Last month I discussed the fact that withdrawn formal settlement offers are capable of triggering costs consequences. Reasons for judgement were released recently confirming this fact and awarding a Plaintiff double costs after besting a formal settlement offer which was withdrawn in the course of trial.
In the recent case (Pitts v. Martin) the Plaintiff was injured in a 2008 collision. The injuries included chronic soft tissue injuries and post traumatic stress which limited the Plaintiff in physical tasks.
Prior to trial she provided a formal settlement offer of $100,000. During the course of the trial the Plaintiff withdrew her formal offer. The trial judgement exceeded her offer by $7,500. The Plaintiff asked for double costs. The defendant objected arguing a withdrawn offer could not trigger costs consequences. Mr. Justice Dley disagreed and awarded double costs. In doing so the Court provided the following reasons:  …I am satisfied that in a case like this, an offer made on May 15th would have given the defendant sufficient time to make a reasoned analysis and respond in a timely fashion. It is not an offer that was made on the eve of the trial commencing, without an opportunity to have it fully considered. It is no impediment that the offer was withdrawn at the close the the Plaintiff’s case. I am satisfied that this is an appropriate case for double costs following the offer… To my knowledge this judgement is not publicly available. As always, I’m happy to provide a copy to anyone who contacts me and requests one.
Adding to this site’s archived posts of costs consequences following trials with formal settlement offers, reasons for judgement were released this week by the BC Supreme Court, New Westminster Registry, addressing this topic following a ‘liability only’ trial.
In this week’s case (Cyr v. Blaine) the Plaintiff was involved in a 2009 collision. The parties agreed that, subject to proving fault, the value of the claim was $60,000. The parties could not agree on fault both arguing the other was to blame. Prior to trial the Plaintiff delivered a formal settlement offer of $50,000.
At trial the Defendant was found fully at fault entitling the Plaintiff to the agreed damages of $60,000. Mr. Justice Saunders found that it was appropriate to award the Plaintiff post offer double costs in these circumstances. In doing so the Court provided the following reasons:
The defendants say that it was reasonable for them to try the case on the basis of their theory that the plaintiff had a duty to look to her left as she passed by the front of the vehicle that had stopped for her in the intersection. But even if the plaintiff had been under an obligation to anticipate that there might be another vehicle in the same lane as the stopped vehicle, attempting to pass that stopped vehicle on the left, the defendants had no evidence that, by the time she would have been able to see the defendants’ vehicle, she would have been able to bring her own vehicle to a stop in time to avoid the collision, given the defendants’ speed.
The defendant Mr. Blaine passed a stopped vehicle, on its left, when he was in the same lane as that vehicle. As I found, it ought to have been apparent to Mr. Blaine from the opening in the divider separating eastbound and westbound traffic that he was passing through an intersection, and that cars travelling in his direction had stopped to let a vehicle or vehicles through the intersection. By the time the subject offer was delivered, it ought to have been apparent to the defendants that they would be found wholly or at least substantially liable for the accident.
Given that damages had been agreed at $60,000, the plaintiff’s $50,000 offer represented a discount of roughly 17%, or, to put it another way, roughly a 50% chance of a finding of one-third contributory negligence on the plaintiff’s part. It was an offer that reasonably ought to have been accepted upon delivery.
The plaintiff, I find, is entitled to double costs of all steps taken after the offer was delivered.
In my continued efforts to track the judicial shaping of Rule 9-1, reasons for judgement were released recently by the BC Supreme Court, New Westminster Registry, ordering double costs following trial where a Plaintiff bested a withdrawn formal settlement offer.
In the recent case (Bartel v. Milliken) the Plaintiff was injured in a 2008 collision. Prior to trial the Plaintiff delivered a formal settlement offer of $29,800. This offer was withdrawn after trial but before judgement. The trial ended in March of 2012 and judgement was delivered in April. The judgement exceeded the Plaintiff’s formal offer by abot $9,000. The Plaintiff applied for post offer double costs. The Defendant argued these should not be awarded since the offer was withdrawn. Madam Justice Gerow rejected this argument and awarded post-offer double costs. In doing so the Court provided the following reasons:
 As stated earlier, the defendants submit the fact that Ms. Bartel withdrew her offer after trial is a factor which weighs against the awarding of double costs because it deprived the defendants of the ability to accept the offer at a later date as contemplated by the rule.
 However, at the same time the defendants concede that the intention and spirit of the rule governing formal offers to settle is to avoid the cost of a trial. In my view, the fact that Ms. Bartel withdrew her offer to settle between the time the trial ended and judgment was rendered is not a factor that weighs against an award of double costs.
Interesting reasons for judgement were released this week by the BC Supreme Court, New Westminster Registry, discussing the ‘flexibility‘ that the New Rules of Court give Judges in making costs awards following trials where formal settlement offers were made.
In today’s case (Cairns v. Gill) the Plaintiff brought an ‘exaggerated’ personal injury claim to trial following a 2005 motor vehicle collision. ICBC made an early formal settlement offer in 2006. ICBC’s offer was modest at just over $1,200 plus costs. The Plaintiff rejected the offer and proceeded to trial. The trial did not go well and the Jury largely rejected the Plaintiff’s claim awarding just over $850 in total damages.
Having beaten their formal offer ICBC applied for an order that the Plaintiff pay their post offer Bill of Costs which was expected to exceed $16,000. Despited the ‘exaggerated’ nature of the claim Madam Justice Arnold-Bailey found that such a result was unjust. The Court stripped the Plaintiff of her post offer costs and disbursements however did not award ICBC their costs. In reaching this result the Court provided the following reasons demonstrating the flexible (but perhaps somewhat unpredictable) nature of the current Civil Rules: The defendants seek costs and disbursements following the date of the offer to settle, despite the plaintiff obtaining judgment. This is available pursuant to Rule 9-1(5)(d)…
To make such an order would have a very negative effect on the plaintiff, and have the broader effect of further discouraging those with legitimate claims from bringing their actions in this Court when the defendant, funded by an insurer, has deeper pockets with which to bear the risk of a plaintiff achieving only a minor or, indeed, a pyrrhic victory.
It is clear from the rules and the jurisprudence that costs consequences are to guide counsel in litigation decisions. The object of the Rules is, “to secure the just, speedy and inexpensive determination of every proceeding on its merits.” This object is to be conducted, as far as is practicable, with regard to proportionality. While this object is frustrated to some extent by a claim worth $851 proceeding to its conclusion at a Supreme Court jury trial where it was more appropriate for determination in Provincial Court, the object and proportionality principle do not appear to accord with the potential cost of litigation in this case. The bill of costs of the defendants is expected to exceed $16,000.
I note that the Court of Appeal in Giles recognized when dealing with the issue of double costs that “all litigation comes with a degree of risk,” and that, “when faced with settlement offers, plaintiffs must carefully consider their positions.” However, the court also indicated that plaintiffs, “should not to be cowed into accepting an unreasonable offer out of fear of being penalized with double costs if they are unable to ‘beat’ that offer.” These considerations also appear relevant in these circumstances.
In this case, pursuing a valid, although exaggerated, personal injury claim to trial, where the offer to settle did not provide a genuine incentive to settle in the circumstances, may, in the face of a defence funded by ICBC, cost the plaintiff almost twenty times what was awarded at trial. It seems consistent with the object of the Rules generally, and of Rules 9-1 and 14-1(10), to have regard to the need to emphasize litigation decisions that direct cases to the appropriate forum without disproportionately penalizing a party that had some success, however limited.
To this end, as considered in relation to the first issue, Rule 14-1(10) permits the Court to limit a plaintiff to the recovery of disbursements when the amount of the judgment is within the jurisdiction of the Provincial Court, which I declined to do in this case. Then, as considered in relation to the second issue, Rule 9-1(5)(a) permits the Court to deprive the plaintiff of any or all of their disbursements after the date of the offer, which I found to be appropriate. Then, taking the matter even further, Rule 9-1(5)(d) permits the Court to consider requiring the plaintiff to pay the defendants’ costs in respect of some or all of the steps taken after the date of the offer to settle.
This progression demonstrates the flexibility within the overall framework of the rules to craft an order for costs that is appropriate to the circumstances of each case.
In the present case, the plaintiff, although the “successful” party at trial, agreed to forego her costs after the date of service of the offer to settle and is, by virtue of my decision on the second issue, without disbursements from the date of service of the offer to settle, which occurred very early in the proceedings. To require her to pay all or some of the defendants’ costs after the date of service of the offer to settle, which at the time was an unreasonably low offer, would be excessive and unjust. It would not be in keeping with the nature of the offer, the relative financial circumstances of the parties, the principle of proportionality, and the need to avoid decisions that inappropriately discourage plaintiffs from pursuing valid claims.
This case is worth reviewing in full for the Court’s length analysis of many authorities to date addressing costs discretion under the new Rules of Court and further addressing important issues such as sufficient reason to sue in Supreme Court, and the relevance of suing an insured defendant.
If you would like further information or require assistance, please get in touch.
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.
This blog is authored by personal injury and ICBC Claims lawyer Erik Magraken. Use of the site and sending or receiving information through it does not establish a solicitor/client relationship. The views expressed and the content provided on this blog is for nonprofit educational purposes. It is not, and is not intended to be, legal advice on any specific set of facts. The use of this website does not create a solicitor-client (attorney-client) relationship. If you require legal advice, you should contact a lawyer directly.