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Tag: Rule 9

The Contractual Nature of Accepted Formal Settlement Offers

Written by admin on . Posted in BCSC Civil Rule 9.

As previously discussed, when a formal settlement offer dealing with costs consequences is accepted the BC Supreme Court had no discretion to make a different order with respect to costs.  Reasons for judgement were released this week confirming this principle.
In this week’s case (Tomas v. Mackie) the Defendant made a formal settlement offer $77,400.   The offer included the usual term that, if accepted, the Plaintiff would be entitled to reasonable costs and disbursements up to the date of the offer and the Defendant would be entitled to their costs and disbursements from that time onward.
The Plaintiff accepted the offer 13 days after it was derived.  During this period further costs were incurred.  The Plaintiff argued that the Defendant should be responsible for these as the Plaintiff should have the benefit of a reasonable period of time to consider the offer.  District Registrar Cameron was sympathetic to this argument but ultimately disagreed noting there is no judicial discretion to deviate from the terms of the accepted formal offer.  In reaching this conclusion the Court provided the following reasons:
[9]             Mr. Loewen submitted that the acceptance of the settlement offer constituted a binding agreement and as a result the court has no discretion to vary the terms of that agreement under Rule 9-1 or 14-1 of theSupreme Court Civil Rules.
[10]         Mr. Loewen referred to a number of authorities in support of his argument that clearly were not before Registrar Sainty…
[14]         Applying these authorities, it is clear that I do not have the discretion to vary the terms of the settlement agreement made by the parties and they should obtain a date from the Registry for the assessment of both the Plaintiff’s and the Defendants’ costs pursuant to Rule 14-1 of the Supreme Court Civil Rules.
 

"All-Inclusive" Formal Settlement Offers Can Trigger Costs Consqeunces

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

Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, finding that an “all inclusive” formal settlement offer is capable of triggering costs consequences.
In today’s case (Wettlaufer v. Air Transat A.T. Inc.) the Plaintiff sued for damages after an “aircraft touched down and then braked, an unsecured food cart struck, with force,(struck) the back of the plaintiff’s seat.”.   Prior to trial the Defendant made an offer, inclusive of costs and disbursements, of $250,000.  The Plaintiff rejected this offer, proceeded to trial and sought damages of over $1 million.  Much of the Plaintiff’s claimed damages were rejected with an award of approximately $110,000.
The Plaintiff argued the all inclusive offer should not trigger costs consequences.  Mr. Justice Funt disagreed finding there is no prohibition to formal offers which have costs and disbursements built into them.  In reaching this decision the Court provided the following reasons:
[18]         The present Rules of Court provide greater discretion to the Court and avoid the formulaic approach reflected in the older rules set forth above.  Justice Masuhara in Dodge v. Shaw Cablesystems, 2009 BCSC 1765, described the rationale for the rejection of all-inclusive offers under Rule 37 (the old rule in Helm):
[22]      The old Rules provided a complete code which determined the costs consequences of an offer to settle:  Cridge v. Harper Grey Easton, 2005 BCCA 33 at para. 20, 37 B.C.L.R. (4th) 62.  Under the old Rule 37(24)(a), if the defendant made a monetary offer to settle which the plaintiff did not accept, and the plaintiff obtained a judgment equal to or less than the settlement amount, the defendant was entitled to costs from the date the offer was delivered.  With such rigid cost consequences from which the judge had no discretion to depart, the rationale for the rule against “all-in” offers in Helm was engaged.  Where the judge was unable to discern what part of the settlement offer was for costs and what part was for discharge of the action, the judge could not precisely evaluate whether or not the plaintiff obtained judgment more favourable than the settlement offer, leading to potentially drastic consequences.
[Footnote omitted.]
[19]         In his October 18, 2012 letter, defendant’s counsel, Mr. Dery, rejected the plaintiff’s offer to settle for $996,025 plus taxable costs and countered with the $100,000 all-inclusive offer.  The plaintiff did not provide a bill of costs and disbursements.
[20]         Absent a bill of costs, the defendant’s further all-inclusive offer of $250,000 is understandable.  Most litigants seeking to resolve a dispute prefer finality.
[21]         With Helm decided on the significantly different rules, the Court is not bound by the rule in Helm that all-inclusive offers cannot be considered.  The Court’s consideration of the $250,000 all-inclusive offer accords with the text, context and purpose of the current Rule 9‑1.
 

BC Court of Appeal Discusses Discretionary Costs in Face of Formal Settlement Offers

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

Reasons for judgement were released this week by the BC Court of Appeal addressing the current landscape of judicial discretion when awarding costs in cases with formal settlement offers in play.
In this week’s case (Wafler v. Trinh) the Plaintiff was injured in a 2005 collision.  Prior to trial ICBC made three formal settlement offers, the final being $222,346.  The Plaintiff rejected this offer and proceeded to trial.  A jury assessed damages at $70,000 and after appropriate deductions this resulted in judgement of over $53,000.  ICBC applied for post offer costs.  Mr. Justice Voith did not agree that such a result was appropriate but did strip the Plaintiff of post offer costs and disbursements.  Given that the trial lasted 10 days this is a significant financial consequence.
ICBC appealed arguing “the purpose of the appeal on costs was to reverse what he described as a trend in the trial court wherein plaintiffs who succeed in “beating” an offer to settle are routinely awarded double costs but defendants who have made an offer to settle that was rejected but well within the claim value are deprived an order of costs. The defendant says this is unjust. In other words, the defendant submits there should be significant consequences to plaintiffs who fail to accept a reasonable offer.”
The BC Court of Appeal dismissed the appeal finding the trial judge fairly exercised his discretion.  In reaching this conclusion the Court provided the following reasons:
[79]         Pursuant to Rule 14-1(9) of the Supreme Court Rules, Mr. Wafler, as the successful party, is entitled to his costs unless the court orders otherwise. Pursuant to Rule 9-1(4), the court may consider an offer to settle when exercising its discretion in relation to costs. Rule 9-1(5) enumerates the orders the court may make. In making an order under subrule (5), the court may consider the factors listed in subrule (6).
[80]         The purpose for which costs rules exist, as stated in Giles v. Westminster Savings and Credit Union, 2010 BCCA 282, was referred to by the trial judge at para. 18 of his reasons (reproduced at para. 50 above).
[81]         I do not quarrel with the general proposition that a plaintiff who rejects a reasonable offer to settle should usually face some sanction in costs, even in circumstances in which it cannot be said that the plaintiff should have accepted the offer. To do otherwise would undermine the importance of certainty and consequences in applying the Rule. The importance of those principles was emphasized by this court in Evans v. Jensen, 2011 BCCA 279:
[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.
[82]         That said, under the present Rule, unlike its predecessor which mandated the result, it is for the trial judge to determine in any particular case the nature and scope of whatever sanctions are to be applied. The permissive wording in Rules 9-1(5) and (6) indicates the legislature intended to preserve the historically discretionary nature of costs awards, including an award of costs where an offer to settle has been made.
[83]         In my opinion, the judge adequately considered the factors under Rule 9-1(6) which were relevant in this case. Most significantly, the defendant’s contention that the plaintiff in this case did not suffer any consequences from his failure to accept the offers to settle ignores the fact that, as a successful party, he was deprived of his costs and disbursements from December 21, 2011, approximately six weeks before the jury’s verdict made on February 3, 2012. The verdict followed a ten day trial. Thus, the impact of the judge’s costs order was to deprive Mr. Wafler of taxable costs for the preparation of and attendance at a ten day trial, together with disbursements incurred after the offer, which presumably included fees for attendance by experts.
[84]         In these circumstances, I do not think it can be fairly said that the plaintiff in this case was not penalized for his failure to accept the defendant’s offer. In my view, the costs order reflected the underlying purpose of Rule 9-1.
[85]         In the result, I would dismiss the cross-appeal.
 

Double Costs Ordered After Baseball Brawl Lawsuit Dismissed

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

Earlier this year the BC Supreme Court dismissed a lawsuit following a fight between two adults at a Pee Wee baseball game.  Prior to trial the Defendant made several fairly modest settlement offers, one of which was a formal offer giving the Court the discretion to award double costs.  In finding it was unreasonable for the Plaintiff to reject the offer and proceed to trial Madam Justice Watchuk (Charland v. Cloverdale Minor Baseball Association) provided the following reasons ordering the Defendant to pay double costs:
[17]         Mr. Wheeler submits that the offers were offers which ought reasonably to have been accepted.  There is now general agreement on the law that, “in determining whether the offer to settle ought reasonably have been accepted the court does not consider the final result…  The reasonableness of a decision not to accept an offer must be assessed … [by] the circumstances existing when the offer was open to acceptance:” [Ward at para. 36]. 
[18]         The first offer of $3000, although not a formal offer under the Rules, was made on March 13, 2012.  It canvassed the minor injuries set out in Mr. Charland’s records, and noted that there was not the required supporting letter to substantiate the amount of an offer which had been made by Mr. Charland.
[19]         On June 8, 2012, a formal offer to settle in the amount of $5000 was served on counsel for Mr. Charland.  It was open until five minutes after the commencement of the trial.
[20]         Discoveries of Mr. Charland were held in late July 2012.  On August 2, 2012, counsel for Mr. Wheeler wrote to plaintiff’s counsel expressing reasons why Mr. Charland’s case was problematic.  Those reasons, the credibility of Mr. Charland and the nature and extent of his injuries, were later the subject of findings made at the trial which supported the position of Mr. Wheeler.
[21]         At that time, previous offers were retracted and a “nuisance offer” of $250 was formally made.
[22]         Mr. Wheeler submits that the fact that the final offer was reduced significantly following discoveries should have no effect on the determination of whether double costs are appropriate in this case.  I agree.
[23]         It was incumbent on Mr. Charland to “make a careful assessment of the strength or lack thereof of [his] case at the commencement and throughout the course of the litigation” [Hartshorne at para. 25].  Mr. Charland had knowledge, particularly after his Discovery, of the evidentiary problems in his case.  He chose to proceed to trial despite knowledge of those problems.  In light of that knowledge at the time the $5000 offer was made, and in light of the heightened knowledge at the time the nominal offer of $250 was made, his decision not to accept the offers was not reasonable.
[24]         As in Riley, Mr. Charland ought reasonably to have anticipated that his claim would be dismissed at trial.
[25]         With regard to the other factors listed in Rule 9-1(6), the relationship between the terms of settlement offered and the final judgment of the court may be considered by the court.  The second and final offers were more favourable to Mr. Charland than the decision of the court since his claim was dismissed with costs.
[26]         The court may also consider the relative financial circumstances of the parties.  Little is known regarding this factor.  It appears from the evidence that both parties have similar financial circumstances.  Both have legal costs arising from the litigation.
[27]         There are no other factors raised by Mr. Wheeler and, in the absence of submissions from Mr. Charland, no other factors that the court considers appropriate to take into account.
[28]         On consideration of the factors set out in Rule 9-1(6), I conclude that Mr. Wheeler is entitled to double costs from the date of the first formal offer, June 8, 2012. 
 

Costs Following Unsuccessful "Considerable Gamble To Achieve A Significant Award"

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

Update – July 13, 2015 – the below decision was overturned today by the BC Court of Appeal for several reasons and a new trial was ordered.  In reaching this conclusion the court noted it was improper for the Court to make a present value calculation when considering a formal offer to settle.  The Court provided the following reasons:

[53]         I agree with the appellant that the judge erred in adjusting the initial offer to reflect its 2013 value. This approach is not supported in law. As a result, the amount that the appellant was awarded ($51,300) exceeded the formal offer ($50,000) and the judge had no basis to award costs to the defendants pursuant to Rule 9-1(5)(d).

[54]         The trial judge also erred in applying the incorrect standard to determine which party was successful. The appellant was clearly the successful party in the action, as that standard is described in Loft. Though the appellant was not awarded the entire amount in damages that she sought, she established liability under a cause of action – as in Loft, by way of the defendants’ admitting liability and conceding some damages – and she obtained a remedy. The defendants did not obtain a dismissal of her case, either with respect to liability or damages.

[55]         Thus the order for costs could not have been sustained in any event of the appeal.

________________________________
Reasons for judgment were released this week by the BC Supreme Court, Vancouver Registry, addressing costs consequences following a jury trial.
In this week’s case (Han v. Park) the Plaintiff was injured in a 1999 collision that the Defendant admitted fault for.  The litigation had a “somewhat tortured history” finally coming to trial in October 2013.    The Plaintiff sought damages of over $2 million.  Following a 14 day trial a jury assessed damages at $51,300.
In 2002 ICBC tendered a formal settlement offer of $50,000.  When coupled with advances paid the offer slightly exceeded the ultimate jury award.  Given the duration of time that passed the Court was also presented with economic evidence adjusting the offer for inflation indicating it was worth about $61,100 in 2013 dollar terms.  In any event the Court was asked to assess costs consequences flowing from this formal offer.  In finding that costs should be used as a remedy where a litigant takes “a considerable gamble to achieve a significant award” the Court ordered the Plaintiff pay the Defendant’s costs from 2004 onward.  In reaching this conclusion Madam Justice Fitzpatrick provided the following reasons:
[69]         Like the plaintiff in Bailey v. Jang, 2008 BCSC 1372, aff’d 2011 BCCA 146, Ms. Han took a considerable “gamble to achieve a significant award” and lost: paras. 22, 38. Given that the majority of the time at trial was spent on her unsuccessful attempt to persuade the jury of her disability, one can only describe her as being substantially unsuccessful at trial. Accordingly, even without the application of Rule 9-1, Ms. Han would have faced meritorious arguments by the defence that a costs award should reflect that result and my conclusions below are also consistent with an analysis in this context.
[70]         She conducted herself in this litigation so as to ignore the considerable efforts of the defendants to gather evidence regarding the extent of her injuries, all at considerable cost to them. The early efforts of the defendants were geared to either provide a proper basis for a negotiated settlement or to provide the necessary evidence for a trial. All the while Ms. Han entirely failed to muster any medical opinion evidence that she either knew or should have known would be needed to support her claims at the end of the day. She refused to respond to any settlement offer until the eve of the trial.
[71]         Ms. Han’s intractable position must nevertheless be considered in the face of the July 2002 offer to settle. By this time, over three years had gone by and one would have thought that she would be in a position to critically consider her position. The offer fully addressed the position of the defendants that no brain injury had occurred. The premise of the offer was not contradicted by any medical opinion evidence obtained by Ms. Han. Even if she had chosen, strangely, to rely on the medical evidence of the defendants, by no later than May 2004, Dr. O’Shaughnessy had emphatically concluded that no disability or brain injury had resulted from the accident.
[72]         In the above circumstances, Ms. Han’s position was not an “honest but … mistaken view” per Fan, nor did she have a “meritorious, albeit uncertain claim” per A.E.
[73]         The defence calls Ms. Han “delusional” and while the remark is uncharitable, it is not far from the mark. Ms. Han has purposely conducted this protracted litigation where there was no basis in the evidence upon which to conclude other than that she had suffered a relatively straightforward soft tissue injury. Despite that, 14 years of litigation has gone by, no doubt at great cost to the defendants and to those who have financially supported this litigation on behalf of Ms. Han.
[74]         I conclude that Ms. Han is entitled to her taxable costs, including disbursements, of the action to May 2004. The defendants are entitled to their taxable costs, including disbursements, from June 2004 which will include this application to determine costs. Both costs awards will be on Scale B.

Revocation of a Formal Settlement Offer "Can Be Oral or Written"

Written by admin on . Posted in BCSC Civil Rule 9, Uncategorized. 179 Comments on Revocation of a Formal Settlement Offer "Can Be Oral or Written"

Reasons for judgement were published last week by the BC Supreme Court, Vancouver Registry, confirming a formal offer to settlement made under the BC Supreme Court Rules can be revoked verbally or in writing.
In last week’s case (Ladret v. Stephens) the Plaintiff was injured in a collision and sued for damages. Prior to trial the Plaintiff made a formal offer to settle for $75,000.  A series of informal offers were then made by the parties before the trial commenced which was ultimately adjourned as no judge was available.   Following the passage of some time defence counsel gave notice that they were accepting the $75,000 formal offer.  The Plaintiff opposed this acceptance arguing the offer was revoked.  Mr. Justice Greyell agreed and provided the following reasons:
[29]         It is my view that that offer was not open for acceptance. It is my view, based on the facts that have been placed before me, that the offer of $75,000 had been withdrawn expressly during the telephone conversation and that the defendants in accepting that offer proceeded to do so on the mistaken belief that the withdrawal of the offer had to be in writing to be effective.
[30]         I am supported in that finding by the following paragraph in an e-mail sent by the defendants to Mr. Gourlay, a portion of which reads:
The crux is your formal did not stipulate an expiration and you did not revoke it. As such, it was open for acceptance by the defendants. As it was drafted, it was open for acceptance up until judgment. Although not required by Rule 9-1, if you intended to revoke your formal you would have to do so in writing.
[31]         The case law is clear that a revocation can be oral or written. The question is whether such revocation is clearly and unequivocally given, citing Janzen v. Janzen, 2011 BCSC 1146, 2011 B.C.J. No. 1605.
[32]         In my view, given the contents of the April 22nd discussion between Ms. Owen-Blas and Mr. Gourlay, it was clear the offer of $72,500 had been revoked, that offer in itself revoking the $75,000 prior offer.

"Genuine Belief" in Entitled Damages Will Not Avoid Formal Settlement Offer Costs Consequences

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

In a fairly routine exercise of the Court’s discretion, reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, ordering a Plaintiff to pay the Defendant’s trial costs for failing to best a pre-trial formal settlement offer in a personal injury claim.
In this week’s case (Wilson v. Honda Canada Financial Inc.) the Plaintiff was involved in a 2009 rear end collision.  Fault was not at issue.   Although the Court found that there “are serious issues regarding (the Plaintiff’s) credibility”  Madam Justice Fitzpatrick concluded the Plaintiff suffered a variety of soft tissue injuries, some of which remained symptomatic on an intermittent basis at the time of trial.  Six weeks prior to trial the Defendant made a formal settlement offer of just over $121,000.  The Plaintiff sought an award well above this at trial but many of the claimed damages were rejected with the court assessing damages about $25,000 below the formal settlement offer.
The Defendant sought post offer costs and these were granted.  In finding that a Plaintiff’s “honest belief” in entitlement to damages does not avoid the costs consequences intended by the Rules of Court, Madam Justice Fitzpatrick provided the following reasons:
[11]         Mr. Wilson argues that he “genuinely believed” that he had incurred a past and future wage loss because he was unable to work for Taja. With respect, it can hardly be the case that honest belief alone will avoid the intended effect of the Rule. This is similar to my rejection of his honest belief as to disability where that belief was not supported by any medical evidence: Reasons, para. 137. As set out in the Reasons, there were numerous difficulties with Mr. Wilson’s arguments regarding Taja, including the lack of proper documentation, lack of medical evidence, and a rejection of his testimony on this issue (see paras. 120-146, 157-163). His claim for future massage therapy of $30,000 was also rejected for the reason that no medical evidence supported that claim.
[12]         Finally, Mr. Wilson’s evidence also suffered from credibility problems particularly where not supported by other credible evidence: Reasons, para. 42. Failure to anticipate credibility issues will also not avoid the operation of the Rule: Gehlen v. Rana, 2011 BCCA 219 at paras. 50-51.
[13]         Mr. Wilson argues that he should not be penalized for “guessing wrong”, citing Fan (Guardian ad litem of) v. Chana, 2009 BCSC 1497. However, it is clear from the comments of the court in that case that there were difficult issues relating to the evidence and how any offer could be dealt with, particularly given the involvement of the public trustee. Similar difficulties do not arise in this case.
[14]         I agree that a party is not required to “guess” about the probable outcome; rather, he or she is required to fairly and objectively assess the evidence intended to be adduced at trial and make a reasoned decision about the relative merits of the claim or defence, having in mind a certain amount of litigation risk. In essence, the party receiving the offer must critically review the merits of the claim in relation to the amount offered. As the court noted in Fan, quoting A.E.:
[62]      Regardless of the merits of the plaintiff’s claim the defendant’s offer to settle cannot be ignored, because to do so would undermine the purpose of the Rule. Having decided to proceed in the face of a not insignificant and ultimately successful offer to settle, the plaintiff cannot avoid some consequences.
[15]         The offer amount, while not approaching the amounts sought by Mr. Wilson, in all likelihood fairly assessed the claims about which there was no dispute and added further amounts for the litigation risk that the more contentious claims would go against the defendants. The offer was, no doubt, also prepared recognizing the substantial cost to both parties if the matter proceeded to trial. It cannot be understated that one of the purposes of the Rule is to avoid costs of proceeding further in the action: Martin, para. 8.
[16]         I conclude that the offer should reasonably have been accepted by Mr. Wilson shortly after it was made and that this factor favours the defendants…
[24]         I conclude that all factors to be considered under Rule 9-1(6) favour the costs award sought by the defendants. Accordingly, Mr. Wilson will recover his assessed costs and disbursements up to April 27, 2013, which is 5 days after the offer was sent in recognition that some reasonable period of time would have been necessary to consider the offer. Thereafter, the defendants will recover their assessed costs and disbursements commencing April 28, 2013. After assessment of these respective amounts, the parties shall set off the awards to produce a net award.

Pending Appeal No Reason For Trial Judge Not To Finalize Costs

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

Short and to the point reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, awarding a plaintiff double costs after proceeding to trial and besting a pre-trial settlement offer.
In the recent case (Codling v. Sosnowsky) the Plaintiff was injured in a motor vehicle collision.  Prior to trial she made a formal settlement offer for $55,000.   ICBC rejected this and proceeded to trial where she was awarded just over $70,000.  The Court awarded the Plaintiff double costs for besting the offer.  ICBC argued that it was premature to settle costs as the case was under appeal.  Mr. Justice Smith quickly disposed of this argument providing the following reasons:
[3]             The defendant also says it is premature to deal with costs because he has filed an appeal and even partial success could reduce the award to an amount below the offer to settle. I do not accept that argument. The duty of this court is to finalize its own judgment. If the Court of Appeal finds that judgment to be in error, the costs consequences will change accordingly.
In confirming that this was an appropriate case for double costs Mr. Justice Smith reasoned as follows:
[7]             On the basis of the evidence that the parties could reasonably have anticipated being called at trial, I find that the plaintiff’s offer represented a reasonable effort to assess her possible recovery. It was one the defendant should have recognized as being within the range of possible awards and ought reasonably to have been accepted, particularly when weighed against the cost of going to trial. I recognize that liability was denied and the plaintiff’s offer made no apparent discount for risk on that issue, but this was a rear-end collision and the defendant had little prospect of success on liability or contributory negligence.

No Costs Consequences Triggered With Marginal ICBC Victory Over Formal Settlement Offer

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

Reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, addressing costs consequences following a trial where ICBC marginally beat their pre-trial settlement offer.
In last week’s case (Wattar v. Lu) the Plaintiff  was injured in a collision in which she and the Defendant were found equally at fault.  After the liability split the Plaintiff’s net damages awarded at trial came to $26,000.  Prior to trial ICBC made a formal offer of $27,500.  ICBC applied for costs consequences to flow from the Plaintiff’s choice to proceed to trial.  Mr. Justice Smith exercised his discretion and refused to award such consequences noting that the unrecovered potion of damages due to the operation of the Negligence Act was punishment enough.  The Court provided the following comments:
[13]         This was a three-day trial. In the absence of an offer to settle, the plaintiff would have been entitled to half of her costs, or $5,500, to reflect the division of liability. That would include $2,250, representing half of the costs attributable to three days of trial ($1,500 times three, divided by two). That is the proper amount by which to reduce the plaintiff’s costs as a consequence of her refusal to accept the settlement offer.
[14]         Counsel for the plaintiff argues that the plaintiff should recover all of her disbursements related to damages because she was substantially successful on that issue, but for the reduction resulting from the liability finding. I cannot accept that argument because the offer clearly encompassed a reasonable assessment of the plaintiff’s damages, discounted for the substantial liability risk. Acceptance of the settlement offer would have made it unnecessary for the plaintiff to prove her damages at trial.
[15]         The plaintiff is therefore entitled to costs of $3,250, plus one half of her disbursements to the date of the offer. In view of the modest award and the relatively small gap between the offer and the judgment, I do not consider it appropriate or necessary to further punish the plaintiff with an award of any portion of the defendant’s costs.

"Unreliable" Plaintiff Punished With Double Costs Award After Failing to Best Defence Offer

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

Update Auguaat 16, 2013 – In an interesting development, the below judgement was overturned by the Chambers Judge before entry of the costs order.  You can find reasons here
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Reasons for judgement were released last week by the BC Supreme Court, New Westminster Registry, ordering a plaintiff to pay double costs to a defendant following a personal injury trial which failed to best the Defendant’s pre trial formal settlement offer.
In last week’s case (Gulbrandsen v. Mohr) was injured in a collision.  In the course of the lawsuit the Defendant offered to settle for $50,000.  The Plaintiff rejected this offer and proceeded to trial where a less favorable result was reached with damages being assessed at just over $28,000.
In the course of the trial the Court made negative findings about the Plaintiff’s reliability.  In stripping the Plaintiff of her post offer costs and ordering that the Plaintiff pay double costs to the Defendant Mr. Justice Affleck provided the following reasons;
[5]             In exercising that discretion there are three possible approaches I have considered. The first would be to award costs to the plaintiff up to the date of the offer and deprive her of costs thereafter. In my view that outcome cannot be justified. It would largely ignore the intent of the rules to provide for an award of costs in favour of a party who has made an offer which ought to have been accepted but was not. The second alternative would be to award the plaintiff costs up to the date of the offer and the defendant single costs thereafter. I would be inclined to make that award if the award of damages had fallen only slightly short of the offer. It did not.
[6]             The remaining possible outcome I have considered is to award the plaintiff costs to the date of the offer and to award the defendant double costs thereafter, as he proposes. The factor which might militate against doing so is the relative financial circumstances of the parties. The plaintiff is a woman of modest means. I know nothing of the remaining defendant, Mr. Mohr’s, means. The action was defended by counsel instructed by ICBC. The court may take into account the presence of insurance coverage when assessing the relative financial circumstances of the parties: Smith v. Tedford, 2010 BCCA 302 at para. 19. However, the presence of insurance coverage is not always a relevant factor. As the court observed in Hunter v. Anderson, 2010 BCSC 1591 at para. 22:
…it is in circumstances where a defendant’s insurance coverage creates an unfair advantage leading to unnecessary costs through testing the plaintiff’s case, where an insurer’s financial circumstances supplant those of the litigant as a factor to consider in determining costs.
[7]             I find that the presence of insurance coverage in the present case did not create an unfair advantage leading to unnecessary costs. It was the plaintiff who unreasonably rejected the defendant’s offer to settle. Therefore, I am unable to find a relevant significant disparity in the relative financial circumstances of the parties.
[8]             Unless there is some compelling reason to the contrary, the defendant is entitled to double costs from the date of the offer. Not only is there no reason to the contrary, in my view there is a compelling reason to accept the defendant’s argument. In my reasons for judgment which awarded damages to the plaintiff, I nevertheless found the plaintiff was an unreliable witness. This was not simply a matter of a witness who was honestly mistaken. I concluded the plaintiff had attempted to persuade me of facts that she knew were not true. On the costs hearing the plaintiff complained about my conclusions regarding her credibility but the costs hearing was not an occasion to re-argue her case for damages.
[9]             The plaintiff will be entitled to her costs up to the date of the offer to settle and the defendant will be entitled to double costs thereafter.

 One issue that apparently was not argued on this application was whether the Rules of Court allow for double costs in these circumstances.  While Rule 9-1 provides a Court with broad costs discretion following trials with formal offers in place, Rule 9-1(5)(b) seems to limit the Court to single post offer costs to a Defendant where they best their formal settlement offer.  I am not sure if this matter has been judicially considered but it is certainly an argument a Court would need to grapple with if asked to do so.