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Tag: nuisance offers

ICBC "Nuisance Offer" Fails to Trigger Double Costs

One of the most welcome developments under the New Rules of Court (and for a short while prior to their introduction, Rule 37B) was the introduction of discretion to the costs process following trials where formal settlement offers were made.  It used to be that if a Plaintiff had their case dismissed at trial where a formal offer was made before hand (even a $1 offer) the Plaintiff was forced to pay double costs.  Reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, demonstrating this discretion in action.
In last week’s case (Byer v. Mills) the Plaintiff was one of two occupants of a vehicle involved in a serious collision.  Prior to trial the Parties agreed to quantum of $125,000.   The parties could not agree on the issue of liability with ICBC arguing the Plaintiff was the driver of the at-fault vehicle (not the passenger as he alleged).  ICBC made a formal settlement offer of $5,000.
At trial the Plaintiff’s case was dismissed with the Court finding he likely was the driver.  ICBC asked for double costs to be awarded.  Mr. Justice Harris refused to do so finding a nuisance offer that does not provide a genuine incentive to settle should trigger double costs.  The Court provided the following reasons:

[21] It is in these circumstances that one must assess whether the offer of $5,000 plus costs was one that ought reasonably to have been accepted by the plaintiff. Although the prospect of the plaintiff succeeding was always highly uncertain and difficult realistically to assess, I cannot see that it can fairly be characterised as a case that was lacking in some substantial merit. In my view, the offer does not rise above a nuisance offer. The merits of the case, on both sides, and the uncertainties facing all parties, called for a more substantial offer if the offer were to serve the purposes of the Rule. Accordingly, I cannot conclude that the offer was one that ought reasonably to have been accepted by the plaintiff while it was open for acceptance.

[22] In reaching this conclusion, I have approached the question whether the offer was one that ought reasonably to have been accepted by the plaintiff from the plaintiff’s perspective. It will be apparent, however, from my general comments about the inherent uncertainties affecting predicting the merits of the case, that I do not view the offer that was made as objectively reasonable. In that sense, I cannot conclude that it provided a genuine incentive to settle the case. The offer does not possess those characteristics that would justify rewarding the party who was successful at trial with an award of double costs.

[23] I turn to consider the other considerations that may justify an award of special costs, even though the offer is not one that ought reasonably to have been accepted. I approach these factors recognising that the Rule is intended to penalise a party for failing to accept an offer and reward a party who makes a reasonable settlement offer. In brief, I do not find that any of those considerations justify an award of double costs.

[24] Although the plaintiff would clearly have been substantially better off to have accepted the offer, this consideration standing alone is not determinative.

[25] I cannot conclude that the relative financial circumstances of the parties lend support to the conclusion that, nonetheless, an award of double costs is justified.

[26] I am not persuaded that there are any other considerations that would justify an award of double costs. The defendants criticised the cross-examination of their expert, which they characterised as suggesting guilt by association. I did not view the cross-examination as overstepping reasonable professional boundaries.

[27] The application for double costs is dismissed. There will be one set of costs.

"Nominal" ICBC Offer Fails To Trigger Double Costs Award

As previously discussed, BC has a true ‘loser pays‘ system which generally requires the loser of a lawsuit to pay the winners costs.  If a Defendant makes a formal settlement offer and defeats the Plaintiff’s lawsuit the Court has the discretion to award double costs.  Reasons for judgement were released recently by the BC Supreme Court, New Westminster Registry, refusing to make such an order in circumstances where the formal offer was little more than a walk-away offer.
In last week’s case (Habib v. Jack) the Plaintiff was injured while riding as a passenger in the Defendant’s bus.  The parties agreed on the value of the Plaintiff’s injuries but disagreed on the issue of fault.  Prior to trial ICBC made a formal settlement offer of $1,000.  The Plaintiff rejected this offer, proceeded to trial, and had her claim dismissed.
ICBC was awarded costs and asked the Court to award double costs pursuant to Rule 9-1(5).  Madam Justice Ross refused to do so noting that the offer was ‘nominal’ and that it was not unreasonable for the Plaintiff to have her day in court.  The court provided the following helpful reasons:

[15] The defendants submit that having regard to the factors enumerated in the Rule, the court ought to award double costs. Counsel submits that the offer was not nominal; it gave the plaintiff modest recovery and represented a willingness to compromise that the Rule is meant to foster. The offer was made at a time when the discoveries of both parties were complete and the evidence was known. The plaintiff’s position is that this was a nuisance offer and it cannot be said, without applying hindsight, that it ought to have been accepted.

[16] At the time the offer was made, it was clear that the plaintiff had suffered an injury. There was a dispute with respect to liability. Mr. Jack had limited recollection. The only two witnesses were Ms. Habib and Mr. Jack.

[17] In my view the offer was nominal given Ms. Habib’s injury. I agree with the observations of Burnyeat J. in Martin v Lavigne and Neufeld (Costs), 2010 BCSC 1610 at para. 13, that there are situations in which a nominal offer should have been accepted. However, in my view this is not such a case. It cannot be said that it was clear that the action had little chance of succeeding on the merits. Rather, there was a significant risk that the case would be lost on liability. This risk materialized and the action was lost at trial; however, in the circumstances it was not unreasonable for the plaintiff to reject the offer and proceed to trial.

[18] On balance I have concluded that this is not a case to make an order for double costs as sought by the defendants based upon the offer to settle. In the result, the defendants will have their 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.