Tag: discretionary costs

Late Offer to “Emotionally and Mentally Fragile” Plaintiff Fails To Trigger Costs Consequences

Reasons for judgement were published today by the BC Supreme Court, Vancouver Registry, declining to award a Defendant trial costs despite the Plaintiff receiving judgement for less than their pre trial settlement offers.

In today’s case (Wiseman v. Wang) the Plaintiff was injured in a collision and sued for damages.  Prior to a February 19, 2019 trial the Defendant made two formal settlement offers.  On June 13, 2018 the Defendant offered to settle the plaintiff’s claims for $100,000 new money plus costs and was open for acceptance until 4:00 pm on the last business day prior to the commencement of trial.  A second offer was delivered on February 13, 2019 and offered to settle the plaintiff’s claims for $150,000 new money plus costs. It was also open for acceptance until 4:00 pm on the last business day before the commencement of trial.

At trial the Plaintiff’s damages were assessed at $79,000.  The Court noted that trial “could have resulted in a much higher award” but reliability problems with the Plaintiff’s own evidence prevented a more favourable result.

The Defendant sought trial costs in these circumstances but the Court declined.  In dismissing the defence application the Court noted that the Plaintiff was ‘emotionally and mentally fragile‘ and the timing of the second offer made it such that costs consequences should not be triggered.  Mr. Justice Davies provided the following reasons:

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BC Court of Appeal Clarifies Discretionary Costs Awards in Fast Track Trials

As I’ve previously written, when a person wins in a lawsuit in the BC Supreme Court they are usually entitled to ‘costs‘.
The normal amount of costs a successful litigant is entitled to are set out in a tariff as an appendix to the Rules of Court (appendix B).  However, in fast track trials, the amount of costs a person is entitled to is capped under Rule 66.  A judge has discretion to waive this cap and award a litigant more.  Today, the BC Court of Appeal released reasons for judgement dealing with the extent of that discretion.
In today’s case (Majewska v. Partyka) the Plaintiff was injured in a 2007 BC car crash.  ICBC admitted that the driver was at fault.  The lawsuit focused on the value of the Plaintiff’s claim.  The Plaintiff made a formal offer to settle her case for $50,000.  ICBC made a formal offer for $25,000.  The trial judge ultimately awarded just over $62,000 in damages.
The Court went on to award the Plaintiff double costs under the ‘usual tariff‘.  ICBC argued that while the Court did have discretion to award costs above the capped amount set our in Rule 66(29) the Judge was wrong in awarding them under the ‘usual tarriff’ and should have used the limited amounts set out in Rule 66 as guidance for the increased costs award.  The BC Court of Appeal agreed and set out the following principles:
[29] Thus, Anderson established two principles. First, it confirmed that there is discretion to award costs beyond the limits in R. 66(29) if there are special circumstances. Second, where such an award is justified, it affirmed that costs should be calculated using those limits as reference points, rather than under the usual tariff…

[31] I appreciate that Anderson dealt only with a settlement offer, whereas there were additional special circumstances in this case. The trial had run for three and a half days, and there was an issue of some complexity. However, the approach in Anderson can easily be adapted to calculate costs for extra days of trial by adding a further $1,600 for each day, based on the present figures of $5,000 and $6,600 in R. 66(29). This was the approach used by Gerow J. in Park, where the R. 66 trial had taken three days.

[32] Using the amounts in R. 66(29) as a basis for awarding increased costs because the issues were complex is not as straightforward. I am persuaded, however, that theAnderson approach could be adapted effectively to accomplish this, again by using those amounts as the basis for calculations.

[33] This approach brings desirable consistency and predictability to costs awards following fast track litigation. The varied approaches that have developed under R. 66 have led to uncertainty with respect to both exposure to and recovery of costs under the rule. Having opted into the R. 66 process, fast track litigants should be able to reliably assess their potential costs liability or recovery in making decisions about the conduct of the case….

[37] I would conclude that the discretionary nature of R. 66(29) is circumscribed by the objectives of R. 66: to provide a speedier and less expensive process for relatively short trials. Those objectives are best served by awarding lump sum costs, calculated by reference to the amounts in R. 66(29).

[38] I acknowledge there may be situations that justify a departure from such costs. I anticipate these would be “exceptional” circumstances rather than “special” circumstances, and might include situations deserving of special costs or solicitor client costs, however, such matters must be left for another day.

[39] I would therefore allow the appeal, and calculate costs under R. 66(29) as follows. Under the present limits of $5,000 and $6,600 I take the pre-trial portion of costs to be $3,400, and $1,600 as representative of each day of trial. The plaintiff’s offer to settle was delivered only six days before trial. Thus, she is not entitled to double costs for trial preparation. She is, however, entitled to double costs for three and a half days of trial, calculated at $3,200 per day. Total costs are thus $14,600 ($3,400 plus $11,200) before disbursements and taxes.

Despite winning the appeal, the BCCA ordered that ICBC pay the Plaintiff’s costs of the appeal because this was a ‘test case‘ and but for that reason ICBC would not have proceeded with the appeal.  The Court stated as follows:

[42] In my view, an order that each party bear its own costs would not be appropriate. The amount in issue is not so significant that the parties would have undertaken the appeal of their own accord. Because the defendant’s insurer chose to use it as a test case, the plaintiff was put to the expense of responding to the appeal. The defendant’s late and unsuccessful attempt to raise a second ground of appeal increased that expense, as the plaintiff had to reply to the new ground as well. In Patterson v. Rankel (1998), 166 D.L.R. (4th) 574 (B.C.C.A.), Southin J.A. described the same insurer’s agreement to pay the plaintiff’s costs in a “test case” as “a very proper thing to do”, and ordered costs in those terms. I agree that is the appropriate result in such a case.

I should point out that Rule 66 is being taken off the books as of July 1, 2010 and being replaced with Rule 15.  However, today’s case ought to retain value as a precedent under the new rule because Rule 15-1(15) has language almost identical to Rule 66(29).

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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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