Tag: Rule 9

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

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

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

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

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

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

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

Double Costs Rejected In Face of Plaintiff Credibility Concerns

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

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

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

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

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

"Short Fuse" Formal Settlement Offer Triggers Double Costs

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

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

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

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

Double Costs Denied Following Modest Besting of Formal Settlement Offer

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

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

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

Summary Trials Are Not Trials For the Purpose of Discontinuing Lawsuits

Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, addressing whether a Plaintiff can discontinue a lawsuit when a matter is set for summary trial.
In today’s case (Binary Environments Ltd v. Batyka) the Plaintiff brought a lawsuit which was set for a summary trial following a case planning conference.  Before the summary trial took place the Plaintiff unilaterally discontinued the lawsuit relying on Rule 9-8(1) which reads “At any time before a notice of trial is filed in an action, a plaintiff may discontinue it in whole or in part against a defendant by filing a notice of discontinuance in Form 36 and serving a filed copy of the notice of discontinuance on all parties of record.”.
The Defendant brought a motion seeking to set aside the discontinuance arguing “the Plaintiff cannot escape by the side door” on the cusp of summary trial.
Mr. Justice Ball dismissed the motion finding the Plaintiff was within their rights in discontinuing finding that a summary trial is not a notice of trial.  In reaching this conclusion the Court provided the following reasons:
[25]         Additionally, setting aside the notice of discontinuance would also be contrary to Rule 9-8(1) as setting a matter for summary trial is not the same as setting a matter for a full trial: Strata Plan No. 36 v. Wilson, [1998] B.C.J. No. 308 (S.C.) at para. 12. A summary trial is a distinct mechanism with its own procedures and safeguards: Inspiration Mgmt. Ltd. v. McDermid St. Lawrence Ltd.[1989] B.C.J. No. 1003 (C.A.).
[26]         I therefore decline to set aside the plaintiff’s notice of discontinuance and dismiss that application.
The Court did, however, order that the discontinuance be with prejudice should the Plaintiff ever start similar litigation.  In exercising its discretion under Rule 9-8(8) the Court reasoned as follows:
[23]         Rule 9-8(8) provides:
Unless the court otherwise orders, the discontinuance of an action in whole or in part is not a defence to a subsequent proceeding for the same or substantially the same cause of action…
[31]         The final matter which must be decided here is whether the notice of discontinuance filed by the plaintiff be order to be a defence to any subsequent proceeding for the same or substantially the same cause of action. From the review conducted by counsel for defendant of the affidavits prepared support of the summary trial application taken together with the admission by counsel for the plaintiff that he was instructed to call no evidence in the event this matter did come forward for trial, the only rational conclusion can be drawn is that this matter must in fairness finally come to an end. I therefore pursuant to Rule 9-8(8) that discontinuance of action is a defence may subsequent proceeding or the same or substantially the same cause of action.
 

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

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

Costs Threats Against Expert Witnesses An Abuse of Process

In the first case I have seen addressing this issue, reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, striking out language in correspondence between lawyers as an abuse of process.
In today’s case (Walker v. Doe) the Plaintiff objected via letter sent to Defence counsel to the admissibility of Defense expert reports, and as part of the “boilerplate” objections Plaintiff’s counsel noted that “we shall seek sanctions personally against [expert’s name], including but not limited to special costs“.
In finding that the Rules of Court allow a Judge to strike out language in such a letter Mr. Justice Butler reasoned as follows:
[7]             Letters sent by counsel to provide notice of objection to the admissibility of an expert report are required to be served pursuant to R. 11-6(10). The notice must set out “any objection to the admissibility of the expert’s evidence that the party receiving the report … intends to raise at trial.” The notice required by the Rule is a document mandated by the Rules in which a party must set out their position for trial.
[8]             Rule 9-5(1) is not limited to pleadings but also applies to petitions and “other documents”. Document is defined in R. 1-1(1) in broad terms. There is no doubt the notice required under R. 11-6(10) is a document pursuant to that definition. However, the word must be interpreted ejusdem generis in the context of the phrase, “pleading, petition or other document”. Applying that aid to interpretation, I conclude that “other document” refers to documents which are required by the Rules to formally set out a party’s position, claim or defence. The notice under R. 11-6 (10) is such a document.
In finding the costs threat amounted to an abuse of process the Court provided the following reasons:
[15]         In conclusion, expert witnesses play an important role in the litigation process. When an expert is properly qualified within an area of expertise and the expert’s opinion evidence, which is not otherwise excluded, meets the essential criteria of relevance and necessity in assisting the trier of fact, it can be admitted to assist the court: R. v. Mohan, [1994] 2 S.C.R. 9. The Rules establish a process which provides adequate notice of expert opinions and sets up a way to challenge admissibility. There is no need to introduce into the process, by way of boilerplate language in notices under R. 11-6(10), threats of claims against experts for special costs. As I have already noted, it is entirely unnecessary. Further, it has the potential to frustrate the litigation process because it may discourage the participation of expert witnesses. In addition, and contrary to the intent of the new Rules, it would seem to place the expert in an adversarial position.
 

Excessive Delay Strips Defendant of Double Costs Entitlement

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:
 [1]             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…
[30]         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.
[31]         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.
[32]         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.
[33]         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.
 

A Balanced Costs Award Following Jury Trial

In an illustration that not all trial ‘losses’ trigger catastrophic costs consequences, reasons for judgement were released today by the BC Supreme Court, New Westminster Registry, ordering balanced costs consequences.
In this week’s case (Desharnais v. Parkhurst) the Plaintiff was involved in two vehicle collisions.   Prior to trial the Defendants provided two formal offers, the first at $50,000 the second at $75,000.  The Plaintiff, who was seeking in excess of $1 million rejected both offers and proeeded to trial.  Following a thirteen day jury trial the Plaintiff’s damages were ultimately assessed at $30,100.
Both parties had medical evidence to justify their respective positions, however, the Court noted, some of the opinions of the Plaintiff’s experts were “highly suspect”.
The Defendants sought substantial costs having bested their formal settlement offers. The Court noted a more appropriate result would be to award the Plaintiff costs up to the date of the second formal offer and to have the parties bear their own costs thereafter.  While such an order still has significant financial consequences for the Plaintiff it is far less sever than ordering payment of the Defendant’s costs. In reaching this decision Mr.Justice Saunders provided the following reasons:
[42]         On the whole, I do not consider either the First or the Second Offer as having reflected, objectively speaking, a genuine attempt at compromise. I find them to hae been more reflective of what the Applicants could reasonably have hoped to achieve if all or substantially all of the issues were resolved in their favour. I am not dissuaded from taking this view by the fact that the jury awarded even a lesser amount; I do not think it is unfair to counsel or to the jury for me to say that the jury’s decision was considerably less than what reasonably prudent counsel would have regarded as a “win” for the defence. I cannot find that either offer ought reasonably to have been accepted by the plaintiff.
[43]         As Goepel J. stated in Ward, that is the beginning, not the end of the analysis. The most basic principle underpinning the Rules relating to costs is that costs of a proceeding are to be awarded to the successful party (R. 14-1(9)). This expectation is intended to promote sensible conduct throughout court proceeding; it exists notwithstanding the broad judicial discretion to depart from the principle, which is generously built into the Rules.
[44]         In this case, the jury found that the plaintiff had successfully proven some damage. But for the offers to settle, he would be entitled to his costs. Having regard to the factors set out in Rule 9-1(6), including giving some weight to the plaintiff’s financial circumstances, I do not find that the offers were so substantial that the Applicants ought to be entitled to any indemnification against their own costs. The plaintiff’s position was not completely lacking in merit. It was not frivolous. However, the fact that the settlement offers exceeded the judgment amount cannot be ignored. The Applicants were forced to incur the expense of a trial which they were willing to avoid by paying the plaintiff a not insubstantial sum, a sum which ended up being considerably greater than the damages the plaintiff was judged to be entitled to. It would be unfair to require the Applicants to indemnify the plaintiff for the costs of advancing a claim that was ultimately judged to be greatly overvalued.
[45]         I find that the plaintiff is entitled to his costs up to the date of delivery of the Second Offer. The parties will bear their own costs thereafter.
 
 

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ERIK
MAGRAKEN

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When not writing the BC Injury Law Blog, Erik is the managing partner at MacIsaac & Company, based in Victoria, B.C. He is also involved with combative sports regulatory issues and authors the Combat Sports Law Blog.

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