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Tag: Rule 9-1(5)

ICBC "Nuisance Offer" Fails to Trigger Double Costs

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9, Uncategorized.


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.

Rule 9-1 Does Not Allow the Court to Award Double Disbursements

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9. 52 Comments on Rule 9-1 Does Not Allow the Court to Award Double Disbursements


(Update – April 19, 2013 – The below decision should be cross-referenced with reasons for judgement released today (Gonzales v. Voskakis) where Madam Justice Fitzpatrick came to a different conclusion)
Reasons for judgement were released this week by the BC Supreme Court, Victoria Registry, confirming that the Court cannot award double disbursements following a trial where a formal settlement offer was bested.
In this week’s case (Moore v. Kyba) the Plaintiff was awarded substantial damages in a jury trial following a motor vehicle collision.  The damages awarded exceeded both the Plaintiff’s and Defendant’s pre-trial formal settlement offers.  The Plaintiff brought an application seeking double costs and double disbursements.  Mr. Justice Brown held that while it was appropriate to award double costs, Rule 9-1 does not go so far as to give the Court authority to award double disbursements.  Mr. Justice Brown provided the following reasons:
[8]I am not convinced by the applicant’s argument.  The repeal of the definition relied on in Browne v. Lowe is not determinative and does not require its reversal.  In any event, I conclude that the proper interpretation of Rule 9-1(5) does not permit the Court to award double disbursements.  In Rule 9-1(5)(a), the rule specifically provides for disbursements, while Rule 9-1(5)(b) does not.  Therefore, properly interpreted, Rule 9-1(5)(b) does not permit the Court to award double disbursements after the delivery or service of the offer to settle.

More on the Reality of Insurance and Costs Consequences Following Trial

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9, Uncategorized.


Update March 21, 2014 – the Trial Judgement with respect to the relevance of insurance and costs was upheld today by the BC Court of Appeal
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In 2010 the BC Court of Appeal confirmed that Judges can look at insurance when considering the “financial circumstances” of litigants when addressing costs consequences following trials where a formal settlement offer was made.  Further reasons were released last week by the BC Supreme Court, Victoria Registry, confirming that costs consequences should not be applied with the ‘fiction‘ of ignoring insurance.
In last week’s case (Meghji v. Lee) the Plaintiff suffered brain trauma after being struck by a motorist while walking in a marked cross-walk in 2003. At trial the motorist was found 90% at fault for the crash with the Ministry of Transportation shouldering the remaining 10% for designing the intersection with inadequate lighting.
Prior to trial the Plaintiff offered to settle for $750,000.  Neither Defendant accepted.  Damages at trial were assessed at just over $1.1 Million with the Defendants being jointly and severally liable.  The Plaintiff sought and was awarded double costs from the time of her offer onward.  In doing so Mr. Justice Johnston provided the following useful reasons addressing the reality of insurance and the risks of joint and several liability:

[33]Also relevant to consider is the fact that a well-funded party, such as MoTH,  faces higher risk with joint liability when other potentially liable parties have less means or no means with which to satisfy a possible judgment. In such circumstances, the well-heeled party may end up paying more than its proportionate share to the plaintiff if or when the impecunious party exhausts its ability to pay.

[34]This risk is balanced by the potential that the plaintiff might be held partly to blame for her losses, which would confine the well-funded party’s liability to its proportionate share of the loss through several liability: Leischner (Next friend of) v. West Kootenay Power, [1982] B.C.J. No. 1641…

[40]Quite apart from the fact that I am bound by the decision in Smith v. Tedford, its reasoning eliminates one fiction that ought not to complicate proceedings before a judge alone. That fiction is that there is no plan of universal compulsory automobile insurance in effect in British Columbia, mandated by statute, where the details of the coverage available are found in statute and regulation. If judges and others are presumed to know the law, there is little sense in requiring that judges ignore what the law provides when dealing with costs.

Formal Settlement Offers and Costs Consequences: A "Broad Discretion"

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9, Uncategorized.


Reasons for judgement were released last month by the BC Supreme Court, Vancouver Registry, discussing the broad discretion that Judges have respecting costs consequences following trial where formal settlement offers have been made.
In last month’s case (Ward v. Klaus) the Plaintiff was involved in a motor vehicle collision.  Prior to trial ICBC tabled a $493,000 settlement offer.  As trial neared the offer was increased to $595,000.  The Plaintiff rejected these offers and went to trial.  At trial the presiding judge awarded just over $434,000.
ICBC brought an application to be awarded post offer costs.  This would have created a ‘costs swing‘ of $149,000.  Mr. Justice Goepel ultimately stripped the Plaintiff of her post offer costs but did not make her pay the Defendants costs reducing the sting of her failure to best the formal settlement offer.  In demonstrating the ‘broad discretion‘ of Rule 9-1 Mr. Justice Goepel provided the following reasons:

[32] Since its inception in 2008, much ink has been spilled explaining the Rule. LexisNexis Quicklaw presently references some 231 decisions in which the Rule has been discussed. From the decisions, some broad principles of general application have emerged concerning how the Rule should be applied.

[33] It is now generally recognized that the Rule provides for the exercise of a broad discretion by trial judges and provides principles to guide in the exercise of that discretion: Roach v. Dutra, 2010 BCCA 264, 5 B.C.L.R. (5th) 95…

[53] For the reasons I have stated, it cannot be said that the plaintiff should have accepted either offer. That is, however, the beginning, not the end of the analysis. Unlike Rule 37 which mandated the outcome regardless of the circumstances, Rule 9-1 gives the court a broad discretion to determine the consequence of a successful offer to settle. While the Rule is intended to reward the party who makes a reasonable settlement offer and penalizing the party who fails to accept it, the several options set out in Rule 9-1(5) allows the court to determine with greater precision the penalty or reward appropriate in the circumstances.

[54] In this case, regardless of the merits of the plaintiff’s case, the defendant’s offers to settle cannot be ignored. To do so would undermine the purpose of the Rule. Having decided to proceed in the face of two not insignificant and ultimately successful offers to settle, the plaintiff cannot avoid some consequences. That said, in the circumstances of this case, to deprive the plaintiff of her costs and have her in addition pay the costs of the defendant would be too great a penalty. It would not be fair or just to require the plaintiff to pay the defendant’s costs after the date of the First Offer. Similarly, however, I find that the defendant should not pay the costs of the plaintiff after the delivery of the First Offer, which costs were only incurred because the plaintiff decided to proceed.

[55] Accordingly, I find that the plaintiff is entitled to her costs up to May 3, 2010. The parties will bear their own costs thereafter.

Insurance Policy Limits Relevant to Formal Settlement Offer Costs Analysis

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 7, BCSC Civil Rule 9.


In 2010 the BC Court of Appeal found that Judges could consider the existence of insurance when exercising costs discretion following a trial in which a formal settlement offer was made.  Last week reasons for judgement were released by the BC Supreme Court, Victoria Registry, expanding on this principle finding that the limits of insurance coverage were equally applicable.
In last week’s case (Meghji v. Lee) the Plaintiff suffered brain trauma after being struck by a motorist while walking in a marked cross-walk in 2003.  At trial the motorist was found 90% at fault for the crash with the Ministry of Transportation shouldering the remaining 10% for designing the intersection with inadequate lighting.
Following trial the Plaintiff applied for double costs as the trial result exceeded a pre-trial formal settlement offer she made.   The Defendant wished to place information relating to his insurance policy limits before the Court before a costs decision was made.  In finding this was appropriate Mr. Justice Johnston provided the following reasons:

[6] Rule 7-1(4) reads:

(4)        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.

[7] Subrule (3) requires a party to list in his or her list of documents insurance policies that, generally speaking, might be available to satisfy a judgment in whole or in part should the judgment be entered.

[8] Mr. Lee has responded by arguing that the trial is over (subject, of course, to an application to re-open prior to entry of judgment), and even if the trial is not at an end, his policy limits are now relevant to an issue in the action, being costs. That relevance can fall under one or more of the considerations set out in Rule 9?1(6).

[9] Counsel for the Ministry of Transportation and Highways (MoTH) disagrees as to the relevance of Mr. Lee’s insurance limits.

[10] I have concluded that the amount of Mr. Lee’s automobile liability insurance limits is relevant to the considerations set out in Rule 9-1(6). The amount of available insurance could affect the question whether the offer was one that ought reasonably to have been accepted, and it could also affect the weighing of the relative financial circumstances of the parties.

[11] Counsel for Mr. Lee is authorized and directed to disclose the amount of Mr. Lee’s liability insurance limits operative at the time of the accident.

Formal Settlement Offers and Costs: A Matter of Discretion

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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.

"Nominal" ICBC Offer Fails To Trigger Double Costs Award

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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.

More on Costs and the Flexibility of the New Rules of Court

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(Update June 5, 2013- the underlying trial verdict was upheld in reasons for judgement released today by the BC Court of Appeal)
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As previously discussed, one of the best changes in the New Rules of Court is the ability for trial judges to have discretion in assessing costs consequences where one party bests their formal settlement offer at trial.
Generally where a Plaintiff fails to beat a Defence formal settlement offer they can be punished with a significant costs award.  Fortunately Rule 9-1 does not force a Court to this result and instead leaves some discretion in the process.   This discretion was demonstrated in reasons for judgement released last week by the BC Supreme Court, New Westminster Registry.
In last week’s case (Gatzke v, Sidhu) ICBC, on the Defendant’s behalf, made a formal settlement offer of $50,000.  The Plaintiff proceeded to trial and after a split finding of liability was assessed damages at “an amount to someting less than $10,000“.
ICBC brought a motion to be awarded post offer costs.  Mr. Justice Saunders refused to make this order instead simply ordering that the Plaintiff be deprived of her post offer costs and that the Plaintiff pay the disbursements associated with bringing the Defendant’s IME doctor to trial.  In reaching this result the Court provided the following reasons:

[14] …. Ordinarily, where a plaintiff obtains judgment for less than the amount offered in settlement, the legislative purpose of the Rule would be fulfilled by awarding the defendant its costs from the date the offer was made.  However, where there is a very significant gap between the judgment amount and the offer, it may be the case that a defendant is in a better position for having gone to trial, even taking its counsel’s fees into account.  This appears to have quite possibly been the case in the present circumstances.  The damages assessed, net of the plaintiff’s contributory negligence, are a small fraction of the offer.

[15]Defendants should not be discouraged from making generous settlement offers.  But where the end result is dramatically different than the offer resulting in a net savings to the defendant, a defendant found to be partially at fault can reasonably expect to bear some of the cost of obtaining that result.

[16]The plaintiff apparently has very limited financial means.  This factor, however, will be given the most weight where it is the subject accident, or other issue between the parties, which is responsible for the plaintiff’s circumstances.  That is not the case here.

[17]The defendants, on the other hand, were presumably being defended by the Insurance Corporation of British Columbia.  An insured defendant’s greater financial ability to defend is a factor which was described by the B.C. Court of Appeal in Smith v. Tedford, 2010 BCCA 302, as being a matter “of no small importance to considering whether and to what extend the financial circumstances of the parties, relative to each other, bear on an award of costs”.

[18]This appears to have been a case where both parties undertook a course of action based on an overestimation of the risk to the defendants.  There is no compelling case, in the circumstances, for awarding the defendants the entirety of their post-offer costs.  Given the plaintiff’s financial circumstances and the very modest damages, the purpose of the Rule will be met by awarding the plaintiff 30% of her costs to the date of the offer, and awarding the defendants only the disbursements incurred in association with the attendance at trial of their expert witness, Dr. Sovio.  Dr. Sovio’s attendance at trial was only required for cross-examination at the plaintiff’s request, and it is appropriate that this cost be borne by the plaintiff.  That amount is to be set off against the plaintiff’s award of damages.

"Special Costs" Clause Takes the Teeth Out of ICBC's Formal Settlement Offer

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14, BCSC Civil Rule 9, Uncategorized.


I’ve written many times about the risks and consequences formal settlement offers can create in the course of a personal injury lawsuit.  Interesting reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, refusing to give ICBC double costs after the dismissal of a lawsuit because of a ‘special costs‘ clause in their formal offer.
In this week’s case (Wong v. Lee) the Plaintiff was injured in a 2003 motor vehicle collision.  She sued her driver but the lawsuit was dismissed with a Jury finding the driver was not negligent.  Typically such a result obligates the Plaintiff to pay the Defendant’s costs due to the BC Supreme Court’s Loser Pays system.
Prior to trial ICBC made a formal settlement offer of $60,000.  In these circumstances the Court has the discretion to award ‘Double Costs‘.  ICBC, on the Defendant’s behalf, asked for the Court to make such an order.  Madam Justice Dardi refused, however, finding that the ‘special costs’ clause which is contained in many of ICBC’s formal settlement offers operates to create uncertainty in the settlement process.  The Court provided the following useful reasons:








[27] The plaintiff’s overarching submission is that the inclusion of para. 6 in Appendix A of the Offer to Settle is fatal to the defendants’ application for double costs. The Offer to Settle was subject to the conditions in Appendix A which provides in para. 6 as follows:

Nothing in this offer detracts from the Defendants’ right to seek special costs against the Plaintiff or his counsel above and beyond the Defendants’ entitlement to costs under this offer. Neither the making nor the acceptance of this offer shall be deemed a waiver or estoppel by the Defendants in respect to any reprehensible or improper conduct on the part of the Plaintiff and / or his counsel in respect of this proceeding. [Emphasis added.]

[28] Based upon these terms, even if the plaintiff had accepted the Offer to Settle, the defendants nonetheless would have been at liberty to pursue the plaintiff for special costs. Thus, there was a potential risk that the acceptance of the offer may not have ended all of the outstanding disputes between the parties.

[29] The Court of Appeal, in discussing Rule 9-1(5) in Evans v. Jensen, 2011 BCCA 279, articulated at para. 35 that “the most obvious and accepted intent of this Rule, namely to promote settlement by providing certainty to the parties as to what to expect if they make, or refuse to accept, an offer to settle”. The Court reasoned as follows:

[41]      This conclusion is consistent with the importance the Legislature has placed on the role of settlement offers in encouraging the determination of disputes in a cost-efficient and expeditious manner. It has placed a premium on certainty of result as a key factor which parties consider in determining whether to make or accept an offer to settle. If the parties know in advance the consequences of their decision to make or accept an offer, whether by way of reward or punishment, they are in a better position to make a reasoned decision. If they think they may be excused from the otherwise punitive effect of a costs rule in relation to an offer to settle, they will be more inclined to take their chances in refusing to accept an offer. If they know they will have to live with the consequences set forth in the Rule, they are more likely to avoid the risk.

[42]      This certainty in terms of the result of either making, accepting or refusing to accept an offer is also more conducive to the overall object of the Rules, which is “to secure the just, speedy and inexpensive determination of every proceeding on its merits”.

[30] It clearly emerges from the authorities that an important objective of offers to settle under the Rules is to bring certainty and finality to litigation. The reservation of the defendants’ right to seek special costs from the plaintiff after the acceptance of the offer is antithetical to this objective. It cannot be said that the Offer to Settle provided a genuine incentive to settle. As was stated inGiles v. Westminster Savings and Credit Union, 2010 BCCA 282 at para. 88, “plaintiffs should not be penalized for declining an offer that did not provide a genuine incentive to settle in the circumstances”.

[31] In short, para. 6 in Appendix A of the Offer to Settle militates against an award of double costs…





[34] In weighing all of the factors, the most significant being the inclusion of para. 6 in Appendix A of the Offer to Settle, I conclude that the plaintiff should not be required to pay double costs.



The High Risk of Personal Injury Trials: The Costs and Disbursements Swing

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14, BCSC Civil Rule 9, Uncategorized. 44 Comments on The High Risk of Personal Injury Trials: The Costs and Disbursements Swing


As previously discussed, personal injury trials can be risky and expensive.  The British Columbia Supreme Court has a so-called ‘loser pays’ system which generally makes the losing side pay the winning side’s costs and disbursements (the hard expenses associated with running a trial such as court filing and expert witness fees).  Last month the BC Supreme Court, Victoria Registry, released reasons for judgement demonstrating this reality.
In this recent case (Sartori v. Gates) the Plaintiff was injured in 2005 when a truck owned by his friend accidentally struck him.  The Plaintiff sued for damages.  As the lawsuit progressed ICBC made a formal settlement offer of $230,000 plus costs and disbursements.
The Plaintiff presented his own formal offer of $600,000 plus costs and disbursements.   These offers were rejected and the claim proceeded to trial.  Ultimately a jury found the Plaintiff 33.3% at fault for the collision but accepted that he was injured and awarded damages.
When all the dust settled, the Plaintiff was awarded $234,000.  ICBC argued that since the final result was “within a knife’s edge” of their offer that the Plaintiff should be stripped of his post offer costs and disbursements.  This was a significant development because the Plaintiff spent over $120,000 in disbursements while advancing his claim.
Ultimately Mr. Justice Wilson found that this result would not be fair.  However, the Court disallowed disbursements associated with one of the Plaintiff’s expert witnesses and further reduced the disbursements the Plaintiff was entitled to by 1/3 to take into account the jury’s finding of fault and section 3 of the Negligence Act.  Some quick math reveals this results in about $40,000 of the real costs of advancing the claim not being recovered by the Plaintiff.  This large swing highlights the need to consider potential costs consequences when deciding whether to settle an ICBC claim or to proceed to trial.
This recent case is also noteworthy for a few other reasons.  ICBC argued that the usual rule of a winner receiving costs should not be followed given how close the settlement offer was to the jury verdict.   Mr. Justice Wilson rejected this argument providing the following useful reasons:

[42] The governing principle on the first issue, is R. 14-1(9).  The material words of that subrule, on this application, are:

… costs of a proceeding must be awarded to the successful party unless the court otherwise orders.

[43] The onus is on the defendant to persuade me why I should otherwise order….

[55] The plaintiff reminds me that the discretion conferred by the cost rules must be exercised judicially.  The parameters of that judicial duty were referred to in Stiles v. B.C. (Workers’ Compensation Board), and iterated consistently thereafter.  The court said:

… The discretion must be exercised judicially, i.e. not arbitrarily or capriciously.  And, as I have said, it must be exercised consistently with the Rules of Court.  But it would be a sorry result if like cases were not decided in like ways with respect to costs.  So, by judicial comity, principles have developed which guide the exercise of the discretion of a judge with respect to costs.  Those principles should be consistently applied; if a judge declines to apply them, without a reason for doing so, he may be considered to have acted arbitrarily or capriciously and not judicially.

[56] The Rules of Court mentioned in that extract are those cited above.  The “principles … developed …” or “purposes”, were referred to in Giles v. Westminster Savings and Credit Union:

The purposes for which costs rules exist must be kept in mind in determining whether appellate intervention is warranted.  In addition to indemnifying a successful litigant, those purposes have been described as follows by this Court:

•     “[D]eterring frivolous actions or defences”:  Houweling Nurseries Ltd. v. Fisons Western Corp. (1988), 37 B.C.L.R. (2d) 2 at 25 (C.A.), leave ref’d, [1988] S.C.C.A. No. 200, [1988] 1 S.C.R. ix;

•     “[T]o encourage conduct that reduces the duration and expense of litigation and to discourage conduct that has the opposite effect”:  Skidmore v. Blackmore (1995), 2 B.C.L.R. (3d) 201 at para. 28 (C.A.);

•     “[E]ncouraging litigants to settle whenever possible, thus freeing up judicial resources for other cases”:  Bedwell v. McGill, 2008 BCCA 526, 86 B.C.L.R. (4th) 343 at para. 33;

•     “[T]o have a winnowing function in the litigation process” by “requir[ing] litigants to make a careful assessment of the strength or lack thereof of their cases at the commencement and throughout the course of the litigation”, and by “discourag[ing] the continuance of doubtful cases or defences”:  Catalyst Paper Corporation v. Companhia de Navegaçao Norsul, 2009 BCCA 16, 88 B.C.L.R. (4th) 17 at para. 16.

[57] Giles is also authority for the proposition that the “usual rule” is that costs follow the event…

Here, this plaintiff did succeed.  The defendant’s argument is that he did not succeed to the extent of his aspirations.  Therefore, goes the argument, the defendant should have the costs of establishing that failure.

[81] In my opinion, that proposition is not a phenomenon contemplated by R. 14?1(14) or Forrest v. Gaidner.

[82] My conclusion on the first issue is that the defendant has not persuaded me that this is a case on which I should otherwise order.  The plaintiff is entitled to his costs, subject to the disallowance of one day of trial and disbursements associated with Dr. Hunt’s involvement.