Plaintiff Awarded Partial Costs Despite Having Claim Dismissed at Trial

Reasons for judgement were released this week by the BC Supreme Court, Cranbrook Registry, highlighting the Court’s discretion with respect to costs consequences following a trial in which a pre-trial formal settlement offer was made.
In this week’s case (Russell v. Parks) the Plaintiff was injured when struck by the Defendant’s vehicle while walking in a parking lot.   Liability was at issue and ultimately the Plaintiff was found 2/3 responsible for the incident.  After factoring this split in the Plaintiff’s assessed damages came to  $28,305.  Prior to trial ICBC paid more than this amount in Part 7 benefits which are deductible from the damage assessment pursuant to section 83 of the Insurance (Vehicle) Act.
Despite proving partial liability against the Defendant and further proving damages, the Plaintiff’s claim was ultimately dismissed due to the above statutory deduction with Mr. Justice Abrioux providing the following reasons:
[20] In my view, this reasoning applies to this case, where the application of section 83(5) of the Act results in there being an award of $0 to the plaintiff. Accordingly, the action is dismissed and this should be reflected in the order.
Prior to trial ICBC made a formal settlement offer for $25,000 of ‘new money’.  The Court needed to consider what costs consequences ought to flow in these circumstances.  In awarding the Plaintiff 75% of pre-offer costs and having each party bear their own post offer costs the Court provided the following reasons:
[21] The dismissal of the action does not necessarily mean the plaintiff is disentitled to any costs: see McElroy v. Embleton, at para. 10.
[22] The first question is, putting aside for the moment the issue of Part 7 benefits paid, how should costs be apportioned from the time of the commencement of the action until April 13, 2012? At trial, I found the defendant to be one-third liable for the plaintiff’s loss. ..
[28] Having considered these authorities, and subject to my findings below regarding the Part 7 benefits, I find the plaintiff is entitled to 75% of his costs up to the date of the settlement offer of April 13, 2012. This reflects the fact that although the amount of time spent on determining liability at the trial was not “minimal”, more time was spent regarding the assessment of damages. This was shown in the medical evidence led, the reports which were obtained and the like. It would be unjust not to exercise my discretion to depart from the default rule referred to in paragraph 26 above in these circumstances.
[29] The next issue is whether the payment of the Part 7 benefits should affect the award of costs…
[43] This is not an appropriate case, in my view, to conclude as is submitted by the defendant that the plaintiff should not have proceeded to trial. It was not readily foreseeable to either party what the result was going to be with respect to liability or the quantum of damages. In so far as liability is concerned, I noted at para. 31 of my reasons for judgment that cases dealing with competing duties of pedestrians and operators of motor vehicles are highly fact specific.
[44] Taking all of these factors into account, I conclude that for the time period up to the defendant’s settlement offer of April 13, 2012, the plaintiff shall be awarded 75% of his costs and disbursements…
[45] What is the effect of the settlement offer made by the defendant for $25,000 of “New Money” as defined in counsel’s correspondence dated April 13, 2012? The New Money was in addition to the Part 7 benefits already received by the plaintiff. No objection was taken by the plaintiff to the form of the defendant’s offer to settle…
[62] Upon considering the factors in R. 9-1(6), I do not accept the defendant’s submission that double costs are appropriate. There is no reason for the plaintiff to be subject to a punitive measure. He was not unreasonable in rejecting the settlement offer. The issues at trial made the apportionment of liability quite uncertain. There was also a considerable range in the amount of damages which could have been awarded. The plaintiff’s finances would be greatly impacted if an order for double costs was made against him. In addition, the end result was effectively a nil judgment.
[63] Taking into account the legal principles to which I have referred and the particular circumstances which exist in this case, I conclude each party should bear their respective costs after the date of the defendant’s offer to settle. The plaintiff has already suffered some financial consequences for proceeding to trial in that I have decided he shall not receive 100% of his costs until the defendant’s offer to settle, but rather 75% of those costs.