Tag: Rule 9-1

No Costs Consequences With Formal Offer Bested by "Almost Negligible Difference"

Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, refusing to award discretionary costs where a defence formal settlement offer was not beat by a plaintiff by an “almost negligible difference“.
In today’s case (Zhao v. Yu) the Plaintiff was injured in a collision and sued for damages.  Prior to trial the Defendant issued a formal settlement offer of $93,500.  The Plaintiff declined and proceeded to trial where damages of $91,700 were assessed. The Defendant asked for trial costs but the Court dismissed the application finding it was not unreasonable for the plaintiff to reject the offer and proceed to trial.  In reaching this decision Madam Justice Baker provided the following reasons:

[13]         While in hindsight the Defendant’s Offer was indeed reasonable, that is not the test.  Rule  9-1(5) and 9-1(6) were not intended, in my view, to punish parties merely because the party’s assessment of the value of the claim proves incorrect, unless that assessment was based on irrelevant considerations; a clearly inadequate review of the available evidence and applicable authorities, or was, in view of the facts known at the time, unreasonable.

[14]         Here, the parties differed, as did some of the expert witnesses, about the Plaintiff’s prognosis; and the extent to which the injuries resulting from the accident, would affect his capacity to earn income in future.  While the Plaintiff did not succeed on this issue, I cannot say it was unreasonable for him to pursue the claim; or to believe that there was some prospect of success, even if there was a risk he would not succeed.  I note also the Plaintiff’s submission, which I consider persuasive, that even a slightly higher award for special costs or non-pecuniary damages would have resulted in an awarded that exceeded the Defendant’s Offer.

[15]         Having weighed the relevant factors, I am satisfied that this is a case in which I should award the Plaintiff the costs of the entire action, including all steps taken after the date of delivery of the Defendant’s offer, notwithstanding the Defendant’s Offer.

"Late" Formal Offer Beat by 9% Triggers Double Costs

Reasons for judgment were released today by the BC Supreme Court, Vancouver Registry, finding a formal offer that was bested by 9% and was delivered a few days prior to trial was capable of triggering double costs.
In today’s case (Kostinuk v. Fellowes) the Plaintiff was involved in a personal injury prosecution and issued a formal offer to settle his claim, three days before trial, for $175,000.  After a 6 day trial judgement of $192,345 was obtained.
The Defendant argued, among other things, that no post offer double costs should be awarded as the offer was issued too late.  In rejecting this argument and awarding double costs Madam Justice Brown provided the following reasons:

[10]         Reasonableness is to be assessed by considering such factors as the timing of the offer, whether it had some relationship to the claim (as opposed to being simply a nuisance offer) and whether it could be easily evaluated and whether some rationale for the offer was provided (Hartshorne v. Hartshorne, 2011 BCCA 29 at para.27). Here, although the offer was delivered on the Friday before the commencement of trial, there was an adequate period of time within which to evaluate the offer. As the plaintiff submits, by that point in time all of the evidence was available to the party. They had exchanged earlier offers. Discoveries were complete, expert opinions available. The defence would have been well able to assess the offer in the time available to it. Moreover, the plaintiff had provided an explanation that followed the offer within a few hours. The offer was within the range of likely outcomes. In the circumstances, the defendant would be able to assess the reasonableness of the offer and make a decision on it.

[11]         The judgment was $192,354.05 (including gross wage loss) as such, the offer is just slightly below the amount awarded by the court.

[12]         I do not have information as to the arrangements between the plaintiff and his counsel. Accordingly, I cannot assess the relative positions of the parties and their ability to finance the trial.

[13]         The other factor which I consider appropriate in this particular case is that the defence was conducted by the insurer who was well able to assess the risks of proceeding to trial. The insurer did so knowing that it could be exposed to an award of double costs should Mr. Kostinuk succeed.

[14]         In my view, having considered all of the factors, it is appropriate that the defendant pay the plaintiff costs at Scale B for the steps taken up to and including the date the plaintiff served the formal offer to settle with double costs thereafter, excluding disbursements which will be at the normal rate.

ICBC Punished 25% for Unproven Fraud Allegation

Reasons for judgement were released today by the BC Supreme Court, New Westminster Registry, finding that unproven allegations of fraud can be used as a factor to minimize a successful party’s costs entitlement after beating a formal offer.
In today’s case (Gupta v. Doe) the Plaintiff was involved in three separate collisions and sued for damages.   At trial the Plaintiff was awarded just over $43,000.  Priro to trial ICBC made several formal offers, the first at $90,000 and the last at $164,000.  Having beaten their formal offer by a considerable margin ICBC asked for post offer costs.
The Court agreed that ICBC was entitled to post offer costs and would have awarded these fully but did not due to ICBC’s unproven allegations of fraud with respect to one of the collisions.  In reducing ICBC’s costs award Mr. Justice Jenkins reasoned as follows –

[27]         One additional factor which I consider to be appropriate for consideration was the allegation of fraud on the part of the defence in the defence of the 2009 accident. The circumstances of that accident which involved a hit and run driver were included in the testimony of the plaintiff and no explanation was provided by the defence to support this most serious of allegations which subsequently was abandoned by the defence.

[28]         In these circumstances, it is appropriate that the plaintiff be awarded costs of the action for damages arising from the 2009 action. Such allegations should never be made without serious consideration by the accuser of the ability to be able to prove the allegations. In this case, it would appear as though the allegations could never have been substantiated and as a result, it is a factor in favour of the plaintiff in considering costs. The problem that follows is how to reflect this conduct on the part of ICBC in the award of costs.

[29]         I have come to the conclusion that this factor, i.e. the unproven and abandoned allegation of fraud and the third factor enumerated under Rule 9-1(6), i.e. the relative financial circumstances of the parties should be reflected in the award of costs with a 25% reduction in any amount of costs otherwise payable to the defendants.

[30]         Accordingly, the plaintiff is entitled to her full costs on Scale B in all three actions to August 14, 2014.

[31]         Considering the options available to a judge under R. 9-1(5), the factors which may be considered under R. 9-1(6) and all other factors where an offer has been made, I award 75% of one set of costs on Scale B to the defence in respect of all steps taken after delivery of the offer of settlement of August 14, 2014 as contemplated under R. 9-1(5)(d).

A Costs Argument That "Ought Not To Have Been Made"

Reasons for judgement were released today by the BC Supreme Court, Victoria Registry, criticizing a costs argument advanced by defense counsel after failing to best the Plaintiff’s formal settlement offer at trial.
In today’s case (Tenhunen v. Tenhunen) the plaintiff was injured when she tripped and fell on a deficient ramp constructed by the Defendant.  At trial both were found equally to blame for the incident.  Prior to trial the Plaintiff made a formal settlement offer of $80,000.  The Defendant did not accept this and the trial damages awarded amounted close to $125,000.
The Plaintiff sought post offer double costs but the Defendant opposed arguing, in part, that the Defendant was of modest means.  The court, suspicious of this argument asked about whether the claim was insured to which Defence counsel refused to answer citing the Code of Professional Conduct.  Plaintiff’s counsel then “provided a copy of the policy of insurance that the defendant was obliged to produce” which led to the following judicial criticism of the defence argument and an award of partial post offer double costs –

[27]        The defendant’s principal argument is based on Rule 9-1(6)(c), as she points to her own unfortunate circumstances, subsisting barely on a disability pension, and contrasts this to the far better financial position enjoyed by the plaintiff, who had been employed on an income between $77,000 and $101,511 in the five years between 2009 and 2013. The defendant argues that this financial disparity militates against an order for double costs. This submission, bearing in mind the evidence at trial, raises a logical question of insurance coverage.

[28]        The plaintiff and defendant are mother and daughter, respectively. They were and are close. The defendant ordinarily lives in the rented house where the plaintiff fell and suffered her injury, and from the photographs submitted into evidence, that residence would not suggest an ability to pay substantial damages. It is unlikely in the extreme that the plaintiff would sue her daughter, and proceed to trial, if the only prospects of recovery were limited to the defendant’s disability pension.

[29]        While the defendant’s straightened finances would argue against her being able to afford insurance premiums, those same financial constraints would argue more strongly against the defendant being able to afford to retain senior counsel for the entire action, or to offer to settle her mother’s claims for $80,000 all-inclusive on October 30, 2014. I recognize that an offer to settle is not a guarantee of payment, as it would simply have entitled the plaintiff to enter judgment for the amount of the offer, had she accepted it. In these circumstances, however, the plaintiff would have every reason to know that her daughter had no ability to pay the amount offered from her own funds.

[30]        The defendant’s argument under Rule 9-1(6)(c) made the question of insurance relevant to the costs issue, and by memorandum to counsel I invoked Rule 7-1(4) and asked if there were a policy of insurance to which the defendant could turn for indemnity. The Rule provides:

Despite subrule (3), information concerning the insurance policy must not be disclosed to the court at trial unless it is relevant to an issue in the action.

[31]        Counsel for the defendant replied to this question in this way:

Finally, and more on the basis of a footnote, the Court has inquired as to whether there is a policy of insurance that the Defendant may look to for indemnification of damages and Costs. It would be entirely inappropriate for defence counsel to make any submission as to whether Ms. Kim Tenhunen may or may not look to a policy of insurance for indemnification. Defence counsel has a dual retainer in the circumstances and owes an obligation to both the Defendant and to an insurer not to compromise their respective interests: Professional Conduct Handbook, Chapter 6.4(a-d).

[32]        The Code of Professional Conduct for British Columbia (BC Code) replaced the Professional Conduct Handbook on January 1, 2013. I have examined the previous rule cited by counsel, and see nothing there to prevent the disclosure requested. I have examined the BC Code, with the same results.

[33]        The most charitable interpretation of counsel’s argument is that it is hypothetical. Even on that assumption, it still does not respond to the question posed under Rule 7-1(4), and that is whether the existence of a policy of insurance is relevant to the costs issue, and, if it is, whether there is a policy of insurance available to the defendant in this case.

[34]        How a lawyer’s duties are supervised by the Law Society – to both an insurer who retains the lawyer and the insured on whose behalf the lawyer acts under the retainer – have little to do with the question raised in this application. Nothing in the question put to counsel could raise a risk of dividing counsel’s loyalties to an insurer and insured, assuming that is the relationship that has existed.

[35]        Counsel for the plaintiff has provided a copy of the policy of insurance that the defendant was obliged to produce as part of pre-trial document discovery. The argument against double costs based on the parties’ relative financial circumstances ought not to have been made.

It Is Not Open For a Trial Judge To Award a Defendant Double Costs Where a Plaintiff Obtains Judgement

Reasons for judgement were released today by the BC Court of Appeal (C.P. v. RBC Life Insurance Company) confirming that a trial judge does not have the option of awarding a Defendant double costs in circumstances where a Plaintiff obtains a judgement at a quantum below a Defendant’s formal offer to settle.  In noting this restriction in judicial costs options the Court provided the following reasons:

[90]         Neither the trial judge nor the judge at Minhas made reference to the decision in Gulbrandsen v. Mohr, 2013 BCSC 1481. In Gulbrandsen the trial judge, in reasons indexed at 2013 BCSC 959, initially awarded the plaintiff costs up to the date of the defendant’s offer to settle, and double costs to the defendant thereafter. He then reconsidered the double cost award. After reviewing numerous authorities including A.E., A.E. Appeal,Ward v. Klaus, 2011 BCSC 99 and Currie v. McKinnon, 2012 BCSC 1165, he concluded that it was not appropriate to make an award of double costs to a defendant where the plaintiff had obtained a judgment.

[91]         I am of the same opinion. I do not believe that R. 37B intended to change the long-standing practice concerning the circumstances when double costs could be awarded. A plaintiff who obtains a judgment for less than an offer to settle is already subject to sanctions: R. 9-1(6)(a) allows the court to deprive the successful plaintiff of costs to which it would otherwise be entitled. Rule 9-1(5)(d) provides an even more punishing outcome as the plaintiff is not only deprived of costs he or she would otherwise receive, but must also pay the defendant’s costs subsequent to the offer to settle. To also allow a defendant double costs would skew the procedure in favour of defendants and unfairly penalize and pressure plaintiffs. I would adopt in that regard the comments of Madam Justice Adair in Currie:

[18]      I think it certainly can be argued that if a defendant who has made an offer to settle in an amount higher than the amount awarded to the plaintiff at trial (and that is what has been done in this case) was then awarded double costs, this would skew the procedure in favour of defendants and unfairly penalize and pressure plaintiffs.  This is because a plaintiff who rejected an offer to settle would potentially risk a triple cost penalty if he or she were to win at trial an amount less than the offer.  The plaintiff would suffer loss of the costs that he or she would normally receive on obtaining judgment at trial, and face double costs payable to the defendant.

[19]      In my view, there is a good reason to apply Rule 9-1 in a way that is even-handed, or more even-handed, as between plaintiffs and defendants.  I would say for this reason one would expect to see double costs awarded to a defendant, using the offer to settle procedure, in exceptional circumstances only, such as a situation where the plaintiff’s claim was dismissed all together after a plaintiff rejected an offer to settle.

[92]         In the result, I find that it was not open for the trial judge to award double costs to the defendant. It was an error in principle to do so. The decision in Minhas which made a similar order was also wrongly decided and should not be followed.

Double Costs Rejected In Face of Plaintiff Credibility Concerns

Reasons for judgement were released today by the BC Supreme Court, New Westminster Registry, rejecting a request for double costs following a trial where a Plaintiff beat her formal settlement offer by a slim margin.
In today’s case (Griffith v. Larsen) the Plaintiff suffered an injury in a collision.  Prior to trial the plaintiff provided  a formal settlement offer of $85,000 which was rejected.  At trial she was awarded $85,159.  The Plaintiff asked for double costs but Mr. Justice Affleck refused to award these finding it would not be appropriate in the face of credibility concerns and further with the Defendant enjoying some success at trial on one of the most contentious issues.  In rejecting the request for double costs the Court provided the following reasons:

[5]             I have considered two factors which have influenced my decision against awarding double costs. The first is my findings of credibility which were not favourable to the plaintiff. While I concluded the plaintiff had suffered soft tissue injuries of some duration which were deserving of an award of damages, I also concluded that she had not given her evidence with candour. An award of double costs is meant in part to penalize a party for failing to accept a reasonable offer. On the other hand a party who has not been candid with the court at least in some instances ought not to be rewarded with double costs even if her damage award exceeds the offer. This is one of those instances.

[6]             The second factor I have considered is the defendants’ relative success on the most contentious issue at the trial. The plaintiff advanced a claim far exceeding the award which was largely predicated on the proposition she would need surgery to overcome a disabling thoracic outlet syndrome. I did not accept the plaintiff’s evidence on that issue. The defendants largely succeeded in persuading me that the thoracic outlet syndrome, if the plaintiff actually experienced it, had little effect on her physical condition. That is a further reason for concluding it is not appropriate to penalize the defendants with an award of double costs.

[7]             In Mudry v. Minhas, 2010 BCSC 1110, Kelleher J. discussed apportionment of an award of costs for relative success on an issue under the then Rule 57(15). While the court concluded the plaintiff had not met the test for apportionment, the plaintiff’s success in that case on the issue of fault (although no damage was found and the action dismissed) was a relevant factor under Rule 37B(6)(d), now Rule 9-1(5)(b), on considering if the defendant was entitled to double costs when there had been a defence offer, which in Mudry obviously exceeded the damage award which was nil..

[8]             I acknowledge there is some merit to the plaintiff’s submission that, notwithstanding the absence of success on the issue of thoracic outlet syndrome, the plaintiff’s offer took into account the risk of failure on that issue. Nevertheless, in the circumstances of this action I am unwilling to penalize the defendants in costs when they largely succeeded on that question. The usual rule will prevail that party and party costs on Scale B follow the event.

"Short Fuse" Formal Settlement Offer Triggers Double Costs

Reasons for judgment were released today by the BC Supreme Court, Vancouver Registry, addressing whether a formal settlement offer open for only 3 days could trigger costs consequences.
In today’s case (Henry v. Bennett) the Plaintiff was involved in a 2008 collision and sued for damages.  The claim was ultimately dismissed with the Plaintiff being at fault for the crash.  Prior to the trial the Defendant provided a formal offer of $30,000 which was only open for acceptance for three days.
The Plaintiff argued that the offer should not attract double costs in part due to its short window.  Madam Justice Ballance disagreed finding given the significant liability risks at trial it was a reasonable offer.  In addressing its short lifespan not being a barrier the Court provided the following reasons:

[41]         I would ordinarily regard a three-day fuse attached to an offer that was delivered close to the eve of trial, where it would be expected that the party would be engrossed in the demands of trial preparation, as posing an unreasonable time constraint within which to give it meaningful evaluation.  The difficulty facing Mr. Henry, however, is that due mainly to his own damaging discovery evidence, he ought reasonably to have anticipated that he faced significant exposure of not only faring poorly on the issue of liability, but losing his case altogether.  Knowing, as he did, his harmful evidence, Mr. Henry should have appreciated the deep weakness of his claim and the risk of significant apportionment against him or the outright dismissal of his suit and his exposure for an adverse costs award.  All things considered, the 2011 Offer was one that ought reasonably to have been accepted by Mr. Henry.

[42]         With respect to other the pertinent factors, in dismissing Mr. Henry’s case, the Court placed heavy emphasis on his discovery evidence concerning liability for the accident.  Relatively little is known about Mr. Henry’s specific financial circumstances.  Based on the evidence at trial, it is reasonable to infer that his financial situation is modest.  However, that, of itself or in combination with any other factor, is not reason enough in this case to refuse the defendant an award of double costs.

[43]         The defendant is entitled to costs of this proceeding at Scale B up to and including March 8, 2011, and double costs thereafter.

Double Costs Denied Following Modest Besting of Formal Settlement Offer

Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, denying a Plaintiff double costs after modestly beating a pre-trial formal settlement offer.
In today’s case (Barnes v. Lima) the Plaintiff was injured in a collision and sued for damages.  The morning before trial the Plaintiff tabled a $60,000 formal settlement offer.  ICBC rejected this offer and proceeded to trial where damages just over $67,000 were assessed.  The Plaintiff applied for double costs although the Court did not award these finding it was reasonable not to accept the last minute offer.  In reaching this decision Mr. Justice Weatherill provided the following reasons:
[2]             The action arose from injuries sustained by the plaintiff in a motor vehicle accident. It was commenced on September 18, 2012. It was a fast track action commenced under Rule 15-1 of the Supreme Court Civil Rules, B.C. Reg. 168/2009 (the “Rules”). The trial was heard on June 24 to 26, 2014. It lasted 3 days. My Reasons for Judgment were pronounced on July 11, 2014, indexed as 2014 BCSC 1282. The plaintiff was awarded $67,214.19.
[3]             On June 23, 2014, the morning before commencement of the trial, the plaintiff communicated a formal offer to settle the claim for $60,000 plus reasonable disbursements. The offer was stated to be open for acceptance until that same afternoon at 4 p.m. The defendant did not respond to that offer, although it had responded to earlier settlement offers from the plaintiff including by making his own formal offer to settle for $39,651.69 plus funding for 12 active rehabilitation sessions…
[9]             I have considered how the offer compares to the amount ultimately awarded after trial. The award at trial was only $7,214.19 more than the plaintiff’s offer. As matters transpired, it turned out to have been a reasonable offer, although it was a short-fuse offer made on the eve of trial. It should have been made weeks earlier. Be that as it may, it was straight forward and contained no ambiguities. Counsel for the defendant candidly acknowledged that his client had sufficient time before the trial in which to consider it. However, the fact that the award at trial was greater than the offer is not determinative: Ward v. Klaus, 2012 BCSC 99 at para. 46. The reasonableness of a decision not to accept an offer to settle must be assessed not by reference to the award that was ultimately made but rather the circumstances existing when the offer was open for acceptance: Ward, at para. 36.
[10]         On the eve of the trial, the defendant had a legitimate defence to the plaintiff’s claim, particularly his claim for loss of capacity which in his earlier communications to the defendant the plaintiff had indicated was significant. The plaintiff did not break his settlement offer into its components and provided the defendant with no ability to assess how much of it was to compensate the plaintiff for his loss of capacity claim. At the time the offer was communicated, there was a reasonable possibility that the plaintiff would not recover anything for that claim, which ultimately proved to be the case. It was reasonable for the defendant to wish to test the plaintiff’s position that his inability to work overtime at Carter Motors was due to the accident and not to other factors such as his marriage, particularly in the absence of supporting documentation.
[11]         Moreover, most of the plaintiff’s injuries were soft-tissue in nature. He had a pre-existing right shoulder injury. There were live issues regarding whether the plaintiff’s T-4 vertebra fracture had healed and, if so, when, as well as the plaintiff’s credibility relating to the extent that his injuries had affected his life. Parties should not be unduly deterred from bringing meritorious, but uncertain, defences because they fear a punishing costs order: Currie v. McKinnon, 2012 BCSC 1165 at para. 20.
[12]         In addition, the plaintiff provided the defendant with several photographs of the plaintiff’s carpentry skill but gave no explanation for how he intended to rely upon those photographs until after his settlement offer had expired.
[13]         The court has a broad discretion when determining the issue of costs: Ward at para. 33.
[14]         In my view, having considered all of the foregoing circumstances, the offer was not one that the defendant ought reasonably to have accepted.
 

"Walk Away" Offer Fails to Trigger Double Costs in Liability Trial

Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, addressing a defence application for double costs after a Plaintiff’s personal injury claim was dismissed.
In this week’s case (Miller v. Emil Anderson Co. Ltd.) the Plaintiff was involved in a motor vehicle collision alleging that an unidentified vehicle contributed to the incident.  Prior to trial the Defendant made a formal settlement offer of $1 which “expressed the defendants’ belief that the Court would conclude that Mr. Miller had suffered no compensable injury.”
Ultimately the Plaintiff’s claim was rejected with the Court concluding that “memory and perception of the key events preceding his loss of control of his vehicle were not reliable.”.  Despite this the Court found the walk-away offer was not reasonable as the plaintiff had a sincere belief in his perception of the event and that “ had he accepted the defendants’ offer, he would have been giving up, without adjudication, a claim that he believed had merit“.
In dismissing the Defendant’s request for double costs Madam Justice Ballance provided the following reasons:
[15]                      In the present case, Mr. Miller proceeded upon his hypothesis as to how the accident occurred, including the purported role of another vehicle.  He tendered no expert evidence in the field of engineering and/or accident reconstruction in support of his theory.  In weighing the evidence, I concluded that Mr. Miller had not proved his case on a balance of probabilities.  In reaching that conclusion, I found that his memory and perception of the key events preceding his loss of control of his vehicle were not reliable.
[16]                      Despite the frailties in Mr. Miller’s testimony and his faulty recall of events, I did not doubt that Mr. Miller’s perception of events, including his theory as to how the accident occurred, was sincere.  He did not attempt to mislead or deceive the Court.  Had he accepted the defendants’ offer, he would have been giving up, without adjudication, a claim that he believed had merit.  A belief that was neither groundless nor frivolous…
[18]                      The Offer is to be considered in the context of a serious liability issue where neither side called expert engineering or accident reconstruction evidence in relation to the pivotal issue of what had caused the accident.  Mr. Miller was aware that he and the defendants held conflicting versions of the material events and that there was a risk that, if the Court found that the evidence did not support his case, his action would be dismissed.  However, it does not follow that the nominal Offer ought reasonably to have been accepted by Mr. Miller at any time.  As was the case in Stuart, the Offer provided nothing to Mr. Miller in relation to the claim itself and proffered little meaningful benefit to him.
[19]                      The evidence indicates that Mr. Miller was in his early 70s at the time of the accident and was retired or semi-retired from prospecting.  Beyond that, there was no cogent evidence of his financial circumstances and I am therefore unable to agree with his counsel’s submission that it was clear he is impecunious.
[20]                      Although Mr. Miller ultimately failed to make out his case on a balance of probabilities, I would not characterize his refusal to accept the Offer as unreasonable.
[21]                      Weighing the pertinent factors and giving the most weight to the fact that I am unable to say that it was unreasonable for Mr. Miller to refuse the Offer, I consider it a fair exercise of my discretion to decline to order double costs.  An award of costs at Scale B in favour of the defendants is appropriate in this case and will likely be of significant consequence to Mr. Miller.
[22]                      Accordingly, the defendants’ application for double costs is dismissed.  They will have their costs at Scale B.

Defendant Fails "To Recognize The 'Capital Asset” Approach"; Ordered To Pay Double Costs

Update August 5, 2015 – The below damages for Diminished Earning Capacity were overturned by the Court of Appeal and a new trial was ordered on the issue.
_____________________________________
Reasons for judgement were released today by the BC Supreme Court, Penticton Registry, ordering a Defendant to pay double costs for refusing to accept a bested pre-trial formal settlement offer.  In reaching this result the Court was critical in the Defendant’s failure to appreciate the ‘capital asset’ approach in assessing diminished earning capacity awards.
In this week’s case (Ostrikoff v. Oliveira) the Plaintiff was injured in a 2009 collision.  Prior to trial the parties exchanged a variety of formal settlement offers with the Plaintiff’s last offer coming in at $325,000 and the Defendant’s last offer being $100,000.  The matter proceeded to trial where damages of over $550,000 were assessed.  The Plaintiff was awarded post offer double costs and in finding the Defendant should have accepted the Plaintiff’s offer the Court provided the following comments:
[11]         The plaintiff, on the other hand, marshalled a combination of both expert and lay evidence.  The essence of the plaintiff’s case was that the plaintiff was involved in unique and highly skilled work which had a significant physical component and that the plaintiff’s chronic pain and physical impairments threatened both his business and his sole means of livelihood.  The uncontradicted expert evidence was that the plaintiff was not a suitable candidate for retraining. 
[12]         All of this was known to the defendant well before the trial began.  Expert reports had been delivered from orthopaedic surgeons, treating physicians, a functional capacity evaluator, a vocational consultant, a cost of care consultant, and an economist (regarding future loss multipliers).  No rebuttal reports were prepared by the defendants and much of the evidence was uncontradicted at trial.
[13]         Plaintiff’s counsel provided the defendant with a detailed rationale for the quantum of the first settlement offer in the amount of $325,000 made on March 8, 2013.  The nature and structure of the claim became obvious at that point, if it had not already been obvious beforehand.  Service of the plaintiff’s expert reports would have alerted the defendant to the possibility of a very significant claim being presented and possibly succeeding at trial. 
[14]         The only submission made by the defendant in defence of its refusal to accept the plaintiff’s settlement offer is that there was an absence of any “documented pecuniary loss” and of any expert or other reliable evidence supporting any pecuniary loss, whether past or future.  The submission, and indeed the defence’s entire approach to both the case and the settlement offer, fails to recognize the “capital asset” approach to assessment of damages for both past and future earning capacity in circumstances where the financial loss is not easily measurable. 
[15]         In my opinion, the February 17, 2014 settlement offer made by the plaintiff was reasonable and one that ought reasonably to have been accepted by the defendant before the commencement of trial.  A careful assessment of the strength of the plaintiff’s case on the eve of trial, having regard to the expert reports and the proposed lay testimony, as well as the principles of damages assessment in chronic pain cases involving potentially significant loss of capacity would have, and should have, resulted in a conclusion that a recovery at trial of sums in excess of the offer was a realistic prospect.  Instead, relying almost exclusively on tactics limited to cross-examination and putting the plaintiff to strict proof of his case, the defendant chose to proceed to trial to see what might happen.  Defendants are free to litigate the case in such fashion as they consider appropriate.  But as stated in Hartshorne, above, “[l]itigants are to be reminded that costs rules are in place to encourage the early settlement of disputes by rewarding the party who makes a reasonable settlement offer and penalizing the party who declines to accept such an offer”.
[16]         For these reasons, I exercise my discretion to award party and party costs to the plaintiff under Scale B up to February 17, 2014, and double that scale for all steps taken in the proceeding thereafter.
 

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ERIK
MAGRAKEN

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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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