Special Costs and "Obviously Flawed Expert Reports"

When ICBC Claims proceed to trial in the BC Supreme Court the parties to the lawsuit frequently rely on the reports of ‘expert’ witnesses.  Usually these are medical doctors but other experts such as engineers, economists, functional capacity witnesses and others are common. If a party relies on a hired expert who authors an ‘obviously flawed report’ that party can be penalized by the judge with an order of ‘special costs’.  The BC Supreme Court summarized this principle of law in a 2003 decision by the name of Coulter v.  Ball as follows:

[75]   The use of obviously flawed expert reports is conduct that has been found by the Courts to warrant an award of special costs, see Heppner v. Schmand, supra.  In McKitrick v. Iskic, [1999] B.C.J. No. 1724, Madam Justice Bennett stated, although declining to order special costs on that basis in the case before her at para. 11:

There is no doubt that when a party bases a claim or defence on obviously flawed reports, or an unsubstantiated basis, special costs may be awarded.

In Coulter, the BC Supreme Court summarized the principles behind orders of special costs as follows:

The principle which guides the decision to award solicitor-and-client costs in a contested matter where there is no fund in issue and where the parties have not agreed on solicitor-and-client costs in advance, is that solicitor-and-client costs should not be awarded unless there is some form of reprehensible conduct, either in the circumstances giving rise to the cause of action, or in the proceedings, which makes such costs desirable as a form of chastisement. The words “scandalous” and “outrageous” have also been used. (citations omitted)

[10]   In Leung v. Leung,[1993] B.C.J. No. 2909 (S.C.), Chief Justice Esson, as he then was, clarified the meaning of reprehensible in this context as conduct that the Court finds worthy of rebuke.  At paragraph 5 he stated:

There is nothing in the conduct of Mr. Leung in relation to this matter which I would call “scandalous” or “outrageous”.  But “reprehensible” is a word of wide meaning.  It can include conduct which is scandalous, outrageous or constitutes misbehaviour; but it also includes milder forms of misconduct.  It means simply “deserving of reproof or rebuke”.

[11]   That broader meaning of reprehensible was endorsed in Garcia v. Crestbrook Forest Industries Ltd., [1994] B.C.J. No. 2486 (C.A.).  It was again confirmed in Heppner v. Schmand, [1998] B.C.J. No. 2843(C.A.) by Hinds J.A., speaking for the court, at paragraph 17:

In my view, there was evidence before Mr. Justice Shaw upon which he could found his conclusion that the conduct complained of was reprehensible and was deserving of rebuke.  While the conduct complained of may not have been scandalous or outrageous it was, nevertheless, reprehensible in the sense that it constituted a milder form of misconduct deserving of reproof or rebuke.  It was conduct from which the court sought to dissociate itself.

[12]   Because special costs are awarded to penalize conduct from which the Court seeks to dissociate itself, the award will extend beyond indemnity.  The governing factors are punishment and deterrence, see Fullerton v. Matsqui (District), [1992] B.C.J. No. 2986 (C.A.).

[13]   The general rule is that where special costs are awarded, they will be for the entire proceeding, see Sammartino v. Hiebert, [1997] BCJ 2036 (S.C.).  However, there is discretion to award special costs for only a particular period of time related to the impugned conduct.  The factors which will be relevant in relation to this exercise of discretion included whether the impugned conduct was an isolated occurrence and its significance in terms of the conduct of the litigation, see Muncaster v. Nunnenmacher (1996), 76 B.C.A.C. 211 at paragraph 17 per Finch J.A., speaking for the court:

When one looks at the overall course of this litigation and at the reasons of the learned trial judge in their entirety, two things seem apparent with respect to the false document.  The first is that the learned trial judge viewed its creation as a matter which called for a sanction in costs.  The second is that the document did not play a major part in the disposition of the law suit.  It seems to me that in awarding special costs for the short period he did the learned trial judge was attempting to balance those somewhat conflicting factors.  The order limiting special costs to a brief period of the law suit is an unusual one.  Indeed, counsel were unable to find any case where a similar order had been made.  However, the learned trial judge had the unique advantage of having heard all of the evidence and having seen all of the witnesses, and the advantage of being able to assess the relative importance of the false document in the full context of this long, complex and obviously difficult lawsuit.

On Friday the BC Supreme Court released reasons for judgement dealing with this area of the law.  In Friday’s case (Henri v. Seo) the Plaintiff took her ICBC Claim to trial.  ICBC relied on an orthopaedic surgeon who is often retained in ICBC claims.  The Plaintiff argued that she should be awarded special costs because “the defendant and her insurer (ICBC) improperly relied on the report and the testimony of Dr. J. Schweigel – an orthopaedic surgeon whose evidence has been either rejected or not relied upon in a number of previous cases.  The plaintiff says that by way of an award of special costs this Court ought to express its disapproval of ICBC’s repeated use of what she characterizes as Dr. Schweigel’s “clearly flawed reports”.

Madam Justice Boyd rejected this argument and summarized and applied the law as follows:

[10] I entirely reject this submission.  Even if an award of special costs may be made in the case of an action under Rule 66 (which I do not necessarily accept), it remains that simply by virtue of being insured by ICBC the defendant does not thereby assume the corporate persona of the Insurance Corporation and therefore be subject to criticism concerning its prevailing policies or practices, whether as an insurer or as a litigant.  How ICBC goes about defending motor vehicle actions, including which experts it retains and relies upon, is not a matter to be addressed in costs in an action between the plaintiff and the defendant here.

[11] As to the merits of the argument, it remains that while the use of obviously flawed expert reports may be conduct which warrants an award of special costs (Coulter v. Ball, 2003 BCSC 1186; Heppner v. Schamnd [1998] B.C.J. No. 2843 (C.A.), this is not the case here.  The defence has referred to a number of different actions in which Dr. Schweigel’s opinion has either been accepted or preferred to that of other physicians.

coulter v. ball, dr. schweigel, henri v. seo, icbc injury claims, special costs

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ERIK
MAGRAKEN

Personal Injury Lawyer

When not writing the BC Injury Law Blog, Erik is the managing partner at MacIsaac & Company, based in Victoria, B.C. He is also involved with combative sports regulatory issues and authors the Combat Sports Law Blog.

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