appeal provided the following reasons:
[114]     In my view, the ICBC regime is intended as a benefit for the public interest just as is human rights legislation. It would be contrary to public policy and to a harmonious contextual interpretation of the legislation to allow private parties to contract out of this regime. As such, to the extent that the Release purports to release liability for motor vehicle accidents it is contrary to public policy and is unenforceable. The judge erred in finding that the public policy interest exemplified in a compulsory universal insurance scheme was incapable of defeating society’s interest in freedom of contract.