Plaintiff Awarded Double Costs for Beating Pre Trial Formal Settlement Offer; Relevance of ICBC Insurance Considered

In my continued efforts to track the judicial development of Rule 37B, reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, awarding a Plaintiff double costs for the trial of her ICBC claim.  The contentious issue of the existence of Insurance as a potentially relevant factor was also considered.
In today’s case (Pham-Fraser v. Smith) the Plaintiff was injured in a BC motor vehicle collision.  Before trial the Defendant (insured with ICBC) offered to settle under Rule 37B for $115,000.  The Plaintiff responded with a formal settlement offer of $149,000.  Neither party accepted the respective offers and proceeded to trial where the Court awarded just over $400,000 in total damages (click here to read my previous post discussing the trial judgement).
The Plaintiff, having comfortably beat her formal offer, asked the Court to award double costs under Rule 37B.  In granting the motion Mr. Justice Greyell held as follows:

[24] The second factor referred to in Rule 37B(6) also operates in the plaintiff’s favour.  There is a wide difference between the offer to settle and the final judgment.  The judgment is almost three times the amount offered.  The plaintiff’s offer was made because she wished to avoid court and having to give her evidence.  Some of her evidence was of a private nature relating to matters she did not wish to talk about in the public forum of a court of law (that is, how the accident affected her work and home life, her marital relationship with her husband after the accident, and the fact she suffered from incontinence).

[25] It is not necessary to consider factors set out in Rule 37B(6)(c) and (d).  I do not accept the plaintiff’s submission I ought to consider that the defendants, being represented by ICBC, are in a “sophisticated” position in terms of providing settlement instructions and that this is a factor to be taken into account and operate in the plaintiff’s favour in exercising my discretion under the rule.   The plaintiff’s argument seems to me to simply be another way of putting a “deep pockets” argument forward: an argument the courts have thus far rejected as being a factor to be considered in determining whether to award costs under Rule 37B.

[26] After considering the factors which I do consider relevant under Rule 37B, I conclude the plaintiff is entitled to an award of double costs.

As previously discussed, the BC Supreme Court is inconsistent on whether a Defendant being insured is a relevant factor under Rule 37B and clarity from the Court of Appeal would be welcome.  While more cases than not have held that insurance is not a relevant consideration it is not yet clear that this is correct.  If the law was settled it would assist lawyers in advising their clients of the potential risks and benefits of trial.

In my continued efforts to get us all prepared for the New BC Supreme Court Civil Rules I will again point out that Rule 37B will be replaced with Rule 9 under the New Rules. The new rule uses language that is almost identical to Rule 37B which should help cases such as this one retain their value as precedents.