Tag: Double Costs

No Double Costs for "Walk Away Offer" In Defeated Lawsuit

Reasons for judgement were released today by the BC Supreme Court considering whether a Defendant should be awarded double costs for successfully defeating a lawsuit where they made a formal settlement offer before trial.
In today’s case (McVeigh v. McWilliams) the Plaintiff sued the Defendant alleging defamation.  Before trial the Defence lawyer made a ‘walk away’ offer under Rule 37B (click here to access my previous posts and recent video discussing formal settlement offers and costs consequences) which was phrased as follows:
Our client will waive costs in exchange for your consent to a dismissal of your claim on a “without costs” basis. Our client reserves the right to bring this offer to the attention of the court for consideration in relation to costs after the court has rendered judgment on all other issues in this proceeding, in accordance with Rule 37(b) of the Rules of Court.
The Defendant, who was awarded Costs for succeeding in the lawsuit, asked the Court to exercise its discretion under Rule 37B and award double costs.  Mr. Justice Shabbits refused to do so finding that the Plaintiff was entitled to his day in Court and should not be penalized with an order of double costs for failing to beat a walk away offer.  The Court reasoned as follows:

[23] A defendant in every case in which a non-monetary issue is at stake could offer to “settle” on the basis that the plaintiff concede the cause of action, and they could do so as soon as they file the statement of defence. The issue is whether such an “offer” should attract double costs.

[24] I acknowledge that in this case the defendant did offer to waive costs to the date of the offer. But, costs here were never the issue. In my view, the defendant’s offer did not really involve any meaningful element of compromise. In respect of the cause of action, the defendant’s position after delivery of the offer to settle was the same as before delivery. It was as set out in the pleadings.

[25] In my opinion, it was not unreasonable of the plaintiff to refuse the defendant’s offer. He, too, was entitled to have the issue tried.

[26] In my opinion, no order for double costs is warranted. The defendant is entitled to his costs on Scale B except for the costs of this application. The plaintiff has enjoyed substantial success on this application, and he is entitled to his costs of it on Scale B.

I should point out that it is possible for a Defendant to be awarded double costs for beating a settlement offer if the lawsuit is dismissed, however, in cases where the settlement offer was no more than a ‘nuisance’ offer or a ‘walk away’ offer the BC Supreme Court may be reluctant to make such an award.

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.

Double Costs Awarded After Jury Dismisses ICBC Injury Claim

Reasons for judgement were released today by the BC Supreme Court, New Westminster Registry, awarding a Defendant double costs following a Jury dismissing a Plaintiff’s ICBC Injury Claim.
This is one of the first cases that I am aware of under Rule 37B where a defendant was awarded double costs.
In today’s case (Luzuka v. Chuang) the Plaintiff was involved in an intersection collision.  Both fault and value of the claim were at issue.  ICBC, through the defendant’s counsel, made a formal settlement offer in 2007 for $40,000.  This offer was rejected by the Plaintiff.  The claim proceeded to trial which lasted 9 days before a Judge and Jury.  The Jury dismissed the Plaintiff’s claim finding that she did not prove the Defendant was responsible for the collision.
The Defendant sought an award of costs up to the date of delivery of the offer and double costs from that point on.  The application was largely successful and Mr. Justice Harvey noted that the “deterrent functions” of punishing a party who refused to accept reasonable settlement offer should not be ignored in such applicaitons.  Specifically Mr. Justice Harvey found as follows:

[24] The offer to settle was one which ought to reasonably have been accepted by the plaintiff within seven days of the disclosure to counsel of the identity of the witness, Ms. Kapil, which occurred during examinations for discovery on November 27, 2007.

[25] By that date, the plaintiff’s medical condition was well defined and it ought to have been clear to the plaintiff that liability for the accident was seriously in dispute.

[26] As was noted by Hinkson J. in Bailey, at para. 39, a refusal to award double costs following the date determined that the offer of the defendants ought reasonably to have been accepted, “would completely ignore the important deterrent function of the Rules”.

[27] Therefore, the defendants are entitled to costs and disbursements of the action until December 4, 2007, pursuant to Rule 57(9). Thereafter, the defendants are entitled to double costs together with actual disbursements, pursuant to Rule 37B(5)(b).

While no mention of the amount is made, the costs and disbursements stemming from this order would likely be in the tens of thousands of dollars.  This ‘deterrent‘ effect is a real one and unfortunately needs to be accounted for when preparing for trial where a formal settlement offer is made under Rule 37B.

As readers of this blog are likely aware, Rule 37B will be replaced with Rule 9 on July 1, 2010 when the new BC Civil Rules come into force. 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.

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If you would like further information or require assistance, please get in touch.

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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