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BC Court of Appeal Clarifies Law in Future Wage Loss Injury Claims

When a Plaintiff suffers lasting injuries as a result of the negligence of others the law allows for compensation of future losses.   When it comes to future earnings being impacted by injury the Courts in BC do not compensate “loss of earnings” but rather a “a loss of earning capacity“.
There is a feeling amongst some personal injury lawyers that the BC Courts have handed out contradictory judgements regarding the circumstances required to prove a diminished earning capacity claim.  Today the BC Court of Appeal addressed the law of diminished earning capacity and added some welcome clarity to these types of claims.
In today’s case (Perren v. Lalari) the Plaintiff was injured in a 2004 BC car crash.  She was found to have suffered from chronic soft tissue injuries that will continue indefinitely.  According to the trial Judge the injuries rendered “the plaintiff less marketable than she was before the accident but not in a way that demonstrates any substantial possibility that she will suffer an associated loss”  The Judge went on to award $10,000 for the Plaintiff’s diminished earning capacity.  (You can click here to read my 2008 article about this trial judgement).  Interestingly the Trial Judge invited the Court of Appeal to canvass this area of law stating that “It would be helpful if the Court of Appeal has an opportunity to address these issues fully”
The Defendant appealed the judgement arguing that the Judge was wrong in law in awarding money for dimished earning capacity on the facts of the case.  The BC Court of Appeal agreed and in doing so provided the following useful summary of the law:

[30]         Having reviewed all of these cases, I conclude that none of them are inconsistent with the basic principles articulated in Athey v. Leonati, [1996] 3 S.C.R. 458, and Andrews v. Grand & Toy Alberta Ltd., [1978] 2 S.C.R. 229.  These principles are:

1.         A future or hypothetical possibility will be taken into consideration as long as it is a real and substantial possibility and not mere speculation [Athey at para. 27], and

2.         It is not loss of earnings but, rather, loss of earning capacity for which compensation must be made [Andrews at 251].

[31]         Furthermore, I conclude that there is no conflict between Steward and the earlier judgment in Pallos.  As mentioned earlier, Pallos is not authority for the proposition that mere speculation of future loss of earning capacity is sufficient to justify an award for damages for loss of future earning capacity.

[32]         A plaintiff must always prove, as was noted by Donald J.A. in Steward, by Bauman J. in Chang, and by Tysoe J.A. in Romanchych, that there is a real and substantial possibility of a future event leading to an income loss.  If the plaintiff discharges that burden of proof, then depending upon the facts of the case, the plaintiff may prove the quantification of that loss of earning capacity, either on an earnings approach, as in Steenblok, or a capital asset approach, as in Brown.  The former approach will be more useful when the loss is more easily measurable, as it was in Steenblok.  The latter approach will be more useful when the loss is not as easily measurable, as in Pallos and Romanchych.  A plaintiff may indeed be able to prove that there is a substantial possibility of a future loss of income despite having returned to his or her usual employment.  That was the case in both Pallos and Parypa.  But, as Donald J.A. said in Steward, an inability to perform an occupation that is not a realistic alternative occupation is not proof of a future loss.

[33] On the facts of this case, the trial judge found that there was no substantial possibility of a future event leading to an income loss.  That should have been the end of the enquiry.  That was a reasonable conclusion on the evidence because there was no evidence that she was limited in performing any realistic alternative occupation.

Protection of the Public – Holding a Lawyer Personally Liable for Unnecessary Court Costs

Can a lawyer be held personally liable to his client or to the opposing party for Court Costs incurred because of unreasonable steps taken in a lawsuit?  The answer is yes and today the BC Court of Appeal provided lengthy reasons addressing this important issue.
In today’s case (Nazmdeh v. Spraggs) the lawyer represented a client in a personal injury lawsuit.  A number of pre-trial applications for discovery were brought by the defence lawyer and these were resolved through Chambers Hearings.   One of the applications was for interrogatories and another demanded particulars.  The Court granted these motions and held that the lawyer for the Plaintiff “failed to comply with his independent obligations as counsel in response to the interrogatories and demand for particulars…..the lawyer had failed to take positive steps to meet his obligations“.
As a result the lawyer was ordered to personally pay costs to the Defendant.  This order was made under Rule 57(37) which holds as follows:

(37)  Where the court considers that a solicitor for a party has caused costs to be incurred without reasonable cause, or has caused costs to be wasted through delay, neglect or some other fault, the court may do any one or more of the following:

(a)        disallow any fees and disbursements between the solicitor and the solicitor’s client or, where those fees or disbursements have been paid, order that the solicitor repay some or all of them to the client;

(b)        order that the solicitor indemnify his or her client for all or part of any costs that the client has been ordered to pay to another party;

(c)        order that the solicitor be personally liable for all or part of any costs that his or her client has been ordered to pay to another party;

(d)        make any other order that the court considers appropriate.

The Plaintiff’s lawyer challenged this finding and the case was brought before the BC Court of Appeal.  He argued that a lawyer should only face such punishment if his/her conduct was “reprehensible“.
The case was argued before a 5 member panel of the BC High Court and even the Law Society of BC intervened arguing that the Chambers Judge was wrong in making such an order and that it would have a “chilling effect on litigation and on advocacy…and ultimately undermine collegiality“.
The Court of Appeal rejected these arguments and dismissed the appeal.  In doing so the BC High Court provided the following instructive reasons on when a lawyer can be personally responsible for Court Costs under Rule 57(37) for steps taken in a BC Supreme Court Lawsuit:

[101] Prior to the enactment of the Rules, the Supreme Court of British Columbia had power to make orders against lawyers to pay costs personally under the court’s inherent jurisdiction.  Such orders were generally made only in cases of “serious misconduct”. The Rules, particularly Rule 57(30) and its successor Rule 57(37), have, however, expanded the scope of conduct which might support costs orders against lawyers. The Court now has a discretion to order a lawyer to pay costs where he has “caused costs to be incurred without reasonable cause, or has caused costs to be wasted through delay, neglect or some other fault”.

[102] Under Rule 57(37), mere delay and mere neglect may, in some circumstances, be sufficient for such an order against a lawyer. Under the Rule there is no requirement for “serious misconduct”, the standard required under the court’s inherent jurisdiction. The requirement in Young and in Kent of “reprehensible” conduct applies only in cases of orders against a lawyer for special costs. Young and Kent are not authority for requiring such a standard when making an order for party and party costs against a lawyer. In such circumstances, the lower standard mandated by the Rule is sufficient.

[103] The power to make an order for costs against a lawyer personally is discretionary. As the plain meaning of the Rule and the case law indicate, the power can be exercised on the judge’s own volition, at the instigation of the client, or at the instigation of the opposing party. However, while the discretion is broad, it is, as it has always been, a power to be exercised with restraint. All cases are consistent in holding that the power, whatever its source, is to be used sparingly and only in rare or exceptional cases.

[104] The restraint required in the exercise of the court’s discretion is not to be confused with the standard of conduct which may support its use. Care and restraint are called for because whether the unsuccessful party or his lawyer caused the costs to be wasted may not always be clear, and lawyer and client privilege is always deserving of a high degree of protection.

[105] Nothing in these reasons is a comment upon the immunity of barristers for their conduct in court. This case is not about contempt, abuse of process or similar egregious conduct. It concerns only what a lawyer did or did not do in response to interrogatories and a demand for particulars.

[106] In my respectful view, the learned chambers judge did not err in interpreting the rule according to the plain meaning of its words.

Now to Cross-Reference:  Do the New BC Supreme Court Civil Rules which come into force change this judgment?  Probably not.  Rule 57(37) is reproduced with almost identical language and can be found at Rule 14-1(33) of the New Rules.

The ability of parties to use interrogatories as a means of pre-trial discovery has been restricted under the New Rules so this triggering event is unlikely to give rise to costs consequences however the test set out by the BC Court of Appeal will likely remain good law after the new Rules come into force.

Don't Like the Court's Order? Get it Entered Before Appealing

When prosecuting a personal injury claim various orders can be made in the course of litigation.  In Civil matters in the BC Supreme Court such orders have to be ‘entered’ before crystallizing.    Until the order is entered the Court maintains jurisdiction to review, clarify or potentially vary the order.  If you wish to appeal an order it is important to have it entered first.  Reasons for judgement were released today by the BC Court of Appeal discussing this important practice point in the context of an ICBC Claim.
In today’s case (Chand v. ICBC) counsel for ICBC appealed an order from a BC Supreme Court Master and later Judge.  At the time the Appeal was filed the original order was unentered.  In her reasons for judgement Madam Justice Kirkpatrick of the BCCA said the following regarding the importance of having an entered order before launching an appeal:
[29] The salient feature that I wish to note at this point is that it appears the power described in Buschau is restricted to amending an entered order.  The reason for restricting the application to entered orders is obvious.  Until the order is entered, the judge or master may, on application, reconsider the order.  Here, as I have noted, Master Baker’s order was not entered until 27 May 2009.  Accordingly, it was open to the parties to return before Master Baker at any time before that date to have him clarify the meaning of the stay order….

[41] In my opinion, on an application in which a party is seeking to determine the intention of an entered order, it is essential that the entered order be before the court.  Similarly, on an appeal from a master’s order, the appeal should not proceed until the court has before it the entered order appealed from.  To proceed in the absence of the entered order gives rise to unnecessary uncertainty.  The court hearing the application or the appeal must know that the order under consideration is not susceptible to review or variation by the master who made the order because, of course, until the order is entered, the master is not functus officio.  The proper course in light of the unentered order would have been for the chambers judge to direct ICBC to immediately appear before Master Baker for the purposes of clarifying his order.

[42]         Once the order is entered, the court is functus officio.  In R. v. Roberts, 2004 BCCA 436, this Court said that “[i]t is well settled that the court remains seized of a matter and is not functus officio until the formal judgment of the court is entered and, until that time, the court has the power to reconsider, vary or revoke its judgment” (at para. 7).

[43]         Variation is expressly authorized by the Rules of Court, under Rule 41(24):

The court may at any time correct a clerical mistake in an order or an error arising in an order from an accidental slip or omission, or may amend an order to provide for any matter which should have been but was not adjudicated upon.

[44]         There are limits as to what can be corrected under Rule 41(24). McLachlin and Taylor, British Columbia Practice, 3rd ed. by Frederick Irvine (Markham, Ont.: Butterworths, 2006), summarize these limits at 41-38 to 39:

Notwithstanding that R. 41(24) is much wider than the old “slip rule”, it cannot be used to amend or alter a substantive finding even though that finding might be demonstrated to be in error … R. 41(24) does not permit changing a final order where a judge has second thoughts about his order, or to permit the parties to provide fresh details on matters already before the court ….  Its proper use is (1) to rectify a slip in drawing the order which, if unamended, would produce a result contrary to the intention of the court or of the parties… or (2) to provide for a matter which should have been but was not adjudicated upon….  [citations omitted].

[45]         It does not appear that ICBC considered making an application under Rule 41(24).

[46]         In addition to Rule 41(24), the court has, through inherent jurisdiction, “the power to amend the entered order on the basis that it contained an error in expressing the manifest intention of the Court” (Buschau v. Rogers Communications Inc., 2004 BCCA 142, 237 D.L.R. (4th) 260 at para. 26, leave to appeal ref’d [2004] S.C.C.A. No. 221).  In the absence of evidence of irrevocable steps in reliance or undue prejudice, the court should correct the order (para. 27).  It is not in the interests of justice for an order to stand that does not reflect the parties’ true entitlements (para. 27).

[47] In the case at bar, no one seems to have addressed their mind to the fact that Master Baker’s order was unentered.  Since then, of course, the order has been entered and I consider that this Court has jurisdiction under s. 9(1) of the Court of Appeal Act, R.S.B.C. 1996, c. 77, to amend the order and exercise the jurisdiction invested in the Supreme Court.  Proceeding in this way avoids further litigation and expense, far too much of which has been wasted in this case to date.

The Jursidiciton of Trial Judges to Rule on "Trial Fairness" Matters

In a judgement released today the BC Court of Appeal discussed the power of Trial Judges to make orders relating to “Trial Fairness” matters.
In today’s case (Oberreiter v. Akmali) the Plaintiff sued for personal injuries from a 2004 BC car crash.  The matter went to trial and a Jury awarded the plaintiff about $118,000 in total damages.  Before the judgement was ‘entered’ it was discovered that the jury was given access to surveillance footage of the Plaintiff which had not been entered into evidence.  The Plaintiff successfully applied for a mistrial.  (Click here to read my summary of the mistrial application).
The Defendants brought the matter to the Court of Appeal arguing, amongst other things, that the Trial Judge had “no jurisdiction to entertain a motion after a jury has rendered its verdict and been discharged“.
The BC Court of Appeal disagreed with this submission and dismissed the appeal.  In doing so Madam Justice Smith gave the following useful and succinct outline regarding the powers of trial judges to rule on “trial fairness” matters:

[24] It is settled law that until a judgment or order has been entered, a trial judge continues to be seized of the matter before him or her. In Clayton v. British American Securities,[1935] 1 D.L.R. 432 at para. 83, [1934] 3 W.W.R. 257 (B.C.C.A.), the court noted that this was recognized as an “unquestioned practice” and “one of very long standing”. Similarly inBurke, the court concluded that, as a principle of law, a trial judge retains the remedial jurisdiction to declare a mistrial on an issue that goes to trial fairness (in that case it was whether there existed a reasonable apprehension of bias) after a jury verdict has been rendered and the jury discharged.

[25] In my view, there is no conflict in the authorities and none were provided that would suggest that a trial judge, before judgment is entered, does not retain jurisdiction to address a trial fairness issue. If that were so, then there would be no jurisdiction for a trial judge, as an issue of law, to address an application to reduce a jury’s award on damages that exceeded the “cap”. In my view, there was no arguable or meritorious issue as to whether the trial judge was functus officio to hear the application.

More from BC Court of Appeal on Jury Trials and Counsel Statements

I recently posted on the potential for mistrials when counsel give their personal opinion in an opening statement to a jury.  Today reasons for judgement were released by the BC Court of Appeal further discussing, amongst other topics, proper opening remarks by counsel in a Car Crash case.
In today’s case (Moskaleva v. Laurie) the Plaintiff suffered serious injuries including a Mild Traumatic Brain Injury (MTBI) in a 2002 motor vehicle collision.  The Plaintiff was crossing with the light in a marked cross-walk in Maple Ridge at the time.
After a 18 day jury trial damages of over $1.9 million were awarded for her injuries and losses.  The Defendant appealed on 5 grounds stating that
1.  the opening submissions of respondent’s counsel were improper and prejudicial;
2.  the cross-examination of a psychiatrist called by the appellant exceeded the bounds of proper cross-examination and thereby prejudiced the jury;
3.  the trial judge’s interventions and questions during the testimony of three expert witnesses called by the defence impugned the credibility of those witnesses.
4.  the appellant alleges that the trial judge erred in his instructions to the jury by failing to explain properly the law relevant to past and future economic loss and by inaccurately stating the appellant’s position on that issue.  The relief the appellant seeks on the first four grounds of appeal is an order for a new trial.

5.  that the awards for non-pecuniary damages, past wage loss, and future economic loss are inordinately high, not supported by the evidence, and inconsistent with the jury’s award for cost of future care.

The Appeal was dismissed on all 5 grounds.  This case is worth reviewing for the courts discussion on these areas of law particularly the permissible scope of cross examination of experts and counsels opening statements.  Below I reproduce the Courts analysis of the opening statement of the Plaintiff’s lawyer:

[19] Under the first ground of appeal, the appellant argues that the opening submissions of respondent’s counsel were improper and prejudicial and resulted in an unfair trial.  To support her submissions that the opening statement failed to conform to the proper function or purpose of an opening, the appellant refers to Halsbury’s Laws of England, 3rd ed. (London: Butterworths, 1953), vol. 3, at 69, and to what was said by Finch C.J.B.C. in Brophy v. Hutchinson, 2003 BCCA 21 at paras. 24-25, 9 B.C.L.R. (4th) 46.  As to the effect of an improper opening statement, the appellant refers to Brophy at para. 48.

[20] The appellant complains that the opening statement contained no explanation as to its purpose and, rather than outlining the facts the respondent expected to prove, gave a description of the accident, the mechanism of a brain injury, and the respondent’s training and employment background, all as if they were established fact, thereby giving the impression that all that was important for the jury to consider was the evidence of the respondent’s symptoms in the aftermath of the collision.  The appellant further submits that in the opening, the respondent’s symptoms and the consequences of the accident were couched in pathos through an emotional appeal to the challenges faced by the respondent as an immigrant to Canada from Russia.  The appellant argues that while the complete effect of the opening remarks of respondent’s counsel cannot be known to a certainty, the character of those remarks was clearly prejudicial.  The appellant contends that the fullness of their effect was to cement for the jury as fact the assertion that the respondent had suffered a brain injury, was incapable of performing work, and had suffered a significant economic loss.

[21] The appellant also complains that a phrase used by the respondent’s lawyer at the conclusion of his opening improperly suggested that the accident, instead of being the result of negligence, was volitional.  In that regard, the appellant refers to the statement in the opening that the appellant “chose to launch her car forward from that stop sign and not pay attention to who was in the cross-walk”.  In the appellant’s submission, the effect was to present the appellant’s case in the context of the respondent as victim and the appellant as culprit.  The appellant argues that the effect was to demonize the appellant at the inception of the trial, thus implicitly characterizing her as a person who intentionally disregarded the interests of others, rather than being merely negligent.

[22] Another complaint the appellant makes is that it was improper for respondent’s counsel to use evidence in the form of photographs in the opening.

[23] In my view, none of the arguments put forward under the first ground of appeal can succeed.

[24] The appellant’s characterization of what was said in the respondent’s opening is overstated and, in some instances, inaccurate.  Prior to counsel for the respondent beginning his opening statement, appellant’s counsel informed the trial judge that he did not dispute that the appellant was negligent but said he was not in a position to admit liability.  As a result of the position taken, liability was obviously in issue.  In the circumstances, for respondent’s counsel to refer to the respondent’s recollection of the accident in his opening statement is unremarkable.  At trial, appellant’s counsel did not object to the description given by respondent’s counsel as to how the accident had occurred and did not complain that respondent’s counsel had “demonized” the appellant.

[25] The suggestion that a miscarriage of justice occurred as a result of what was said by respondent’s counsel in his opening about the circumstances of the accident is further undermined when considered along with the submissions on liability made later in the trial.  Before making his final submission to the jury, respondent’s counsel advised the trial judge and appellant’s counsel that he intended to submit that “one of the reasons why we’re here is because Ms. Laurie [the appellant] says she’s not at fault”.  Appellant’s counsel stated he did not have a problem with that submission and later agreed it was appropriate for the trial judge to instruct the jury to find the appellant negligent.  I further note that during the course of his closing submissions, appellant’s counsel told the jury:

Now, you’ve heard that Ms. Laurie ran her vehicle into the plaintiff.  There’s no doubt.  There’s no doubt that Ms. Moskaleva was in the intersection.  There’s no doubt that Ms. Moskaleva had the right-of-way.  There is nothing that I could say to suggest that Ms. Moskaleva did anything wrong, or that my client demonstrated all the care that she should have.  She didn’t.  She didn’t.  As a result you may find that my client was negligent.  I don’t have anything to say on that.  Nothing I can say.  I think it’s fairly obvious.

[26] In view of the foregoing, there is no substance to the submission that the remarks in the respondent’s opening about the appellant’s manner of driving at the time of the accident resulted in the kind of prejudice that would require a new trial.

[27] In his opening, respondent’s counsel showed the jury some photographs of the respondent and her husband.  Appellant’s counsel had been informed in advance by respondent’s counsel that he intended to use the photographs in his opening and appellant’s counsel told the trial judge he did not have “a problem” with the photographs.  After the opening had been given, appellant’s counsel repeated that he did not object to the use of the photographs.

[28] The appellant’s contention that the respondent’s counsel stated evidence as fact, thereby resulting in prejudice requiring a new trial, ignores the trial judge’s opening instructions to the jury.  Near the commencement of the trial, the judge gave the jury various instructions, including an instruction on the purpose of counsel’s openings.  After referring to the burden and standard of proof, the trial judge said, in part:

I will turn next to the opening remarks of counsel.  One of the Mr. Faheys will begin the trial once I have concluded my remarks.  He will take the opportunity to explain to you what he expects the evidence will disclose and give you an overview of his case.  Counsel for the defendant will do so at a later time after the plaintiff’s evidence has been called.  These opening remarks are made so that you will have a better understanding of the nature of the evidence that the parties intend to call; however, the opening remarks are not evidence and you cannot rely on what the lawyer says in his opening to prove the facts that you have to prove to decide the case.  You must only accept that the case is proven based on evidence that is called at court.

[29] Counsel for the respondent referred throughout his opening to the types of evidence he intended to adduce and what that evidence would show.  He specifically told the jury there would be controversy in the evidence concerning brain injury, concussion, and post-concussion syndrome and asked the jury to pay close attention to the evidence that would be led.  There were some phrases or statements in the respondent’s opening that might have been more carefully couched, but considered in the context in which they were uttered, they were not such as to exclude consideration of the case for the appellant.

[30] After the respondent’s counsel had concluded his opening statement, appellant’s counsel asked the trial judge to remind the jury that the opening was not evidence.  The trial judge decided his earlier instruction was sufficient, and in his charge, the judge reminded the jury that they were to rely on their own recollection of the evidence, not anything said by counsel.

[31] Of considerable significance in regard to this ground of appeal is the fact that appellant’s counsel told the trial judge he was not seeking a mistrial as a result of anything said during the opening.  This is a case in which appellant’s counsel specifically put his mind to the effect of the opening and elected not to seek an order discharging the jury. A deliberate election, such as occurred in this case, is a powerful circumstance militating against the appellant’s submission that a new trial is required to rectify an unfair trial.  While the facts of the case differ from the case at bar, the observation of Hall J.A. in R. v. Doyle, 2007 BCCA 587 at para. 28, 248 B.C.A.C. 307, is apposite:

In my opinion, having made a reasoned decision not to seek a mistrial, I do not consider it is open now to counsel for the appellant to advance an argument that the discovery and use by the judge of the evidence resulted in an unfair trial proceeding.  A rational choice was made at trial by experienced and competent counsel and it would not be appropriate to now allow this point to be the foundation of a contrary position in this Court.

[32] Further support for the view expressed by Hall J.A. may be found in Rendall v. Ewert (1989), 60 D.L.R. (4th) 513, 38 B.C.L.R. (2d) 1 at 10 (C.A.), and in Morton v. McCracken (1995), 7 B.C.L.R. (3d) 220 at para. 13, 57 B.C.A.C. 47.

[33] I would not accede to the first ground.

Special Costs Awarded for 'Reprehensible' Behaviour by Law Firm

In reasons for judgement released today (Chudy v. Merchant Law Group) the BC Court of Appeal upheld a trial judge’s award for special costs.
The Plaintiff was involved in a serious motor vehicle collision in 1995.  The Plaintiff hired a lawyer and ultimately a $860,000 settlement was reached.
A fee dispute arose after this settlement and litigation ensued.   At trial the Plaintiff’s were granted judgement in the sum of $300,404.17 against the law firm.  This award included a punitive damages award of $50,000 finding that the law firm acted in a ‘malicious, oppressive and high-handed‘ manner to their client.
The lawfirm appealed for various grounds.  In a split decision handed down several months ago, the BC Court of Appeal dismissed the major grounds of appeal but did reduce the over-all judgement by $27,413.58.
Today’s appeal provided supplemental reasons dealing with the narrow issue of whether the trial judge was correct in awarding special costs against the law firm.  In upholding the award, the Court of Appeal said the following with respect to the law of ‘special costs’ and to the behaviour of the Defendant Law Firm:

[6]                The trial judge discussed the claim for special costs at some length at paras. 216 to 261 of his reasons for judgment which are indexed as 2007 BCSC 279.  It is not disputed that he correctly stated the applicable law: 

[255]    In Garcia v. Cresbrook Industries Ltd. (1994), 9 B.C.L.R. (3d) 242 (C.A.) [Garcia], the Court of Appeal considered the type of conduct required for an award of special costs under the Rules of Court, B.C. Reg. 221/90.  After reviewing decided cases and the relationship of “special costs” to the concept of “solicitor-and-client costs”, Lambert J.A. (for the Court) stated at ¶ 17:

Having regard to the terminology adopted by Madam Justice McLachlin in Young v. Young, to the terminology adopted by Mr. Justice Cumming in Fullerton v. Matsqui, and to the application of the standard of “reprehensible conduct” by Chief Justice Esson in Leung v. Leung in awarding special costs in circumstances where he had explicitly found that the conduct in question was neither scandalous nor outrageous, but could only be categorized as one of the “milder forms of misconduct” which could simply be said to be “deserving of reproof or rebuke”, it is my opinion that the single standard for the awarding of special costs is that the conduct in question properly be categorized as “reprehensible”.  As Chief Justice Esson said in Leung v. Leung, the word reprehensible is a word of wide meaning.  It encompasses scandalous or outrageous conduct but it also encompasses milder forms of misconduct deserving of reproof or rebuke.  Accordingly, the standard represented by the word reprehensible, taken in that sense, must represent a general and all encompassing expression of the applicable standard for the award of special costs.

[7]                Davies J. stated his conclusion on the costs issue thus: 

[257]    I am satisfied that the conduct of the Merchant Law Group in this case was reprehensible within the meaning attributed in Garcia.  The conduct and actions of the Merchant Law Group would be deserving of rebuke in an ordinary commercial transaction.  In the context of litigation involving its own clients and the integrity which the Court and the public are entitled to expect from those who are privileged to be members of the legal profession, it was both outrageous and scandalous.

[258]    I order that the plaintiffs recover special costs from the Merchant Law Group from the commencement of this litigation and throughout, including all costs related to the third party proceedings brought against Mr. Shaw.  Those proceedings were, in my view, not only devoid of evidentiary substance but also unnecessarily added to the length of these proceedings.

[259]    Any costs that were paid to the plaintiffs pursuant to previous orders of the Court shall, of course, be deductible from the award of special costs.

[8]                Before stating the above conclusion, the judge described the conduct of the appellant law firm.  In the court’s view, the bad conduct began with a pre-litigation letter from Mr. Merchant to the Law Society of British Columbia dated 2 December 2003 in which he falsely claimed for the appellant a solicitor’s lien on the Chudy file.  He also prepared a fictitious fee account to the Chudys.  This “foreshadowed the way in which the Merchant Law Group was prepared to defend against the plaintiffs’ claims” (para. 251).  In our opinion, this did not amount to a colouration of the judge’s assessment of litigation conduct.  It was properly seen as an attempt by the appellant to put a chill on the appellant’s unsophisticated former clients.  This conduct was not a factor in the assessment of punitive damages.  Rather, the award of punitive damages was based on an earlier breach of fiduciary duty.  In these circumstances, an improper attempt by a legal professional to discourage a claim against that professional, although done before commencement of the action, is properly taken into account when considering litigation conduct.  The trial judge’s conclusion at para. 225 that Mr. Merchant’s evidence about the draft account and an accompanying letter to the respondents “was a disingenuous attempt to cover up the fact that he did not want the plaintiffs to have the file and that he was prepared to go to unethical lengths to avoid delivering it to them” is unassailable.  It was bad enough that Mr. Merchant improperly claimed the lien.  But he exacerbated that conduct by offering an explanation at trial that was contrived.  That was litigation conduct properly considered on the claim for special costs. 

[9]                The appellant has not demonstrated error on the part of the trial judge in his conclusion that the conduct of the appellant during this litigation, both pre-trial and during the trial, was reprehensible as that term is used in Garcia.  The evidence abundantly supports the conclusion.  The appellant brought pre-trial motions that were without merit; it brought a specious application, based in part on false evidence, challenging the jurisdiction of the court to try the matter; it avoided a peremptory trial date by adding Mr. Shaw as a third party but did not require him to file a defence, did not examine him for discovery, did not cross examine him at trial with respect to its allegations against him, and in a lengthy written submission at the end of the trial, did not refer to its claim over against Mr. Shaw (the trial judge tersely dismissed the third party claim); it brought a motion (returnable on the date scheduled for the hearing of a R. 18A application for a summary trial brought by the respondents) for removal of the respondents’ counsel on ridiculous grounds, a tactic which the trial judge at para. 236 stated, with the benefit of his unique perspective of the appellant’s entire conduct, “was not only without merit but was calculated to prevent the Rule 18A application from proceeding as ordered”; on the hearing of the respondents’ R. 18A motion, Mr. Merchant produced a large number of documents, not previously disclosed and not sworn to, in support of his position that the action could not be determined on a summary basis; and, finally but of most significance, Mr. Merchant offered evidence at trial that the trial judge determined was false and misleading.

[10]            As to the final point, the respondents refer to Brown v. Lowe, 2002 BCCA 7, in which Southin J.A. said (at para. 149):  “To give false evidence relating to the matters in question at any stage of the proceedings is a grave matter.  By “false”, I do not mean “erroneous”; I mean knowingly untrue.”  The falsity of Mr. Merchant’s evidence is commented on by the trial judge at several points in his judgment and is referenced by the majority judgment in this court.  There is no need to particularize it here.

[11]            The evidence as a whole clearly supports the conclusion of the trial judge that the legal basis for the awarding of special costs was established in this case. 

$50,000 Punitive Damages Award Against LawFirm Upheld

Reasons for judgment were released today dealing with a fee dispute between a personal injury plaintiff and his lawfirm.
The Plaintiff was involved in a serious motor vehicle collision in 1995.  The Plaintiff hired a lawyer and ultimately a $860,000 settlement was reached.
A fee dispute arose after this settlement and litigation ensued.   At trial the Plaintiff’s were granted judgement in the sum of $300,404.17 against the law firm.  This award included a punitive damages award of $50,000 finding that the law firm acted in a ‘malicious, oppressive and high-handed‘ manner to their client.
The lawfirm appealed for various grounds.  In a split decision, the BC Court of Appeal dismissed the major grounds of appeal but did reduce the over-all judgement by $27,413.58.
The award of punitive damages was based on a finding that ‘the totality of the actions and conduct of the appellant (lawfirm) in its abuse of power in its relationship with its clients, as well as in its approach to the litigation, established the need for an award of punitive damages to express the court’s disapproval of such conduct and to serve as a general deterrent
The court summarized the actions of the lawfirm as follows:
[99]            I think that any legal professional would find the conduct of the appellant in this matter to be most disquieting.  The appellant took substantial legal fees after deceiving the respondents and without addressing the position of conflict it was in.  It placed its own interests ahead of those of its unsophisticated clients.  The appellant provided inadequate supervision of Mr. Shaw with full knowledge of the requirements of the Law Society.  Instead of denouncing the obviously reprehensible conduct of Mr. Shaw and setting matters right, it sought to take the benefit of that conduct.  The appellant is vicariously liable for the conduct of Mr. Shaw and is directly liable for its own failure to take remedial action when such action was obviously called for.
The BC Court of Appeal did not disturb the trial judge’s award of $50,000 in punitive damages.
This case is worth reviewing in its entirety for anyone interested in the law dealing with contingency fee agreements and the duties of lawyers to their clients in British Columbia.

Prejudicial Closing Arguments and the Law in BC

Reasons for judgement were released today dismissing a Plaintiff’s appeal of an award of $0 as a result of a BC motor vehicle accident.
The Plaintiff was allegedly injured in a rear end accident.  He sued claiming on-going consequences from a closed head injury and a whiplash type of soft tissue injury to his neck and back.   After a 5 week jury trial in 2007 the jury found the other motorist at fault but awarded $0 as they found that this collision did not cause any injury to the Plaintiff.
The Plaintiff appealed for various reasons including a claim that the defence lawyer made ‘improper prejudicial statements‘ in his closing argument to the jury.
The BC Court of Appeal Dismissed the case finding that while some of the statements ‘may have been cause for concern (plaintiff’s counsel) took no exception and did not ask the judge to provide any direction to the jury in respect of any aspect of the defence address.’ In dismissing the appeal the Court summarized the law as follows:

[23]            This Court will rarely intervene in a civil case where complaints in the nature of those raised for the first time here were not raised at trial.  In Brophy v. Hutchinson, 2003 BCCA 21, 9 B.C.L.R. (4th) 46, the Chief Justice explained:

[52]  In other words, the trial judge is in the best position to observe the effect of counsel’s statements on the jurors, and to fashion an appropriate remedy for any transgressions.  Where no objection is taken, the assumption is that the effect of any transgression could not have been seriously misleading or unfair and there would be no reason for suspecting injustice.

[53]  It is, however, recognized that there may be exceptional circumstances which merit a new trial, despite a failure on the part of counsel to object to an address: Dale v. Toronto Railway (1915), 24 D.L.R. 413 (Ont. C.A.).  In R. v. Jacquard, [1997] 1 S.C.R. 314 (S.C.C.), the court declined to adopt a strict rule that the failure to object to a jury charge invariably waives the right of appeal.  Lamer, C.J.C. noted: “Such a rule might also unequivocally prejudice an accused’s right of appeal in cases where counsel is inexperienced with jury trials”.  [Emphasis of Finch C.J.B.C.]

[54]  In Basra v. Gill (1994), 99 B.C.L.R. (2d) 9 (B.C.C.A.) the court recognized that where there is a “substantial wrong or miscarriage of justice” a new trial may be required, even in the absence of an objection.

[55]  In my opinion, failure of counsel to make a timely objection to irregular or improper proceedings at trial is and must remain, an important consideration in determining whether there has been a miscarriage of justice.  That consideration, however, is to be weighed against the nature and character of the irregularity or impropriety complained of.

[24]            The nature of the statements now complained of does not raise this to an exceptional case that would justify ordering a new trial.  The judge, who was in the best position to observe the effect of what defence counsel said, made no comment at all.  (the Plaintiff’s) counsel said nothing other than what he said in reply.  If he had sought it, some instruction might have been given.  It was apparently thought to be unnecessary. 

This case, and others like it, go to show that it is difficult to succeed in an appeal when alleged improper conduct is not complained about when it occurs at the trial level.

Court of Appeal Orders Re-Trial for Contributory Negligence in Bicycle Accident Case

Reasons for judgement were released by the BC Court of Appeal today ordering a new trial to deal with the issue of ‘contributory negligence’ of the Plaintiff.
The Plaintiff was an experienced tri-athlete and bicyclist.  He was
catastrophically injured in an accident on a steep and winding road in Langley on the morning of June 29, 2002.  Proceeding on his triathlon-model bicycle downhill towards a blind curve, he veered to the right to avoid a “cube” van coming over the centre line, lost control of his bicycle, travelled through a gap between two barriers at the side of the road, and fell down a ravine.  His spinal cord was injured at the C6-7 level, with the result that he has almost no sensation and almost no use of his body from his chest down and suffers chronic neuropathic pain.  He does have use of his arms and of his diaphragm muscles.  He has also been diagnosed with a mild traumatic brain injury.  He was 50 years old at the time of the accident.
Following a 33 day trial the BC Supreme Court found the Defendants liable in negligence and awarded close to $4.5 million for the Plaintiff’s severe injuries and damages.  The trial judge found that the Plaintiff was not contributorily negligent (that is that the Plaintiff was not even partially to blame for the accident).
The Defendants appealed on several grounds.  Their appeal succeeded on the issue of contributory negligence.  The BC Court of Appeal ordered that this issue be retried.  The court’s key finding of error at the trial level is set out at paragraphs 25-26 which I set out below:

[25]            The question that the trial judge was required to address was whether in all the circumstances Mr. Aberdeen was taking reasonable care for his own safety as a bicyclist, going down a hill he knew to be “nasty” and approaching a blind corner.  Did he use a wrong technique?  Was he going too fast?  Given that he was clearly exceeding the “advisory” speed for cars, was he creating an unreasonable risk of harm to himself as he rounded the curve?  Was he driving too closely to the centre line?  Should he not, if riding in a reasonably prudent manner, have been able to move to the right side of his lane, as Mr. McGee did, without losing control and going over the shoulder and off the road?  The trial judge did not answer these questions but, with respect, was content to base his conclusion of no negligence largely on the finding that Mr. Aberdeen could not have received a ticket.  As for the fact that the plaintiff and Mr. McGee had conversed, just before the accident, about the steepness of the hill, that could take one only so far.  As Lambert J.A. suggested in MacDonald v. Shorter [1991] B.C.J. No. 3714, 8 B.C.A.C. 179, it seems likely that “in the bulk of cases where negligence occurs, the negligent conduct is an exception to the general conduct of the person who is said to be negligent.”  (At para. 13.)

[26]            In these circumstances, I am reluctantly driven to the conclusion that the trial judge erred in failing to consider specifically whether Mr. Aberdeen had been taking reasonable care for his own safety.  (In addition, there was more than a “paucity” of evidence on the topic of speed, contrary to the trial judge’s finding.)  I would remit the issue of contributory negligence for retrial below

This case is worth reviewing for anyone involved in an ICBC tort claim involving a cyclist to see the types of factors BC courts look at when deciding whether a cyclist is partially responsible for an accident. 

ICBC Claims and Lawyer Fees

Reasons for judgement were released today by the BC Court of Appeal reducing a lawyer’s fee for services performed on a contingency basis.
The facts of the case are tragic.  The Plaintiff was catastrophically injured when she was 19 months old in a single vehicle roll over accident in 1993.
A claim was started against the driver of the vehicle.  Eventually a new lawyer took over the file and acted for the Plaintiff for over 10 years and had to spend over $10,000 of her own money to move the prosecution of the claim along.
The claim eventually settled for the ICBC insurance policy limits.  Although the fee agreement permitted the lawyer to charge 33.3% of the settlement the lawyer reduced the fee to 20%.
In these circumstances the fees needed the approval of the Supreme Court and in 2007 the fees were approved.  The Office of the Public Guardian and Trustee appeled the approval claiming the fees were excessive in the circumstances.
Interestingly, the guardian of the child took no issue with the legal fees and did not oppose the approved fee of 20%.  In other words, the client appeared to be happy with the services performed and the fees charged but the government was not.
The BC Court of Appeal reduced the lawyers fee to about 12% of the amount recovered.  In doing so the court summarized some of the factors that are considered when approving contingency fee agreements, specifically:

1.         the financial circumstances of the plaintiff;

2.         the risk to the law firm where it carries disbursements;

3.         the complexity of the issues;

4.         the experience and skill of defendant’s counsel;

5.         the experience and skill of plaintiff’s counsel;

6.         the risk assumed by plaintiff’s counsel that there would be no pay for effort expended;

7.         the time expended by plaintiff’s counsel;

8.         the importance of the case to the plaintiff; and,

9.         whether the settlement is a good settlement.

The court then went on to adopt some generally accepted propositions regarding contingency fee agreements in British Columbia:

[22] He said, in commenting in general on contingency fee remuneration at p. 269:

A solicitor who undertakes the prosecution of a difficult case, the prospects of which are uncertain due to various issues such as liability, causation or damages, is entitled to be well compensated in the event the case is brought to a successful conclusion.  Such remuneration must be substantial, but not exorbitant, in order to make up for those cases taken by the solicitor on a contingency fee basis which do not result in success.

[23] In Usipuik v. Jensen, Mitchell & Co. (1986), 3 B.C.L.R. 283, [1986] 5 W.W.R. 41 (S.C.), Madam Justice Southin observed (at p. 297):

In approaching the question of the fairness of any particular contract for fees on a percentage basis, one must remember that there are many kinds of personal injury cases: motor vehicle accidents, medical and other professional malpractice, products’ liability, occupiers’ liability and no doubt other kinds which do not, at the moment, occur to me. Medical malpractice cases are notoriously difficult and expensive to pursue. Expert witness fees in themselves can run to many thousands of dollars.

But actions for negligence in the operation of a motor vehicle may or may not be risky or difficult. Sometimes there is an issue of liability; frequently there is not. Sometimes there is a real difference of opinion on the proper amount of damages between the plaintiff and the Insurance Corporation of British Columbia; sometimes, there is very little.

Do you have questions about this case or lawyers fees and ICBC claims?  Feel free to contact me.