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Costs Following Unsuccessful "Considerable Gamble To Achieve A Significant Award"

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9, Uncategorized.

Update – July 13, 2015 – the below decision was overturned today by the BC Court of Appeal for several reasons and a new trial was ordered.  In reaching this conclusion the court noted it was improper for the Court to make a present value calculation when considering a formal offer to settle.  The Court provided the following reasons:

[53]         I agree with the appellant that the judge erred in adjusting the initial offer to reflect its 2013 value. This approach is not supported in law. As a result, the amount that the appellant was awarded ($51,300) exceeded the formal offer ($50,000) and the judge had no basis to award costs to the defendants pursuant to Rule 9-1(5)(d).

[54]         The trial judge also erred in applying the incorrect standard to determine which party was successful. The appellant was clearly the successful party in the action, as that standard is described in Loft. Though the appellant was not awarded the entire amount in damages that she sought, she established liability under a cause of action – as in Loft, by way of the defendants’ admitting liability and conceding some damages – and she obtained a remedy. The defendants did not obtain a dismissal of her case, either with respect to liability or damages.

[55]         Thus the order for costs could not have been sustained in any event of the appeal.

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Reasons for judgment were released this week by the BC Supreme Court, Vancouver Registry, addressing costs consequences following a jury trial.
In this week’s case (Han v. Park) the Plaintiff was injured in a 1999 collision that the Defendant admitted fault for.  The litigation had a “somewhat tortured history” finally coming to trial in October 2013.    The Plaintiff sought damages of over $2 million.  Following a 14 day trial a jury assessed damages at $51,300.
In 2002 ICBC tendered a formal settlement offer of $50,000.  When coupled with advances paid the offer slightly exceeded the ultimate jury award.  Given the duration of time that passed the Court was also presented with economic evidence adjusting the offer for inflation indicating it was worth about $61,100 in 2013 dollar terms.  In any event the Court was asked to assess costs consequences flowing from this formal offer.  In finding that costs should be used as a remedy where a litigant takes “a considerable gamble to achieve a significant award” the Court ordered the Plaintiff pay the Defendant’s costs from 2004 onward.  In reaching this conclusion Madam Justice Fitzpatrick provided the following reasons:
[69]         Like the plaintiff in Bailey v. Jang, 2008 BCSC 1372, aff’d 2011 BCCA 146, Ms. Han took a considerable “gamble to achieve a significant award” and lost: paras. 22, 38. Given that the majority of the time at trial was spent on her unsuccessful attempt to persuade the jury of her disability, one can only describe her as being substantially unsuccessful at trial. Accordingly, even without the application of Rule 9-1, Ms. Han would have faced meritorious arguments by the defence that a costs award should reflect that result and my conclusions below are also consistent with an analysis in this context.
[70]         She conducted herself in this litigation so as to ignore the considerable efforts of the defendants to gather evidence regarding the extent of her injuries, all at considerable cost to them. The early efforts of the defendants were geared to either provide a proper basis for a negotiated settlement or to provide the necessary evidence for a trial. All the while Ms. Han entirely failed to muster any medical opinion evidence that she either knew or should have known would be needed to support her claims at the end of the day. She refused to respond to any settlement offer until the eve of the trial.
[71]         Ms. Han’s intractable position must nevertheless be considered in the face of the July 2002 offer to settle. By this time, over three years had gone by and one would have thought that she would be in a position to critically consider her position. The offer fully addressed the position of the defendants that no brain injury had occurred. The premise of the offer was not contradicted by any medical opinion evidence obtained by Ms. Han. Even if she had chosen, strangely, to rely on the medical evidence of the defendants, by no later than May 2004, Dr. O’Shaughnessy had emphatically concluded that no disability or brain injury had resulted from the accident.
[72]         In the above circumstances, Ms. Han’s position was not an “honest but … mistaken view” per Fan, nor did she have a “meritorious, albeit uncertain claim” per A.E.
[73]         The defence calls Ms. Han “delusional” and while the remark is uncharitable, it is not far from the mark. Ms. Han has purposely conducted this protracted litigation where there was no basis in the evidence upon which to conclude other than that she had suffered a relatively straightforward soft tissue injury. Despite that, 14 years of litigation has gone by, no doubt at great cost to the defendants and to those who have financially supported this litigation on behalf of Ms. Han.
[74]         I conclude that Ms. Han is entitled to her taxable costs, including disbursements, of the action to May 2004. The defendants are entitled to their taxable costs, including disbursements, from June 2004 which will include this application to determine costs. Both costs awards will be on Scale B.

Revocation of a Formal Settlement Offer "Can Be Oral or Written"

Written by admin on . Posted in BCSC Civil Rule 9, Uncategorized. 179 Comments on Revocation of a Formal Settlement Offer "Can Be Oral or Written"

Reasons for judgement were published last week by the BC Supreme Court, Vancouver Registry, confirming a formal offer to settlement made under the BC Supreme Court Rules can be revoked verbally or in writing.
In last week’s case (Ladret v. Stephens) the Plaintiff was injured in a collision and sued for damages. Prior to trial the Plaintiff made a formal offer to settle for $75,000.  A series of informal offers were then made by the parties before the trial commenced which was ultimately adjourned as no judge was available.   Following the passage of some time defence counsel gave notice that they were accepting the $75,000 formal offer.  The Plaintiff opposed this acceptance arguing the offer was revoked.  Mr. Justice Greyell agreed and provided the following reasons:
[29]         It is my view that that offer was not open for acceptance. It is my view, based on the facts that have been placed before me, that the offer of $75,000 had been withdrawn expressly during the telephone conversation and that the defendants in accepting that offer proceeded to do so on the mistaken belief that the withdrawal of the offer had to be in writing to be effective.
[30]         I am supported in that finding by the following paragraph in an e-mail sent by the defendants to Mr. Gourlay, a portion of which reads:
The crux is your formal did not stipulate an expiration and you did not revoke it. As such, it was open for acceptance by the defendants. As it was drafted, it was open for acceptance up until judgment. Although not required by Rule 9-1, if you intended to revoke your formal you would have to do so in writing.
[31]         The case law is clear that a revocation can be oral or written. The question is whether such revocation is clearly and unequivocally given, citing Janzen v. Janzen, 2011 BCSC 1146, 2011 B.C.J. No. 1605.
[32]         In my view, given the contents of the April 22nd discussion between Ms. Owen-Blas and Mr. Gourlay, it was clear the offer of $72,500 had been revoked, that offer in itself revoking the $75,000 prior offer.

Follow Up Medical Reports After the Passage of Time Are Not "Extravagant" Disbursements

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Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, addressing the reasonableness of multiple physician reports ordered in the course of a personal injury prosecution.
In this week’s case (Zhang v. Heikkila) the Plaintiff was injured in a motor vehicle incident.  In the course of her lawsuit she obtained multiple medical reports.  The first from her GP in 2009.  This report opined on prognosis.   Following this the Plaintiff obtained a report from a physical medicine specialist and as trial neared the Plaintiff obtained an updated report from her GP.  ICBC challenged the reasonableness of these disbursements arguing they were excessive.  District Registrar Cameron disagreed finding these disbursements were properly recoverable.  In reaching this decision the Court provided the following reasons:
15]         In my view, in evaluating whether or not it was necessary or proper to incur these disbursements for the medical legal reports, one must consider more broadly what should be done in the preparation of the Plaintiff’s case.
[16]         To be properly equipped to advise a client on the merits of settlement in circumstances such as existed in this case competent counsel not only has to investigate and assess the liability issue but also consider the likely range of damages.  It would be expected that competent counsel would obtain medical opinions in a timely fashion and that is what occurred in this case.
[17]         Plaintiff’s counsel obtained the first report from the general practitioner approximately two years after the accident and in my view that report was properly obtained at that time.
[18]         The report documented concerns respecting the Plaintiff’s future in terms of her employability and continuing physical limitations resulting from the injuries sustained in the accident.
[19]         After reviewing this report, Plaintiff’s counsel then decided to obtain an opinion from a specialist in physical medicine being Dr. Kiaii, who provided her report dated April 20, 2012.  That report provided an evaluation of the Plaintiff’s level of function, her symptomatic complaints and some prognosis and recommendations to follow.  Again, obtaining that report at that time was, in my view, proper for the advancement of the Plaintiff’s case.
[20]         The last report in issue was an updated report from Dr. Sun dated February 18, 2013.  While that report was obtained about sixteen months following the first report, given the Plaintiff’s ongoing symptoms and the need to have a more current assessment of those symptoms for the purposes of preparing for trial or for settlement, I do not find that it was extravagant or a sign of excessive caution that Plaintiff’s counsel obtained that report when she did.
[21]         Fundamentally, I am keeping in mind that in a situation such as this, the assessing officer ought not to second guess competent counsel doing a competent job because other counsel might have handled the matter differently.
[22]         Having found that these three disbursements were necessarily or properly incurred and as the amount for each of them is not challenged, they will be allowed as presented.

"Only The First Notice of Trial Matters" When Excercising Right to a Jury Trial

Written by admin on . Posted in BCSC Civil Rule 12, Jury Trials.

Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, addressing whether parties to an action joining a matter already set for trial can elect the mode of trial.
In this week’s case (Catalano v. Ogloff) the Plaintiff was injured in two collisions.  The Plaintiff started an action for the first collision, set the matter for trial and filed a jury notice.  The Defendant did not.  A separate action was started for the second collision and all parties filed a consent order providing that the cases be head together on the date already scheduled.  The Defendants in the second action then filed a jury notice.  The Court found this was a nullity.  In striking the Defendant’s jury notice Master MacNaughton provided the following reasons:
[11]         For the following reasons, I have concluded that the defendant’s jury notice is a nullity.
[12]         First, under Rule 12-6(3) of the Supreme Court Civil Rules it is clear that the election of a jury trial is a two-step process. The right is preserved by serving a jury notice but the matter will not be heard by a jury unless and until the jury fees are paid.  A jury trial occurs only if both steps are completed. Thus, the defendant to the second action could not presume that the first action was proceeding to a jury trial.  It is for that reason that all parties to an action independently preserve their election of a jury trial by serving their own jury notice.
[13]         Second, the early cases which established the principal that it is only the first notice of trial which matters, with respect to the election of a jury, arose in the context of trial adjournments. However, that principal has been expanded. I agree with the conclusion of Master Groves (as he then was) in Bumen v. BC Transit, 2001 BCSC 443:
… when a notice of trial has previously been given in one action, without a jury notice being filed, a subsequent consent by the parties to having other actions tried at the same time ought to be treated as an election to have a trial by judge alone in all the actions. In other words, when parties consent to the consolidation of multiple actions they are bound by the mode of trial specified in the notice of trial filed with respect to the first action. …(para. 20)
Master Groves’ reasoning mirrors that of Master Barber in Wright v. Rose (1995), 32 C.P.C. (3d) 319 where he said:
…there is no valid jury notice issued in the first action…it could be argued that the jury notice is valid for the second and third action.  Of course, when actions are tried at the same time they should either be all heard with a jury, or herd by a judge alone.  In my opinion, when the defendants consented…to all three actions being tried at the same time, that was an election to have trial by judge alone. … (para 17)
[14]         In my view, the fact that the plaintiff had delivered a jury notice in the first action does not change the result.  The defendant in the second action could not rely on the plaintiff’s jury notice as that was merely the first stage of the election process and did not guarantee a jury trial (I note that it has since been withdrawn). The defendants to the first action had not delivered such a notice. To ensure his right to a jury trial, the defendant in the second action should have made it a term of his consent to having the matters tried together or, if no consent was forthcoming, he could have delivered a jury notice and then applied in chambers to have the matters heard together with a jury.
[15]         By proceeding the way he did, the defendant to the second action was not at liberty to deliver the jury notice. It is a nullity.

BC Supreme Court Continues to Have Broad Discretion of Costs Awards Following Trial

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14. 53 Comments on BC Supreme Court Continues to Have Broad Discretion of Costs Awards Following Trial

Reasons for judgement were released today by the BC Court of Appeal addressing the discretion of judges in making costs awards following trial under the new Rules of Court.
In today’s case (Lee v. Jarvie) the Plaintiff was involved in a rear-end collision in 2004.  Fault for the crash was admitted.  At trial the Plaintiff sought substantial damages in the range of $800,000.  Much of the Plaintiff’s claim was rejected at trial but damages of just over $50,000 were assessed.
Following trial the Court awarded each party 50% of their costs to be set off against one another and denied many of the Plaintiff’s disbursements.  The Plaintiff appealed arguing the Court did not have the authority to make such a costs order under the new rules of Court.  The BC Court of Appeal disagreed and found that a trial judge’s discretion with respect to costs is “at least as broad” as it was under the former rules.  In reaching this decision the Court provided the following reasons:
[37]        Interpreting Rule 14-1(15) as only allowing costs to be awarded in respect of specific procedures would run afoul of the principle that Newbury J.A. identified in the opening of her reasons for judgment inGreater Vancouver Regional District v. British Columbia (Attorney General), 2011 BCCA 345:
[1]        One of the well-known rules that guide Canadian judges in the interpretation of statutes is that wherever possible, the court should strive to give meaning and effect to every word used in an enactment. As stated in Maxwell on the Interpretation of Statutes (12th ed., 1969), “It is a principle of statutory interpretation that every word of a statute must be given meaning: ‘A construction which would leave without effect any part of the language of a statute will normally be rejected.” (See also Communities Economic Development Fund v. Canadian Pickles Corp. [1991] 3 S.C.R. 388 at 408; R. v. Kelly [1992] 2 S.C.R. 170 at 188; Hosseini v. Oreck Chernoff 1999 BCCA 386, 65 B.C.L.R. (3d) 182, at para. 27.).
[38]        The words “application” and “step” cover all procedural fragments of a proceeding. If “matter” were intended to be confined to a procedural event in litigation, it would cover no ground not already covered by “application” and “step”. I am therefore not persuaded that a “matter” must be a discrete procedure.
[39]        In my view, the canons of construction referred to by the plaintiff do not cast doubt on the conclusion that Rule 14-1(15) allows a judge to award costs in respect of a discrete issue in litigation.
[40]        I am satisfied that the discretion to award costs with respect to an issue in a proceeding is at least as broad under Rule 14-1(15) as it was under former Rule 57(15). Under that rule, the discretion was governed by the principles discussed by Finch C.J.B.C. in Sutherland v. Canada (Attorney General), 2008 BCCA 27 at paras. 30 and 31:
[30]      British Columbia v. Worthington (Canada) Inc. is the leading case with respect to the application of Rule 57(15). It affirms that under Rule 57(15) the Court has full power to determine by whom the costs related to a particular issue are to be paid. As Esson J.A. states in Worthington, the discretion of trial judges under Rule 57(15) is very broad, and must be exercised judicially, not arbitrarily or capriciously. There must be circumstances connected with the case which render it manifestly fair and just to apportion costs.
[31]      The test for the apportionment of costs under Rule 57(15) can be set out as follows:
(1) the party seeking apportionment must establish that there are separate and discrete issues upon which the ultimately unsuccessful party succeeded at trial;
(2) there must be a basis on which the trial judge can identify the time attributable to the trial of these separate issues;
(3) it must be shown that apportionment would effect a just result.
[41]        The trial judge explicitly addressed each of the three factors in Sutherland, and I am substantially in agreement with his analysis.
[42]        The issues upon which he awarded costs to the defendants were distinct issues in the litigation. While I acknowledge the appellant’s argument that there was some minor overlap between evidence going to general damages and evidence going to loss of income, this did not prevent the issues from being “separate and discrete” issues in the litigation. They were appropriately compartmentalized by the judge.
[43]        The judge identified the time attributable to the separate issues at trial at paragraphs 68-71 of his costs reasons. There is no basis for interfering with his findings in those paragraphs.
[44]        Finally, on the issue of whether the costs award is a “just result”, the trial judge comprehensively dealt with problems with the evidence in his trial judgment. He further dealt with the factors that led to the length of the trial in his costs judgment. The trial judge identified the factors that led him to find his costs award to be a just result. The reasons are cogent, and I would not interfere with his decision.

ICBC's Refusal To Negotiate Without Litigation Triggers Costs Award

Written by admin on . Posted in BC Supreme Court Costs Cases.

Reasons for judgement were released last week by the BC Court of Appeal ordering ICBC to pay costs after the settlement of a matter following trial.
In last week’s case (Krohn v. Weidner) the Plaintiff was injured in a collision and sued for damages.  Following trial the Plaintiff ” immediately identified some areas of concern” and tried discussing these with ICBC.  ICBC refused to address these issues stating that “no discussions concerning the amount of the judgment without an appeal first being filed.”
The Plaintiff appealed and the parties eventually settled the outstanding issues.  The Plaintiff sought costs but ICBC refused to agree to these arguing each party should bear their own costs of the appeal.  The BC Court of Appeal ultimately ordered that ICBC bear the costs of the appeal and in reaching this conclusion provided the following reasons:
[5]           The appellant seeks costs of the appeal. The respondent, on the costs question, says that this is a case for an order that each party bear their own costs, consistent with Olney v. Rainville, 2010 BCCA 155, because this is a case, says the respondent, of divided success.
[6]           From what we have been told, it is apparent that the only route for the appellant to recovery of the undisputed disbursements as special damages was by pursuing this appeal. Accordingly, in our view, this is not a case that justifies departing from this Court’s usual rule that the party successful on an appeal recover his or her costs.

Court Largely Rejects Claim of Plaintiff Who "Attempted to Coerce (Witnesss) To Give False Evidence"

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Plaintiff credibility is integral to prosecutions involving chronic soft tissue injuries. If a Plaintiff’s credibility is successfully attacked the underlying claim can be impacted accordingly.  Reasons for judgement were released this week by the BC Supreme Court, Nelson Registry, demonstrating this.
In this week’s case (Harshenin v. MacLeod) the Plaintiff was involved in a significant rear end collision in 2008.  The Defendant admitted fault for the crash.  The Plaintiff alleged the crash caused long standing injuries which forced him into early retirement.  The Plaintiff sought damages of over $470,000.  The Court, however, had serious concerns about the plaintiff’s credibility and largely rejected his claim.  In awarding less than 10% of the damages sought Mr. Justice Cole provided the following comments about the plaintiff’s credibility:
35]         At the same time the plaintiff was claiming, since the date of the accident to the date of trial, that he spent approximately $36,162.29 on out-of-pocket expenses for transportation, accommodation, meals and massage therapy as a result of the accident. Many of the out-of-pocket expenses were shown to be either not related to the accident, excessive, or lacked proper documentation.
[36]         For instance, the plaintiff would claim massage therapy while he was in Lumby/Vernon, visiting his girlfriend, and then staying in a hotel and charging meals for both himself and his girlfriend. He failed to provide documentation in respect to the massage therapy. He travelled from Castlegar to the Lumby/Vernon area on February 12, 2008, which is a 4 ½-5 hour drive; he also travelled to the Lumby/Vernon area to visit his girlfriend and for a massage on March 13, 22, 31, April 10, and 30. In the latter part of May he hauled his fifth-wheel trailer to Vernon which took approximately 8-9 hours and then went to Kamloops with his girlfriend to purchase a new fifth-wheel trailer. What is most telling is that, although he said the massage therapy was somewhat of a unique nature that was provided to him by the individual in Lumby, those trips ceased when his relationship with his girlfriend was terminated.
[37]         The plaintiff also claimed receipts for meals for two people in Howe Sound and Squamish on two separate occasions but could not explain the purpose of those trips, and there was no documented evidence that he was there for a medical purpose. There is also a group of three receipts, undated, that he claims for, but has no idea what the receipts represent. When asked why he kept receipts for food and hotel and not for massage therapy, the plaintiff gave the unbelievable answer that, “I was so relaxed I forgot to get receipts”…
[49]         I was impressed by Ms. Cymbal as a witness. Her evidence is internally consistent; her evidence is supported by her Employment Insurance claim forms that were filed in these proceedings. I am satisfied Ms. Cymbal still, in her own way, likes the plaintiff. She appears to be a very forgiving person and I am satisfied that she was forthright and honest. I therefore accept her evidence and reject the evidence of the plaintiff and Darren when it conflicts with her evidence. I am satisfied that the plaintiff has attempted to coerce her to give false evidence with respect to his claim. I am satisfied that he sold his business to his son because he wanted to retire. His suggestion that he may lose his business and farm is without any factual basis whatsoever. His pattern of travel and spending money for the purchase of vehicles is all inconsistent with his evidence that he was broke or could be foreclosed out of his business and farm. The dishonest receipts that he has attempted to collect on for trips that were clearly unnecessary and for meals that were for him and his girlfriend are consistent with his inability to tell the truth. I am therefore satisfied that the plaintiff sold his business to his son because he wanted to retire and for no other reason…
[55]         I am satisfied that the plaintiff has suffered a mild neck injury along with short term pain and lower and upper back pain, all of which should have, in my view, resolved within 2 months.

Punitive Damages Ordered Against Pub After Bouncer's "Reprehensible" Beating of Patron

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Reasons for judgement were released this week by the BC Supreme Court, New Westminster Registry, awarding damages against a bouncer and the pub that employed him following a beating of an unruly patron.
In this week’s case (Reimer v. Rooster’s Country Cabaret Ltd.) the Plaintiff was physically removed from the Defendant pub after he tried to enter while concealing a beer in his cargo shorts.  Moments later he was “seriously beaten” by the Defendant bouncer and other individuals.   The Plaintiff suffered a variety of injuries which fortunately recovered largely without incident.  Although the Defendant bouncer was charged criminally he was acquitted at the related criminal trial.
Mr. Justice Jenkins found the bouncer liable for the damages and further found the pub vicariously liable for the assault.  In ordering the defendant’s jointly and severally liable to pay punitive damages the Court provided the following reasons:
[97]         The conduct of Mr. Turnau and Mr. Barber in particular, and to a slightly lesser extent the other security staff who either participated in the beating or stood idly by while the beating continued, was unnecessary, totally unacceptable, “high-handed, malicious, arbitrary and reprehensible” to a major degree. Further, compensatory damages in this case are inadequate to compensate Mr. Reimer. They would not provide the defendants with, as Gerow J. put it, their “just deserts”, nor would they serve the objectives of “retribution, deterrence and denunciation” of the defendants’ actions.
[98]         The assault in the parking lot was unprovoked and the entire episode should have ended with Mr. Reimer and Mr. Murchie walking out through the parking lot. It is also particularly objectionable that the beating was carried out in front of several of the patrons of Rooster’s who had proceeded outside and into the parking lot, where, as completely independent witnesses, they were exposed to incredible brutality.
[99]         Considering all of the authorities referred to me on the issue of quantum, I award a sum of $20,000 as punitive damages.
[100]     The award of punitive damages is made against both Mr. Turnau and Rooster’s, as I have found the latter directly liable in addition to being vicariously liable.

Disbursement Interest Claim Fails for Lack of Evidence Proving Necessity

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While the law in BC presently does allow interest on disbursements to be recoverable in the right circumstances, a prerequisite for recovery is an evidentiary foundation proving that it was necessary to incur the interest claimed.  Reasons for judgement were released this week by the BC Supreme Court, Kelowna Registry (Babb v. Doell) rejecting such a claim due to a lack of evidence.  In reaching this decision Master McDiarmid provided the following reasons:
[11]         A claim for interest by a party entitled to costs might in some circumstances be characterized as necessary, for example, in a situation where the incurring of disbursements such as filing fees or daily hearing fees could only be done by obtaining some funding. Interest could also be a proper disbursement when it was reasonably incurred in the conduct of the proceeding even if, strictly speaking, avoidable. In Franzman, evidence was led which satisfied me that the disbursement interest which the plaintiff agreed to pay to her lawyers as part of a fee agreement was proper and I allowed, as a disbursement, the amount of interest calculated at 6%.
[12]         Most written retainer agreements contain provisions for payment of interest on unpaid accounts. Many retainer agreements contain provisions which are binding as between lawyer and client, for the payment of some disbursements at a rate higher than the rate allowed by registrars when assessing party/party costs. Even in contingency retainer agreements, plaintiffs often agree to and have the means to pay disbursements and do so.
[13]         Unlike in Franzman and in Chandi (Guardian ad litem) v. Atwell, 2013 BCSC 830, the decision relied on by the plaintiff, there is no evidence before me to assist in me establishing either the necessity or the propriety of the plaintiff’s claim for interest.
[14]         As noted above, the onus of proving either the necessity or propriety of disbursements is on the party claiming those disbursements. Absent such evidence, I am unable to make a determination that the interest claimed was either necessary or proper. Accordingly, the claim by the plaintiff for interest is denied.

Mathematical Aids Should Not Be Ignored When Assessing Diminished Earning Capacity

Written by admin on . Posted in ICBC Wage Loss, Uncategorized.

Reasons for judgement were released today by the BC Court of Appeal addressing the proper role of mathematical evidence in assessing damages for diminished earning capacity.
In today’s case (Jurczak v. Mauro) the Plaintiff was injured in a motor vehicle collision.  The Plaintiff was awarded $110,000 in past wage loss at the time of trial for a period that spanned over 6 years.  The Court awarded a figure modestly above this for future losses despite findings that the Plaintiff would be limited for the duration of her working career, some 20 more years.  The Plaintiff appealed arguing the trial assessment was inordinately low.  The BC Court of Appeal agreed and substituted a substantially greater figure.  In addressing the proper role of mathematical/statistical evidence in diminished capacity assessments the BC Court of Appeal provided the following reasons:
[36]        This process is “an assessment rather than a calculation” and “many different contingencies must be reflected in such an award”: Barnes v. Richardson, 2010 BCCA 116 at para. 18. “Ultimately, the court must base its decision on what is reasonable in all of the circumstances. Projections, calculations and formulas are only useful to the extent that they help determine what is fair and reasonable”: Parypa v. Wickware, supra, at para. 70.
[37]        With that said, if there are mathematical aids that may be of some assistance, the court should start its analysis by considering them. For example, in Henry v. Zenith (1993), 31 B.C.A.C. 223 at paras. 44-48, 82 B.C.L.R. (2d) 186 (C.A.), this Court held that a trial judge’s failure to consider an economist’s projections of a plaintiff’s lost future earning capacity contributed to the judge committing an error in principle, which “resulted in a wholly erroneous estimate of the damages”.
[38]        In cases where the future is hard to predict, a global approach to assessing the loss of future earning capacity is preferable. However, in this case, given the trial judge’s findings of fact, the future is not hard to predict. Ms. Jurczak intended to become a DIR consultant prior to her injuries and because of those injuries she can only work 15 hours per week. The trial judge found as fact that if she was physically able to work 23 hours per week, there was sufficient demand for her skills that she would be able to bill for those hours.
[39]        Additionally, the award for loss of future earning capacity is supposed to compensate Ms. Jurczak for the next 20 to 22 years but is only $10,000 higher than the award for past wage loss.
[40]        In my view, there is a reversible error in the trial judge’s assessment of future loss of capacity. The trial judge’s award bears no correlation to the award for past income loss; nor does it accord with the trial judge’s findings regarding the effect of her injuries on her future ability to work
[41]        Ms. Jurczak does not dispute the trial judge’s findings of fact. Rather, she maintains the trial judge offered no explanation as to why he departed so significantly from the findings in the economist’s report, which he appeared to accept as credible and reliable. Her argument is premised on the assumption the trial judge pulled the figure of $120,000 out of thin air, without having regard to the economist’s calculations.
[42]        It is obvious from the trial judge’s analysis and reasoning that he rejected a purely mathematical approach to calculate Ms. Jurczak’s loss of a capital asset. Instead, it appears he followed the approach in Brown v. Golaiy and awarded Ms. Jurczak $120,000. While the award represents two to three times Ms. Jurczak’s average earnings before the accident and almost double her annual earnings afterwards, the amount has no foundation in the evidence.
[43]        The trial judge was entitled to reject a mathematical approach in the circumstances of this case. However, given his factual findings, in my view the award for loss of future earning capacity is so inordinately low as to amount to an error.
[44]        Having regard to the award for loss of future earning capacity or $110,000 representing a 6 year loss, and considering Ms. Jurczak has about 20-22 years to age 65 and possible retirement, I would increase the award for loss of future earning capacity to $400,000.