Tag: icbc formal settlement offers

Plaintiff Awarded Double Costs for Beating Pre Trial Formal Settlement Offer; Relevance of ICBC Insurance Considered


In my continued efforts to track the judicial development of Rule 37B, reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, awarding a Plaintiff double costs for the trial of her ICBC claim.  The contentious issue of the existence of Insurance as a potentially relevant factor was also considered.
In today’s case (Pham-Fraser v. Smith) the Plaintiff was injured in a BC motor vehicle collision.  Before trial the Defendant (insured with ICBC) offered to settle under Rule 37B for $115,000.  The Plaintiff responded with a formal settlement offer of $149,000.  Neither party accepted the respective offers and proceeded to trial where the Court awarded just over $400,000 in total damages (click here to read my previous post discussing the trial judgement).
The Plaintiff, having comfortably beat her formal offer, asked the Court to award double costs under Rule 37B.  In granting the motion Mr. Justice Greyell held as follows:

[24] The second factor referred to in Rule 37B(6) also operates in the plaintiff’s favour.  There is a wide difference between the offer to settle and the final judgment.  The judgment is almost three times the amount offered.  The plaintiff’s offer was made because she wished to avoid court and having to give her evidence.  Some of her evidence was of a private nature relating to matters she did not wish to talk about in the public forum of a court of law (that is, how the accident affected her work and home life, her marital relationship with her husband after the accident, and the fact she suffered from incontinence).

[25] It is not necessary to consider factors set out in Rule 37B(6)(c) and (d).  I do not accept the plaintiff’s submission I ought to consider that the defendants, being represented by ICBC, are in a “sophisticated” position in terms of providing settlement instructions and that this is a factor to be taken into account and operate in the plaintiff’s favour in exercising my discretion under the rule.   The plaintiff’s argument seems to me to simply be another way of putting a “deep pockets” argument forward: an argument the courts have thus far rejected as being a factor to be considered in determining whether to award costs under Rule 37B.

[26] After considering the factors which I do consider relevant under Rule 37B, I conclude the plaintiff is entitled to an award of double costs.

As previously discussed, the BC Supreme Court is inconsistent on whether a Defendant being insured is a relevant factor under Rule 37B and clarity from the Court of Appeal would be welcome.  While more cases than not have held that insurance is not a relevant consideration it is not yet clear that this is correct.  If the law was settled it would assist lawyers in advising their clients of the potential risks and benefits of trial.

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.

One More Rule 37B Case – Formal Settlement Offers and Expiry

I just came across reasons for judgement pronounced on February 10, 2009 by the BC Supreme Court, Chilliwack Registry, but just recently transcribed dealing further with Rule 37B (click here to read my previous posts on this rule).
In this case (Smith v. Tedford and ICBC) the Plaintiff made an offer to settle her ICBC Case 10 days before trial.  The offer did not contain an expiry date in it.  The offer was not accepted by ICBC before trial but on the 6th day of the scheduled 15 day jury trial ICBC purported to accept the offer.   The Plaintiff’s lawyer, wishing to proceed with the trial,  argued that the offer could not be accepted after the commencement of trial.  Mr. Justice Grist held otherwise and found that the acceptance was viable.
The principle to take from this judgment is that if you want to have a certain expiry date in your offer to settle under Rule 37B this end date should specifically be incorporated into the written terms of the offer.
The judgement is very short and to the point and for the convenience of my readers I reproduce it below:

[1]                THE COURT:  The issue at this juncture, day 6 of a 15-day civil jury trial, is the effect of the defendants’ purported acceptance of the plaintiff’s offer to settle made January 23rd, 2009, ten days prior to commencement of the trial.

[2]                The defendants’ position is that under Rule 37B, there is no limitation requiring acceptance of an offer prior to trial as used to exist under Rule 37(13).  Further, there was no time for acceptance stipulated in the offer itself and accordingly, the offer remained open for acceptance.

[3]                The plaintiff disputes that a settlement follows the acceptance and argues that the new rule impliedly incorporates the earlier provision for expiry on the commencement of trial.

[4]                I do not find that to be the case.  There is no conflict inherent in Rule 37B(2) requiring the interpretation the plaintiff suggests.

[5]                The Plaintiff also argues that on common law principles, a reasonable time for acceptance has expired.  I am referred to the decision of Mr. Justice Curtis in Morrow v. Outerbridge(phonetic), unreported, which apparently follows this logic in rejection of a purported acceptance of an offer to settle communicated 18 days into a 20-day trial.  The defendant, in reply, refers to authority under the old rules which suggests that common law principles may not apply to the offer and acceptance process regulated by the rules.  However this may be, I do not think the common law principle argued here indicates an expiry by effluxion of time, in any event.  The offer was ten days prior to trial, a trial which has not yet proceeded to conclusion of the plaintiff’s case.  This, on the face of it, in my view, does not present such an unreasonable delay as to deem an offer, unconditional on its face, lapsed through the effluxion of time.

[6]                The plaintiff argues that the purpose of the offer process is to settle litigation and that this objective is not advanced by allowing a “wait and see” stance by the opposite party.  There may be some force to this, but the remedy is in the hands of the party wanting to avoid this outcome through the structure of the form of the offer, as is now available under Rule 37B.  Further, avoidance of the length of litigation of itself may also have a similar form of a social benefit and the fact that costs may be doubled for the interrupted trial process, continues to be a benefit to the party making the offer.

[7]                The new rule has, I think, two main characteristics not evident under the earlier enactment.  First, the parties are free to structure offers of settlement as they consider appropriate to the case.  And secondly, a generally greater degree of judicial discretion can be employed in the order of costs to be crafted in the circumstances presented by the offer and acceptance process.

[8]                The first of these characteristics frees the parties from the strictures that were evident in the prior rules.  If I were to find implied rules built into the new enactment, the obvious attempt to try and move away from the problems those strictures presented, would be to a degree, defeated.

[9]                Accordingly, I find the acceptance to be viable and to have the effect of settling the issues outstanding in this litigation.

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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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