Tag: Mazur v. Lucas

Formal Settlement Offers and Costs: A Matter of Discretion


As recently discussed, costs consequences following trial where a formal settlement offer is not beat is a matter of judicial discretion.  While the principles behind the exercise of that discretion are reasonably well formulated the costs results can be a little trickier to predict.  Two sets of reasons for judgement were released this week by the BC Supreme Court demonstrating this discretion in action.
In the first case (Khunkhun v. Titus) the Plaintiff advanced a personal injury claim in excess of one million dollars.  She claimed she suffered from “a significant and disabling vestibular injury” as a result of a collision.  The jury largely rejected the Plaintiff’s sought damages and awarded $45,000.
ICBC made a more generous settlement offer prior to trial which the Plaintiff did not accept (about 30% higher than the jury award).   As a result, Mr. Justice Willcock stripped the Plaintiff of her costs from the time of the offer onward.  The Court did not go so far as to order that the Plaintiff pay the Defendant costs finding that it would be unjust.  Mr. Justice Willcock repeated the following reasoning from Madam Justice Humphries in Lumanlan v. Sadler:
Given the significant injury to the plaintiff, which was caused by the defendant’s foolish and reckless behaviour, and the effect on the award of a further reduction for costs, even if not doubled, and taking into account all of the above considerations, in my view it would not be fair or just to require the plaintiff to pay ICBC’s costs after the date of the offer.
In the second case released this week (Mazur v. Lucas) the Plaintiff was awarded $538,400 following a jury trial to compensate her for injuries sustained in a collision.  ICBC appealed and succeeded in having a new trial ordered.
Prior to the second trial ICBC made a formal settlement offer of $300,000.  The Plaintiff rejected this and proceeded to trial again.   This time the jury came in lower awarding $84,000 in damages.
ICBC brought an application seeking costs for both trial.  The result of this would have been financially significant.    Madam Justice Humphries declined to allow this and instead awarded the Plaintiff costs for both trials despite not besting ICBC’s offer.  In exercising its discretion the Court provided the following reasons:
[62] This court has stated many times that parties should be encouraged to settle, and if unreasonable in not doing so, may be punished in costs.  As well, the fact that an award of costs against a party may wipe out their award of damages is not determinative.  However, given all the circumstances that existed at the time the offer was made which did not change throughout the trial, I am not persuaded that the plaintiff ought to be denied her costs on the basis that she ought reasonably to have accepted the offer that was made twelve days before the trial began.  Having in mind the amount of the first award, the narrow issue upon which a new trial was ordered, the amount of the second offer, and the expected similarity of the evidence at the second trial, the plaintiff was reasonable in deciding not to accept the offer and to have the action adjudicated by a second jury.
In addition to this final result, this case is worth reviewing for the Court’s discussion of advance payment orders.  Prior to the second trial ICBC paid the Plaintiff $250,000 in exchange for a stay of execution so the Plaintiff would not collect the damages from the Defendants personally.  Madam Justice Humphries found that an advance payment after judgement should not be factored into a costs assessment.  The Corut provided the following reasons:

[14] The defendants argue that the plaintiff should be deprived of her costs of the second trial as of December 24, 2009, the date on which the negotiated agreement was signed.  They cite cases dealing with situations in which awards at trial are less than an advance, and in which plaintiffs have been deprived of costs as of the date of the advance (McElroy v. Embelton (1996), 19 B.C.L.R. (3d) 1 (B.C.C.A.); Baxter v. Brown (1997), 28 B.C.L.R. (3d) 351 (B.C.C.A.).

[15] However, those cases are all advances before trial.  The basis on which the Court of Appeal in those cases concluded that the date of the advance was relevant to costs was because the plaintiff “had in hand more at the start of the action than the amount of the jury’s verdict.” (see McElroy).  The plaintiff, upon receipt of an advance, must realistically assess his or her claim knowing that proceeding to trial carries a risk in costs (Carey v. McLean, 1999 BCCA 222).

[16] This advance was one paid to avoid execution on an existing judgment, pending an appeal that would proceed regardless of whether the plaintiff wished to accept the money in final settlement of the action or not.  That option was not open to her.  The agreement signed by the plaintiff required repayment if a new trial were ordered and the results were not favourable to her, but did not give her the option of accepting the money and ending the proceedings.  This advance payment, unlike those in the cases cited by the defendant, is not the equivalent of an offer to settle.

[17] The date of the advance is not appropriately considered in these circumstances.

BC Court of Appeal Clarifies Law of Hearsay Evidence in Expert Reports


Expert reports often contain hearsay evidence.  This is especially true in personal injury cases where expert witnesses review pages upon pages of clinical notes of other physicians in arriving at their opinions.  Today the BC Court of Appeal released useful reasons for judgement confirming that hearsay evidence does not render an expert report inadmissible.  The Court further noted that some types of hearsay evidence in expert reports, even if not independently proven at trial, does not necessarily nullify the experts opinion.
In today’s case (Mazur v. Lucas) the Plaintiff was injured in a 2006 BC motor vehicle collision.  At trial the Plaintiff tendered the report of a psychiatrist.  The trial judge ordered that hearsay portions of the report be redacted and did not permit opposing counsel to cross examine the expert with respect to the redacted portions of the report.  Ultimately the Jury awarded the Plaintiff $528,400 in damages.
The Defendant appealed arguing that the trial judge incorrectly redacted hearsay from the expert reports and unreasonably restricted the cross-examination.  The BC High Court agreed and ordered a new trial.  In doing so the Court repeated the following very useful quote from Mr. Justice Sopinka addressing the reality of hearsay in medical diagnosis:
A physician, for example, daily determines questions of immense importance on the basis of the observations of colleagues, often in the form of second- or third-hand hearsay.  For a court to accord no weight to, or to exclude, this sort of professional judgment, arrived at in accordance with sound medical practices, would be to ignore the strong circumstantial guarantees of trustworthiness that surround it, and would be, in my view, contrary to the approach this Court has taken to the analysis of hearsay evidence in general, exemplified in Ares v. Venner, [1970] S.C.R. 608
The BC Court of Appeal went on to provide the following useful summary of hearsay evidence in expert reports in personal injury lawsuits:

[40]         From these authorities, I would summarize the law on this question as to the admissibility of expert reports containing hearsay evidence as follows:

·                 An expert witness may rely on a variety of sources and resources in opining on the question posed to him.  These may include his own intellectual resources, observations or tests, as well as his review of other experts’ observations and opinions, research and treatises, information from others – this list is not exhaustive.  (See Bryant, The Law of Evidence in Canada, at 834-835)

·                 An expert may rely on hearsay.  One common example in a personal injury context would be the observations of a radiologist contained in an x-ray report.  Another physician may consider it unnecessary to view the actual x-ray himself, preferring to rely on the radiologist’s report.

·                 The weight the trier of fact ultimately places on the opinion of the expert may depend on the degree to which the underlying assumptions have been proven by other admissible evidence.  The weight of the expert opinion may also depend on the reliability of the hearsay, where that hearsay is not proven by other admissible evidence.  Where the hearsay evidence (such as the opinion of other physicians) is an accepted means of decision making within that expert’s expertise, the hearsay may have greater reliability.

·                 The correct judicial response to the question of the admissibility of hearsay evidence in an expert opinion is not to withdraw the evidence from the trier of fact unless, of course, there are some other factors at play such that it will be prejudicial to one party, but rather to address the weight of the opinion and the reliability of the hearsay in an appropriate self-instruction or instruction to a jury.

[41]         The common law is supplemented by the Rules of Court concerning expert reports.  The Rules of Court in force at the time of this trial required an expert to state “the facts and assumptions upon which the opinion is based”.  (Rule 40A(5)(b)).  Rule 11-6(1) which replaces Rule 40A requires the expert to state:

(f) the expert’s reasons for his or her opinion, including

(i)  a description of the factual assumptions on which the opinion is based,

(ii)  a description of any research conducted by the expert that led him or her to form the opinion, and

(iii)  a list of every document, if any, relied on by the expert in forming the opinion.

[42]         New Rule 11-6 expands on what an expert was required to state under old Rule 40A, but does not alter the general principle that it is essential for the trier of fact to know the basis of an expert opinion so that the opinion can be evaluated.  The Rule has a dual purpose.  The second purpose is to allow the opposing party to know the basis of the expert’s opinion so that they or their counsel can properly prepare for, and conduct, cross-examination of the expert, and if appropriate, secure a responsive expert opinion.  Thus, the result of these reasons would be the same if this case had arisen under the new Rules.  There is nothing in these Rules touching directly on the question of the admissibility of hearsay evidence in expert reports.

I have previously written (here and here) that Plaintiff’s need to be wary if relying on a radiologists findings in support of a personal injury claim at trial and ensure that the evidence is independently proven at trial.  Today’s case appears to potentially soften this requirement somewhat.

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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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