BC Court of Appeal – Settlement Paying Pennies on the Dollar Beats Losing Your House
You are badly injured through the alleged negligence of others. If you win at trial you can get north of $400,000 in damages. If you lose you will literally lose your house to cover the costs of litigation. When faced with this stark reality a settlement offer that pays less than 1o cents on the dollar may very well be reasonable. The BC Court of Appeal released reasons for judgment today saying as much.
In today’s case (Deo v. Vancouver) the infant plaintiff suffered serious injuries leaving him partially blind while at school. He sued for damages and was largely unsuccessful on proving liability at trial. The Plaintiff’s lawyer valued the claim at over $400,000 but before the liability appeals could be heard a settlement of $35,000 was reached. The Plaintiff, being an infant, could not legally agree to any settlement and judicial permission was needed. The BC Court of Appeal noted that if the lawsuit ultimately proved unsuccessful the costs consequences would be so steep that the Plaintiff’s parents would likely need to sell their house. Appreciating this the risk-based settlement was reasonable and the Court approved it. In supporting the settlement the BC Court of Appeal provided the following reasons:
 Counsel assesses the quantum of damages for non-pecuniary loss in the range of $100,000 to $140,000 and for loss of future earnings in the range of $300,000 to $350,000. The estimate of an adverse costs award if the appeal is unsuccessful is in excess of $100,000.
 Isaac lives with his parents in a house in East Vancouver. If costs are awarded against him, they would have to sell the house to pay the costs. His father says that he has weighed the prospects of success of the appeal against the risk of losing the home and the impact that would have on Isaac and the rest of the family. He says he has concluded that it is in Isaac’s best interests to accept the settlement.
 The parties have consented to the trial judge approving the solicitor’s account without costs.
 Having read the materials provided, it is our view that the settlement is a prudent one, and is in Isaac’s best interests. As was noted in Lotocky, “it is… artificial and misguided to judge the merits of the appeal in isolation from the financial ramifications that would arise from an unsuccessful appeal”: para. 69. Counsel for Isaac acknowledges the “very real” risk that the appeal on liability will be unsuccessful. In light of the serious financial consequences that would flow from an unsuccessful appeal, we agree with the assessment of counsel and that it is in Isaac’s best interests to accept the settlement.
 The settlement is approved in the terms sought. The appeal and cross appeal are dismissed as abandoned on a without costs basis to any party. The matter is remitted to the Supreme Court to Justice Riley for approval of the solicitor’s account.