Tag: Rule 9

More on Rule 37B – The Conduct of the Parties as a Factor

Further to my numerous posts revieiwng BC Supreme Court cases interpreting and applying Rule 37B following an injury claims trial, reasons for judgement were released today dealing with a unique issue; in exercising discretion under the Rule can the Court consider the conduct of the successful litigant?
In today’s case (Lakhani v. Elliott) the Plaintiff was injured in a 2005 car crash.  Before trial the Plaintiff made a formal offer to settle her case under Rule 37B for $95,000 plus costs and disbursements.
While the Plaintiff did not obtain all the compensation she sought at trial she fared well enough to beat her formal offer.  Specifically, after an 11 day trial Mr. Justice Voith awarded the Plaintiff just over $105,000 in total damages (You can click here to read my post summarizing the trial findings).
Despite the Plaintiff’s relative success at trial all did not go smoothly.  Mr. Justice Voith made some damaging findings with respect to her credibility.  Some of the highlights of these findings were as follows:

[33]      The defendants asserted that Mrs. Lakhani’s credibility was suspect. I agree in significant measure. I believe there are a number of distinct factors that have caused me to question, in some cases reject, and in other cases to significantly discount her evidence. In the main, I find that Mrs. Lakhani has overstated her symptoms resulting from the Accident; downplayed the significance of her 2001 workplace injury; and has been untruthful regarding the Accident’s effect on her graduation from nursing school. I will discuss these concerns in turn…

[40]      I believe that Mrs. Lakhani has tended to considerably overstate the severity of the symptoms that she suffers from as a result of the Accident….

[46]      For the plaintiff to assert that she has routinely and consistently suffered from pain, from the date of the Accident to the trial, which approaches the worst pain possible is not tenable. For her to describe her pain in terms which would be comparable to that of patients who are heavily medicated to assist with their pain management or who are inextremis goes beyond mere subjectivity or imprecision. It is instead either so inaccurate a description as to be of no value or it is a description intended to overstate. In either case it is not a description that can be relied upon….

[51]      The second significant concern with the plaintiff’s evidence was a tendency to downplay the significance of her 2001 workplace injury or to suggest some improvement in her symptoms in relation to that injury prior to the Accident…

[54]      Indeed Mrs. Lakhani sought broadly to suggest that in late 2004 she reclaimed or reassumed control of her life. She said this was so with respect to spending time with her sister, with respect to gardening and even with respect to her household activities. This too is all inconsistent with the objective record of what she told others she could do, with the medical assessment that her condition had plateaued or with her admission that things had become “as good as they were going to get”…

[59]      Quite simply the overall picture which the plaintiff sought to paint with her evidence was one where the very significant “life altering changes” brought on by her low back injury occupied little or no space. This absence of balance in her evidence had the affect of considerably detracting from its weight.

[60]      A third concern with Mrs. Lakhani’s evidence arises from having testified that the Accident caused her to graduate two terms later than she otherwise would have. Specifically, Mrs. Lakhani said that the pain and difficulty associated with the Accident caused her to skip the May to August 2005, as well as the January to April 2007 academic terms. This is not credible on an objective basis…

[66]      Plaintiff’s counsel sought to persuade me that an eight month delay in Mrs. Lakhani’s graduation was a very modest component of the plaintiff’s claim and not one that would cause the plaintiff to be less than forthright. In my view, however, the focus of the plaintiff’s evidence was not designed to obtain the modest financial benefit that receiving her degree earlier would have generated, but rather to impress upon the court the ongoing severity of her injuries. Quite apart from her motivation, the documents I’ve referred to as well as the admissions she made in cross examination, simply do not accord with the evidence she first gave.

With this background at hand the Plaintiff brought an application for double costs under Rule 37B.  The Defendants opposed and argued that given the Plaintiff’s “failure to be forthright at trial” the Court should not exercise its discretion to award the Plaintiff double costs.  Mr. Justice Voith agreed and provided the following analysis:

0] While the dominant objective of Rule 37B, found under the heading “Offers of Settlement”, is likely to promote early or reasonable settlement, additional factors, and in particular the conduct or honesty of one of the parties, can be relevant in considering whether to make an order of double costs under 37B(5)(b). This is apparent from numerous sources…
[13] Second, both the permissive nature of Rule 37B(5), which establishes that the new rule does not purport to create any automatic double cost consequences, and the non-exhaustive list of factors in Rule 37B(6) acknowledge the flexibility inherent in Rule 37B and the prospect that the Rule is amenable to furthering legitimate policy objectives apart from settlement…

[15] It is important to emphasize that in this case there is no issue of depriving the plaintiff of the ordinary costs to which she is entitled or of any award of special costs being made against her. Instead, the only issue is whether she should be entitled to double costs in light of various findings that I made in my Reasons for Judgment.

[16] Having regard to the foregoing authorities, and the underlying rationale that drives them, I can see no principled reason why a lack of candour or probity on the part of a party who gives evidence at trial should not constitute an “other factor the court considers appropriate” under Rule 37B(6)(d) in any potential award of double costs. An award of double costs, or a refusal to award such costs, is one of the means available to a court of signalling to litigants the types of conduct or behaviour it considers as either worthy of promotion or, conversely, as worthy of rebuke…

[20]        The same considerations apply to a party whose evidence is found by a court to be dishonest or designed to exaggerate or inflate a claim. Such a party should understand the seriousness with which that conduct will be regarded. It should similarly understand the potential consequences of that conduct, including its relevance to an award of double costs that the party might otherwise be entitled to.

[21]        In making these comments I am mindful that there are a great many cases where a party’s evidence is not accepted by the court for a variety of reasons. In many cases a party’s best recollection may simply not accord with other objective evidence. A party’s candid evidence may not, in light of the expert evidence, be accepted. Indeed it is not remarkable or unusual for a party to place a somewhat positive slant on given events. The mere fact that a party’s evidence is not accepted by the court, without more, does not engage the considerations I have identified. There is nothing in the conduct of such a party that warrants any reproach or criticism. It is, instead, the natural result of all cases where competing memories or competing versions of given events require resolution…

[24] In this case, the specific findings I referred to go beyond the “normal trial process” and do extend to a finding that the plaintiff sought to mislead the court and to significantly exaggerate the claim being advanced. Such conduct is worthy of censure and, in the circumstances of this case, disentitles the plaintiff to the award of double costs that she seeks.

This case serves as an important reminder of the crucial role that Plaintiff credibility plays in injury litigation.
In my continued efforts to get us all prepared for the New BC Supreme Court Civil Rules I will again point out that Rule 37B will be replaced with Rule 9 under the New Rules. The new rule uses language that is almost identical to Rule 37B which should help cases such as this one retain their value as precedents.

I'd Buy That For a Dollar – Rule 37B and Nuisance Settlement Offers


As readers of the blog know Rule 37B of the BC Supreme Court Rules has given the Court considerable discretion with respect to awarding parties costs when formal offers of settlement are beat at trial.  One pattern that is becoming clear under the new Rule is that token offers of settlement are not particularly effective in triggering meaningful costs consequences.  Reasons for judgement were released today demonstrating this.
In today’s case (Skinner v. Fu) the Plaintiff was involved in a BC Car Crash and sued the other motorist.  The issue of fault was hotly contested by ICBC who argued that the Plaintiff was fully at fault for the accident and his injuries.  Mr. Justice Harvey of the BC Supreme Court agreed and dismissed the Plaintiff’s claim after a summary trial.
Having successfully defended the lawsuit ICBC (through the Defendant) applied for costs from the Plaintiff.  Prior to trial the Defendant made a formal offer to settle the claim for $1.  ICBC asked the Court to award them double costs.
Mr. Justice Harvey dismissed the motion for double costs.  In doing so he commented that a $1 offer in an ICBC Claim with contested liability is not a ‘reasonable offer’ which ought to trigger increased costs consequences for the losing party.  Specifically the Court held as follows:

[15] Liability was the central issue between the parties. The defendants, from the time the matter was first reported to the Insurance Corporation of British Columbia, took the position that no liability rested with the defendant driver despite his apparent breach of s. 187 of the Motor Vehicle Act, R.S.B.C. 1996, c. 318.

[16] Immediately after the writ of summons was issued, the offer to settle the matter for $1 was forwarded to the plaintiff.

[17] Where, as in the case at bar, the central issue is liability, I do not consider an offer of $1 plus costs of filing the writ of summons an offer which ought reasonably be accepted, either on the date that the offer to settle was delivered or on any later date. Were it so, all defendants in similar positions would follow suit and, as a result, enhance their entitlement to costs without promoting the underlying objective of Rule 37B, which is to encourage reasonable settlement.  As a result, this offer to settle will have no effect on the order of costs in this case.

This is not the first case interpreting Rule 37B in this way (click here to read my previous posts discussing the Court’s application of Rule 37B in BC Injury Claims) and the pattern seems well established that nominal offers will rarely be effective for triggering meaningful costs consequences.

In my continued efforts to get prepared for the New BC Supreme Court Civil Rules I am cross referencing Civil Procedure cases that I discuss on this blog with the New Rules.  I will again point out that Rule 37B will be replaced with Rule 9 under the New Rules. The new rule uses language that is almost identical to Rule 37B which should help cases such as this one retain their value as precedents.

More on Rule 37B and the Timing of Formal Settlement Offers, "All Inclusive" Offers Discussed


One pattern that is becoming well developed under Rule 37B (the Rule dealing with Formal Settlement Offers in BC Supreme Court Lawsuits) is that of timing.  Caselaw seems to require that formal offers need to be available for acceptance for a reasonable period of time before triggering cost consequences under Rule 37B.  Reasons for judgement were released this week demonstrating this.
In this week’s case (Dodge v. Shaw Cablesystems [SBC) Ltd.) the Plaintiff sued for damages as a result of a slip and fall.  As a result of the fall the Plaintiff injured her knee.  Before trial the Defendant made a formal offer for $50,000 on an “all-in” basis (meaning inclusive of all damages, costs and disbursements).  This offer was made two working days before the start of trial.
After trial, the Jury decided that the Plaintiff and the Defendant were equally at fault for the fall an awarded a net sum of $20,000 for her injuries.  The Defendant then brought a motion for costs under Rule 37B.  Mr. Justice Masuhara refused to award the Defendant any costs because the offer was not left open for consideration for a reasonable period of time.  In coming to this conclusion Mr. Justice Masuhara stated as follows with respect to timing of formal offers under Rule 37B:

I conclude that the defendant’s offer was in effect from Wednesday, January 7, 2009 to Friday, January 9, 2009.

[14] A party requires a reasonable time within which to consider an offer and decide in the circumstances existing at the time of the offer whether it should be accepted or rejected:Coquitlam (City) v. Crawford, 2008 BCSC 1507. There is case law on Rule 37B that suggests that a reasonable amount of time to consider an offer is seven days. In Arnold, Butler J. cited Bailey when he stated at para. 22 that “[a] reasonable period of time to consider an offer to settle is seven days”. In Towson v. Bergman, 2009 BCSC 978 at para. 70, Gray J. stated that the seven day period “has been applied in the case law.” I do not, however, read these cases as laying down a rule of general application. In Wright v. Hohenacker, 2009 BCSC 996, for example, Fisher J. did not consider a “seven day rule” when determining whether an offer should have been reasonably accepted, stating that, in the circumstances of that case, the fact that the offer was made only four days before trial was not particularly significant. Suffice it to say that every case must be judged on its own facts. Imposition of an inflexible rule as to what is considered a reasonable amount of time risks returning to the rigid consequences of the old Rule 37 and fettering the wide discretion intended under Rule 37B.

[15] In this case, the plaintiff was only given two days to consider accepting the offer before it expired. Apart from pointing out that the offer was made after mediation and after delivery of the defendant’s expert reports, neither party has led any evidence surrounding the circumstances at the time the offer was made. It is known, however, that the plaintiff was a resident of Ontario at the time, whereas her counsel was resident in Abbotsford. While this alone is not determinative (the plaintiff has not led any evidence of her whereabouts at the time of the offer), when an offer to settle is received, counsel and client are required to make a careful appraisal of the merits, taking into account complex and subjective factors in appraising the eventual outcome of a trial, in this case, a jury trial. Complexity is increased where the plaintiff is asked to evaluate an “all-in” offer where, by the very nature of the offer, the actual amount offered in discharge of the action is not immediately apparent.

[16] Taking into account that analysing the “all-in offer” would have required breaking out the appropriate cost consequences, and that plaintiff and counsel undoubtedly had many other things that required their attention, two days was an unreasonable amount of time in which to properly analyze the offer. Even if the offer did beat the result, counsel for the plaintiff did not have enough time to reach this conclusion within the deadline set by the defendant…

[18] Since I have decided that it was unreasonable for the defendant to expect that the plaintiff would accept the offer within two days, the policy underlying Rule 37B, which is to encourage the settlement of disputes by rewarding the party who makes a reasonable offer and penalizing the party who declines to accept such an offer, is not engaged. Accordingly, as permitted by Rule 37B(4), I decline to consider the defendant’s offer to settle in exercising my discretion relating to costs.

Another interesting point in this decision was the Court’s discussion of “all-inclusive” offers under Rule 37B.  Under the now repealed Rule 37 such offers were not allowed and could not trigger costs consequences.  Mr. Justice Masuhara ruled that such a strict prohibition is not warranted under Rule 37B but parties should make such “all-in” offers at their own peril, Specifically the Court stated as follows:

24] Since the introduction of Rule 37B, there is no longer a complete code to dictate the cost consequences of an offer to settle. Rule 37B contemplates a summary procedure to determine costs. It offers broad discretion to the trial judge to determine cost consequences of a failure to settle. While the defendant is no longer automatically entitled to costs from the date of the offer if the offer is more favourable than the judgment, Rule 37B(5)(d) still states that the court may in such a case “award to the defendant the defendant’s costs in respect of all or some of the steps taken in the proceeding after the date of delivery of the offer to settle.” While I accept that the consequences of an uncertainty in the calculation of costs up to the date of the offer to settle are no longer as stringent, as under the old Rules, the court is still faced with difficulty in summarily determining the relationship between the offer and the costs in an “all-in” offer. Consequently, the potential for injustice still exists. Thus, under Rule 37B, it does not appear to me that the rationale for the rule in Helm is no longer of assistance. In my view the language of Rule 37B is broad and assumes that the trial judge in every case is in the best position to determine whether an “all-in” offer can be considered. Provided that the proper form of an offer to settle is adhered to, the court has under Rule 37B the discretion to take into account that offer to settle. Nonetheless, defendants who make an “all-in” offer do so at their own peril.

In my continued efforts to get prepared for the New BC Supreme Court Civil Rules I am cross referencing Civil Procedure cases that I discuss on this blog with the New Rules.  To this end  it is worth pointing out that Rule 37B will be replaced with Rule 9 under the New Rules. The new rule uses language that is almost identical to Rule 37B which should help cases such as this one retain their value as precedents.

Double Costs Awarded After Jury Dismisses ICBC Injury Claim

Reasons for judgement were released today by the BC Supreme Court, New Westminster Registry, awarding a Defendant double costs following a Jury dismissing a Plaintiff’s ICBC Injury Claim.
This is one of the first cases that I am aware of under Rule 37B where a defendant was awarded double costs.
In today’s case (Luzuka v. Chuang) the Plaintiff was involved in an intersection collision.  Both fault and value of the claim were at issue.  ICBC, through the defendant’s counsel, made a formal settlement offer in 2007 for $40,000.  This offer was rejected by the Plaintiff.  The claim proceeded to trial which lasted 9 days before a Judge and Jury.  The Jury dismissed the Plaintiff’s claim finding that she did not prove the Defendant was responsible for the collision.
The Defendant sought an award of costs up to the date of delivery of the offer and double costs from that point on.  The application was largely successful and Mr. Justice Harvey noted that the “deterrent functions” of punishing a party who refused to accept reasonable settlement offer should not be ignored in such applicaitons.  Specifically Mr. Justice Harvey found as follows:

[24] The offer to settle was one which ought to reasonably have been accepted by the plaintiff within seven days of the disclosure to counsel of the identity of the witness, Ms. Kapil, which occurred during examinations for discovery on November 27, 2007.

[25] By that date, the plaintiff’s medical condition was well defined and it ought to have been clear to the plaintiff that liability for the accident was seriously in dispute.

[26] As was noted by Hinkson J. in Bailey, at para. 39, a refusal to award double costs following the date determined that the offer of the defendants ought reasonably to have been accepted, “would completely ignore the important deterrent function of the Rules”.

[27] Therefore, the defendants are entitled to costs and disbursements of the action until December 4, 2007, pursuant to Rule 57(9). Thereafter, the defendants are entitled to double costs together with actual disbursements, pursuant to Rule 37B(5)(b).

While no mention of the amount is made, the costs and disbursements stemming from this order would likely be in the tens of thousands of dollars.  This ‘deterrent‘ effect is a real one and unfortunately needs to be accounted for when preparing for trial where a formal settlement offer is made under Rule 37B.

As readers of this blog are likely aware, Rule 37B will be replaced with Rule 9 on July 1, 2010 when the new BC Civil Rules come into force. The new rule uses language that is almost identical to Rule 37B which should help cases such as this one retain their value as precedents.

Contact

If you would like further information or require assistance, please get in touch.

ERIK
MAGRAKEN

Personal Injury Lawyer

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.

“Work hard, be kind and enjoy the ride!”
Erik’s Philosophy

Disclaimer