Reasons for judgement were released today demonstrating the Court’s discretion for costs following trial where formal settlement offers were exchanged.
In today’s case (Bains v. Antle) the Plaintiff was injured in a collision and sued for damages. Prior to trial the Defendant presented a formal settlement offer of $185,000. The Court noted that “some of the plaintiff’s initial negotiating positions were clearly inflated” but ultimately it was reasonable for the Plaintiff to refuse the Defendant’s offer and proceed to trial in the face of medical evidence supporting her alleged claim of chronic pain and related disability.
The decision proved costly with a jury awarding the Plaintiff damages of $37,800. The Defendant asked to be awarded post offer costs and to strip the Plaintiff of her post offer costs. The Court refused noting the Plaintiff is of modest means and having her pay Defendant costs would reduce the verdict to a Pyrric victory. In awarding the Plaintiff costs Madam Justice Power provided the following reasons:
 It is my view that all of the financial evidence at trial supports the fact that the plaintiff was a person of modest means. Having already concluded that the settlement offer was not one which ought to have reasonably been accepted, it is evident that an order requiring the plaintiff to either pay the well-funded defendants’ costs, or in the alternative denying the plaintiff her costs, from September 20, 2016 onwards, would result in a pyrrhic victory and could have the effect of discouraging plaintiffs from pursuing valid claims.
 As a result, although not determinative, the relative financial circumstances of the plaintiff and the defendant insurer are a consideration that I have taken into account.
 I am not persuaded that in these circumstances the court should exercise the discretion afforded to it under Rule 9-1(4) and (5). Having considered all of the relevant factors, I find that the plaintiff is entitled to her costs at Scale B and disbursements, including the cost of this application. The defendants’ application is dismissed.
In a demonstration of the judicial flexibility that exists under the BC Supreme Court Rules when assessing costs consequences following trials with formal offers in place, reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, awarding a Plaintiff full costs despite failing to beat a Defense formal settlement offer.
In today’s case (Anderson v. Kozniuk) the Plaintiff was involved in a pedestrian/vehicle collision. Both parties were found partially at fault. The Plaintiff suffered various physical injuries but also advanced a brain injury claim which was not accepted at trial. Prior to trial ICBC issued a formal settlement offer of $125,000. At trial the Plaintiff’s damages were assessed at $78,897 less 30% to reflect the plaintiff’s contributory negligence.
ICBC sought to strip the Plaintiff of post offer costs as a result but the Court exercised its discretion to award the Plaintiff full costs. The Court was influenced by the fact that the costs of the prosecution were significant and an award of costs to ICBC would strip the Plaintiff of the totality of his damages. In reaching this decision Madam Justice Sharma provided the following reasons:
 The plaintiff submitted that the award of costs in this case exceeds the total amount of the judgment. In his written submissions, the plaintiff states that “[i]f the court orders that the Plaintiff is to pay costs to ICBC, it means that Mr. Anderson must pay the entire judgment award to ICBC, instead of spending this money on his health condition and prognosis.” I agree that is a significant factor if the court is to be mindful that costs awards should not punish plaintiffs from taking forward meritorious claims, as discussed above.
 The plaintiff also says that the defendant was defended and funded by the insurer, whereas Mr. Anderson is impecunious having lost the ability to work, and previous cases have held this is a proper consideration: Smith v. Tedford, 2010 BCCA 302; Hunter v. Chandler, 2010 BCSC 1124 at paras. 23-25; Gregory v. Insurance Corporation of British Columbia, 2010 BCSC 1369 at para. 9; andMartin v. Lavigne at para. 23. I agree. Although there was no evidence before me about Mr. Anderson’s impecuniosity, I have no reason to doubt counsel’s word. Certainly at trial the evidence was consistent with counsel’s statement.
 Based on these factors (and all others), the plaintiff submits it would be unfair and unreasonable that the plaintiff be ordered to pay costs to the defendant.
 Finally, the plaintiff points to other factors that he says are relevant to the court’s exercise of discretion. He points out that two expert doctors did conclude that he suffered a brain injury. He also says it was not disputed that after the accident he displayed a number of characteristics consistent with having suffered a brain injury, including the fact that he had a flat affect and his behaviour around his family was different, as well as showing increased irritability, frustration and anger. The plaintiff also points out that the brain scans clearly show that he had brain lesions consistent with a brain injury. The plaintiff had increased difficulties with concentration and learning new tasks. Although I made a finding that both his alcohol consumption and anxiety had significant impacts on his life following the accident, the plaintiff suggests he should not be faulted for failing to guess that those factors would be essentially held against him when making a conclusion about whether he had a brain injury or not.
 The award of costs is an exercise of the court’s discretion, guided by the legal principles identified above. This is not an exercise of counting up which factors favour which party and doing a mathematical calculation. The court must take into account all of the factors weighed against the circumstances of the case. Remembering that ultimately the result must not impose injustice or unfairness on either party, I exercise my discretion and conclude the normal rule of apportionment does not apply and therefore the plaintiff is entitled to 100% of his costs at trial. Because he has been successful on this application, I also award him the costs of this hearing.
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:
 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.
 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.
 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.
 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.
 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”.
 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.
In what I believe is the first case addressing this factor, reasons for judgment were released today by the BC Supreme Court, Kelowna Registry, looking to the timeliness of a costs application as a factor in deciding costs consequences following a trial with a formal settlement offer in place.
In this week’s case (Bay v. Pasieka) the Plaintiff was involved in a collision and sued the Defendant for damages. The case had “frailties” and prior to trial the Defendant made a nominal formal settlement offer of $1. The Plaintiff rejected this offer and proceeded to trial. A jury dismissed the claim. The Defendant sought double costs and Mr. Justice Butler would have awarded these but did not due to excessive delay in bringing the Defendant’s application. In reaching this conclusion the Court provided the following reasons:
 On January 27, 2010, following a two-day trial, the action of the plaintiff, Laurie-Ann Bay, against the defendant, Todd Pasieka, was dismissed. I ordered that the issue of costs be adjourned with liberty to the parties to apply to the court if an agreement could not be reached. Three-and-a-half years after the trial, the defendant now applies for costs. The defendant seeks costs at Scale B and double costs from November 14, 2006, the date an offer to settle was made, to the present. The plaintiff says that each party should bear their own costs…
 While some delay is understandable, the delay in this case far exceeded a reasonable limit. Excessive delay is, of course, contrary to the object of the Rules as set out in Rule 1-3(1): to secure “the just, speedy, and inexpensive determination of every proceeding on its merits.” By waiting so long to deal with the issue of costs, the defendant undoubtedly increased the cost of dealing with the issue for both parties and delayed the final resolution by years. It would be wrong to accept the delay without imposing any consequence on the defendant. It is in the interests of the court and of the parties to resolve disputes as soon as they arise to promote efficient use of court time. The inordinate delay in bringing this application is not acceptable.
 In Xerox, Finch J. found that a party alleging prejudice has the evidentiary burden of showing that prejudice. While the evidence presented does not establish significant prejudice, the plaintiff has established that the defendant’s delay in pursuing a costs award caused her and her counsel difficulty in responding to the application in as fulsome a manner as she would have been able to had the defendant sought costs soon after trial. Similarly, it is much more difficult for the court to consider the costs claim so long after the trial has concluded.
 I find that the defendant has not provided a suitable reason for the inordinate delay in bringing this application. The plaintiff has been prejudiced as a result of this delay and the court has been inconvenienced.
 Without the delay in the application, I would have found that the defendant was entitled to double costs from the date of Mr. Pasieka’s examination for discovery. The plaintiff should have known from that time forward her claim was weak and should have accepted the offer. However, given the inordinate delay, I decline to make that order. Instead, I order that the defendant is entitled to costs at Scale B throughout.
As previously discussed, when a formal settlement offer dealing with costs consequences is accepted the BC Supreme Court had no discretion to make a different order with respect to costs. Reasons for judgement were released this week confirming this principle.
In this week’s case (Tomas v. Mackie) the Defendant made a formal settlement offer $77,400. The offer included the usual term that, if accepted, the Plaintiff would be entitled to reasonable costs and disbursements up to the date of the offer and the Defendant would be entitled to their costs and disbursements from that time onward.
The Plaintiff accepted the offer 13 days after it was derived. During this period further costs were incurred. The Plaintiff argued that the Defendant should be responsible for these as the Plaintiff should have the benefit of a reasonable period of time to consider the offer. District Registrar Cameron was sympathetic to this argument but ultimately disagreed noting there is no judicial discretion to deviate from the terms of the accepted formal offer. In reaching this conclusion the Court provided the following reasons:
 Mr. Loewen submitted that the acceptance of the settlement offer constituted a binding agreement and as a result the court has no discretion to vary the terms of that agreement under Rule 9-1 or 14-1 of theSupreme Court Civil Rules.
 Mr. Loewen referred to a number of authorities in support of his argument that clearly were not before Registrar Sainty…
 Applying these authorities, it is clear that I do not have the discretion to vary the terms of the settlement agreement made by the parties and they should obtain a date from the Registry for the assessment of both the Plaintiff’s and the Defendants’ costs pursuant to Rule 14-1 of the Supreme Court Civil Rules.
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.
Further to my previous posts detailing the potential costs consequences following trials with formal settlement offers in place, reasons for judgement were released last week addressing this topic finding that costs consequences should be applied in an “even-handed” way and further should not unduly deter Plaintiff’s from bringing meritorious, but uncertain claims “because of the fear of a punishing costs order“.
In last week’s case (Currie v. McKinnon) the Plaintiff sustained soft tissue injuries in a collision which substantially recovered within one year. Prior to trial ICBC made a formal settlement offer of $40,000. The Plaintiff rejected this offer and proceeded to trial where he was awarded $22,000 in damages.
ICBC applied for double costs from the time of the offer onward. Madam Justice Adair found that such a result was unwarranted and instead stripped the Plaintiff of post offer costs and disbursements. In doing so the Court provided the following sensible comments:
 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.
 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.
 That is not the case here. In my view, Mr. McKechnie, despite his able arguments, simply did not identify for me how the circumstances here were so exceptional as to justify an award of double costs against Mr. Currie. While the purpose of the Rule is to encourage reasonable settlements, parties should not be unduly deterred from bringing meritorious, but uncertain, claims because of the fear of a punishing costs order…
 Having considered all of the factors in this case, I am not satisfied that it would be appropriate to award the defendants double costs as sought by Mr. McKechnie. I have discussed earlier in these reasons my concerns about how that can have the effect of skewing the procedure in favour of defendants and unfairly pressurize and penalize plaintiffs, and I think that would be the result in this case. Liability was admitted by the defendants. Mr. Currie’s case was not dismissed. Rather, he recovered judgment for non-pecuniary damages in an amount that was greater than what the defendants argued at trial he should recover.
 However, in my view, the defendants’ offer to settle cannot be ignored. That would undermine the purpose behind the rule…
 In my view, therefore, the double costs sought by the defendants are neither a fair nor just result. However, in my view, it is not a fair or just result for Mr. Currie to recover costs after he had had a reasonable opportunity with his counsel to review and consider the defendants’ offer to settle. I would say that by November 30, 2011, Mr. Currie and his counsel had had a reasonable opportunity to review and consider the defendants’ offer and ask any questions they deemed necessary if they thought clarification was necessary.
 In my view, the defendants should not have to pay Mr. Currie’s costs after November 30, 2011. However, I do not think it a fair result that Mr. Currie should have to pay the defendants’ costs after November 30, 20011, given his success ultimately at trial.
 My order then, with respect to costs, is that Mr. Currie will recover his costs and disbursements up to and including November 30, 2011, and that each side bear their own costs thereafter.
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.
In a good demonstration of the Court’s discretion following a trial where a Plaintiff does not beat a pre-trial defence formal settlement offer, reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, taking a Plaintiff’s post offer costs and disbursements away but not requiring the Plaintiff to pay the Defendant’s costs and disbursements.
In this week’s case (Tompkins v. Bruce) the Plaintiff turned down a pre-trial formal settlement offer of $950,000. Following trial the Plaintiff was awarded net damages of $851,437. ICBC applied for post offer costs. Mr. Justice Curtis found such a result would not be appropriate and instead took away the Plaintiff’s post offer costs and disbursements. In doing so the Court provided the following reasons:
 When the offer in this case was received on October 6, 2011, the plaintiff and his counsel were in possession of the information necessary to make a realistic assessment of the potential recovery. Naturally, there is no mathematical certainty in those matters and differing courts may give differing amounts. The plaintiff and his counsel would clearly have contemplated a range of possible recoveryies. The plaintiff, of course, hopes for the high end of the range and the paying party the low ? settlements are often made somewhere in between.
 The offer in this case was reasonable on the facts of the case as they were known to the parties. It could reasonably have been accepted as being within the range of possible recovery, although likely it would not have been thought by either party at the high end of the range. The amount of the Offer was reasonable as was its timing: the information necessary to assess the claim was in the possession of the parties, yet there was plenty of time to give careful consideration to the matter before the November trial date. On the other hand, Mr. Tompkins was seriously injured. He and his counsel’s view of the matter was that it was worthwhile going to court in the hope of getting a significantly higher award. It cannot be said that such a decision was unreasonable at the time.
 The purpose of cost consequences of reasonable offers is to encourage settlement. On the other hand, onerous cost penalties should not discourage the seriously injured from a proper hearing and a chance to obtain a higher award, nor should they seriously subtract from what the court has found is appropriate compensation for the injury.
 Considering the factors set out in the Rules, it is my opinion that the interests of justice are best served in this case by awarding Mr. Tompkins his costs and disbursements up to and including October 31, 2011, but disallowing them after that date, with the Third Party to bear its own costs. There is then a consequence for not accepting a reasonable Offer, but the consequence is not unduly punitive in the circumstances.
Today’s case is also worth reviewing for the Court’s discussion of various Part 7 Deductions following a tort action.