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Tag: settlement offers

Defendant Refused Costs at Trial For Failing to Consent to Small Claims Court Transfer

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


Reasons for judgement were released today addressing whether a Defendant who beat a formal settlement offer should be awarded costs.
In today’s case (Cue v. Breitkruez) the Plaintiff was involved in a rear-end collision.  He sued the rear motorist for damages.  Prior to trial the Defendant made a formal settlement offer for $1.  With liability being hotly contested the Plaintiff proposed that the case be transferred to Small Claims Court.  The Defendant refused to consent stating that “such a transfer would result in greater delay“.
At trial the Plaintiff’s case was dismissed with a finding that the Plaintiff was responsible for the collision.  (You can click here to read my summary of the trial judgement).  The Defendant then applied to be awarded double costs pursuant to Rule 9-1(5) because they beat their formal offer at trial.
Mr. Justice Smith dismissed the application noting that since Rule 14-1(10) generally restricts Plaintiff’s awarded an amount within the small claims court jurisdiction from being awarded trial costs that the Defendant should be refused costs for not agreeing to have the case heard in Provincial Court.  Specifically Mr. Justice Smith noted as follows:

7]             The matter remained in this court subject to an agreement to still limit the claim to what could be awarded in Provincial Court. Had my liability decision been different and the matter proceeded to an assessment of damages, Rule 14-1(10) would have been a bar to an award of any costs, other than disbursements, in favour of the plaintiff.  In my view, fairness requires that the same limitation apply to the successful defendant, particularly as the defendant did not agree to the proposed transfer to Provincial Court.

[8]             I therefore decline to award any costs to the defendant, other than disbursements.  There is therefore no need to consider the offer to settle because there are no costs to double.

More on ICBC Claims and the Timing of Formal Settlement Offers

Written by admin on . Posted in Civil Procedure, Settlement Law, Uncategorized.


One principle that is becoming well defined with respect to Rule 37B is that settlement offers made on the eve of trial may not trigger any costs consequences.  Reasons for judgement were released today demonstrating this.
In today’s case (Parwani v. Sekhon) the Plaintiff was injured in a 2004 BC car crash.  The Plaintiff sued for damages.  As trial approached the Plaintiff offered to settle his case for $37,000 plus costs and disbursements.  On the last business day before trial the Defendants responded with a formal settlement offer under Rule 37B for $10,000 plus 50% of disbursements.
The claim went to trial and the Plaintiff claimed damages of $270,000.  The claim was largely unsuccessful with the Plaintiff being found 75% at fault.  Damages were assessed at $25,000 leaving an award of $6,250 for the Plaintiff (25% of $25,000).
The Parties could not agree on costs consequences.  The Defendants argued that since they beat their formal offer they should be awarded the costs of trial.  Madam Justice Ross disagreed with this submission finding that while the Defendants offer should have been accepted it was simply made too late.  In declining to award the Defendants any costs the Court reasoned as follows:

[18] The defendants submit that the offer to settle was one that ought reasonably to have been accepted given the evidence with respect to the liability issue. In addition, the position taken by the plaintiff at trial with respect to his losses was unreasonable given the medical evidence and the paucity of evidence to support the claims. The offer exceeded the plaintiff’s recovery at trial. The position of the plaintiff was that he did not have adequate time to consider the offer, coming as it did on the eve of trial. Moreover, had the plaintiff accepted the offer, considering the disbursements already incurred, the plaintiff would have recovered only $765.34. Accordingly, it was not reasonable to accept the offer. The plaintiff had made an early offer to settle that reflected a considerable discount to reflect the uncertainties in the case.

[19] In my view, while the defendants’ offer was reasonable, it was not early. It came on the eve of trial, after substantial costs and disbursements had been incurred. Such an offer is not the embodiment of the conduct the rule intends to promote. In the circumstances, and considering the factors identified in the rule, I am not prepared to consider the offer in relation to the award of costs.

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.

You can click here to read access my archived posts discussing Rule 37B in injury lawsuits.

ICBC Injury Claims, Settlement Offers, Rule 37B, Sanderson Orders…

Written by admin on . Posted in BC Supreme Court Costs Cases, Civil Procedure, ICBC Liability (fault) Cases, Jury Trials, Uncategorized.

Where to begin…
Important reasons for judgement (Burdett v. Mohamed) were released on Friday by the BC Supreme Court, Vancouver Registry addressing a host of topics in the context of BC personal injury litigation.
By way of background the Plaintiff was a passenger in a 2002 motor vehicle accident.  She was riding in a vehicle operated by Mr. Mohamed and this vehicle collided with a vehicle operated by a Mr. Samuel.
The Plaintiff suffered various injuries including a traumatic brain injury.
The Defendant Mohamed was charged with Dangerous Driving and was deemed to be in breach of his insurance policy.  Accordingly, ICBC, Mr. Mohamed’s insurer defended the claim as a ‘statutory third party.’
There was reason to believe that Mohamed was solely responsible for the collision however the Plaintiff’s lawyer sued both Mohamed and Samuel.  The reason being was concern about limited insurance coverage.  Mohamed only had $1 million in insurance coverage.  The Plaintiff was not the only injured party and when sharing this money with the other claimants the Plaintiff was concerned she would be significantly undercompensated if this was the extent of her recovery.
ICBC made an offer to the various claimants to “get together to divide among themselves the $1,000,000 third party liability (coverage).”   This offer was not accepted and the Plaintiff proceeded to trial.
Prior to trial the Plaintiff made a formal offer to settle her claim against Mohamed for $1.5 million.  The Defendant Samuel made a formal offer to the Plaintiff to ‘walk away’ on a costs free basis.  After a lengthy trial the case against Samuel was dismissed, the Jury found Mohamed responsible for the Plaintiff’s injuries and the Plaintiff 20% contributorily negligent for her own injuries.   After this reduction in liability the Plaintiff was awarded over $1.8 million in damages.
The Court was asked to decide, amongst other things, whether the Plaintiff should be awarded double costs against Mohamed, whether Samuel should be awarded double costs against the Plaintiff and whether the Mohamed should pay to Samuel any costs the Plaintiff is exposed to.
Rule 37B – Is it reasonable to go to trial for a claim exceeding the Defendants insurance coverage?
The Plaintiff was awarded double costs for beating her formal offer of settlement against Mohamed.  In coming to this decision the Court had to grapple with an area of law that is still open to debate, specifically, when considering whether to award double costs can a court consider the insurance coverage available to the parties?
There are cases that go both ways on this topic and the law is not yet set in stone.  Usually Plaintiff’s argue that this is a relevant consideration and Defendants argue it is not.  Interestingly, here it was ICBC that was arguing the presence of insurance could be “the central factor driving the Court’s analysis under Rule 37B.”.  The Defendant submitted that the Plaintiff was unreasonable in going to trial “knowing of the third party liability policy limits“.
Madam Justice Boyd “entirely reject(ed) this submission.”   Specifically the Court held as follows:
[36] In my view, having never received an actual offer of settlement from the Third Party, it was reasonable for the plaintiff to choose to proceed to trial in this case.  She could expect that she would recover judgment against at least Mohammed and Dubois.  The judgment would also likely be in excess of the policy limits.  While the quantum of the judgment actually recovered would not exceed her pro rata share of the insurance funds (the calculation of which depended on settlements reached or judgments obtained by Maxwell and Sahota), she would still be left with the ability for the next ten years to pursue execution on the judgment against Mohammed and Dubois.  While the Third Party apparently insists that any such judgment will be dry, there is simply no evidence one way or another to confirm that likelihood.  It should also be noted that had the insurance monies been paid into court, and had the three claimants reached some agreement as to an appropriate division of the funds, the Third Party could not have enforced any requirement for a release of her claim against either Mohammed or Dubois.
Can a “Walk Away” offer trigger Double Costs under Rule 37B?
A ‘walk away’ offer is one where a Defendant, confident of winning at trial, offers that if the Plaintiff discontinues the lawsuit pre-trial that the Defendant will waive their entitlement to costs.  The Defendant Samuel made exactly such an offer to the Plaintiff.  The Plaintiff rejected this offer and went to trial.  The Plaintiff indeed was unsuccessful against Samuel.  Samuel asked for an order of Double Costs for beating their formal offer.
Madam Justice Boyd sided with the Defendants and granted the order for double costs.  The Court held that while not automatic, a walk away order is capable of triggering double costs and here it was appropriate to do so.  Specifically the court held as follows:
[56] My own impression is that faced with the grim realities of the other defendants’ limited insurance coverage, the plaintiff made a calculated decision to pursue a claim of very doubtful merit against Samuel, realizing that she would realize a substantial benefit even if Samuel’s liability was limited to a small percentage.  But for the insurance situation, I am confident that the Samuel offer would have been accepted early on by the plaintiff.  ..

[60] As Hinkson J. noted in Bailey v. Jang, 2008 BCSC 1372, the underlying purpose of the offer to settle provisions survived the repeal of Rule 37 and the implementation of Rule 37B.  That purpose is to encourage conduct which reduces both the duration and the cost of litigation, while also discouraging the conduct which has the opposite effect.

[61] I conclude that all of these factors weigh in favour of the defendant Samuel recovering double costs.

The Sanderson Issue:

When a Plaintiff sues 2 parties and succeeds only against one (which was the case here) the Court has a discretion under Rule 57(18) to order that the unsuccessful defendant pay the successful defendants costs.  This is called a “Sanderson Order”.

Here the Plaintiff, not wanting to have the ‘double costs’ order eat into into the limited $1,000,000 of insurance coverage applied for a Sanderson Order.  Madam Justice Boyd granted the order and required Mohamed to pay  Samuel’s court costs.  Vital in this decision was the fact that ICBC, in their Third Party Statement of Defence, alleged that Samuel was negligent in causing the collision.

In reaching this decision the Court held as follows:

[66] This raises the issue, was it reasonable for the plaintiff to have sued and continued her action against the defendant Samuel?  I accept that at the outset, given the evidence of the eyewitness to the effect the Dubois vehicle (driven by Mohammed) had fishtailed back and forth across the road before its collision with the oncoming Samuel vehicle, it was reasonable for the plaintiff to have joined Samuel as a defendant to the action.  However, after the receipt of the many engineering reports which overwhelmingly laid the blame on Mohammed and absolved Samuel of any negligence, was it reasonable for the plaintiff to have continued her action against Samuel?  …

[70] In my view, faced with ICBC’s plea that Samuel caused or contributed to this accident, the plaintiff had no choice but to continue her claim against Samuel.

[71] In all of these circumstances, I exercise my discretion under Rule 57(18) and find that a Sanderson order is appropriate in the case at bar, thus requiring the defendants Mohammed and Dubois to pay the costs which the plaintiff would otherwise pay to the successful defendant Samuel.

The lesson to be learned here is that if a Defendant is going to allege that another party is responsible for a car crash they should do so with caution.  The Plaintiff is free to bring them into the lawsuit and if the claims are not successful ultimately it is the Defendant who may be on the hook for the extra court costs.

Not Done Yet…

One last point.  A companion set of reasons was also released in this case on Friday addressing tax gross ups and management fees.   You can find that decision here.

More on Rule 37B – Offers to Multiple Defendants and Reality of Insurance Discussed

Written by admin on . Posted in BC Supreme Court Costs Cases, Civil Procedure, Uncategorized.

Reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, dealing with several issues under Rule 37B.
In this case (Towson v. Bergman) the Plaintiff was involved in 2 BC motor vehicle collisions, the first in 2002, the second in 2004.    At trial liability was found as against a Defendant in the first trial.  The second case was dismissed.  Leading up to trial the Plaintiff made a formal offer to all of the Defendants for $500,000.  Following trial over $1.1 million dollars in damages were awarded (click here for my previous posting on the trial judgment).
The court was asked to consider whether the Plaintiff can have double costs when her formal settlement offer under Rule 37B was made to multiple defendants.  The liable defendant argued that “the offer under 37B was invalid…because it was made to multiple defendants…and could only have been accepted by all the defendants, including the defendant’s against whom (the Plaintiff’s) claim was eventually dismissed by the court”.
Madam Justice Gray disagreed with this submission and held that there is no reason why costs consequences can’t follow a formal offer made to multiple defendants under Rule 37B.  Her reasoning was as follows:

[59] Aspen Enterprises Ltd. v. Quiding, 2009 BCSC 50, is the only case I located which considered the effect of a global offer to settle made under Rule 37B.  The plaintiffs inAspen argued that Rule 37B is “intended to be broader in application than the former rules, and therefore should apply to global offers”.  They argued that the fact that a global offer has been made should not preclude a court from considering the factors set out in subrule 37B(6) and exercising its discretion to award double costs.

[60] Fenlon J. appeared to accept this argument, although she found, on consideration of 37B(6)(a), that the offer to settle was not one that ought reasonably to have been accepted by the defendants.  The offer as framed could not have been accepted by Aspen or Kingsway without the consent of the other, and without the further consent of Landmark, which was not even a party at trial.

[61] Rule 37B places no restrictions on the court’s discretion in relation to global settlement offers.  The purpose of the rule is to facilitate and encourage reasonable offers to settle.  It requires a settlement offer to be delivered to all parties of record.  The law developed under Rule 37 regarding global offers is of little assistance.  Pursuant to Rule 37B, the consideration for the court pertaining to global settlement offers is whether the offer was one that ought reasonably to have been accepted.

[62] In considering the effect of an offer to settle on an award for costs under Rule 37B, the court may consider the following factors:

(a)      whether the offer to settle was one that ought reasonably to have been accepted, either on the date that the offer to settle was delivered or on any later date;

(b)      the relationship between the terms of settlement offered and the final judgment of the court;

(c)      the relative financial circumstances of the parties;

(d)      any other factor the court considers appropriate.

[63] The Offer Under 37B was one that ought reasonably to have been accepted by MPS.  Despite the fact that the Offer Under 37 was addressed to all defendants, it was evident at the time that MPS was the party facing the greatest risk of liability to Ms. Towson.  When the Offer Under 37B was made, it was apparent that the liability, if there were any, of Ms. Chan, Mr. Ko, and Mr. Bergman was likely to be very significantly less than the liability of MPS.

[64] Although MPS could not accept the Offer Under 37B on behalf of Ms. Chan, Mr. Ko, or Mr. Bergman, MPS could have agreed to pay the $500,000 in full settlement of the claim against it.  The eventual judgment was for roughly $1.2 million, being more than double the amount Ms. Towson offered to accept.

[65] In this case, Ms. Towson’s award against the single unsuccessful defendant, MPS, is far greater than the amount she offered to accept. Global offers made in circumstances where there is more than one unsuccessful defendant may give rise to different considerations.

[66] Ms. Towson, at the time of trial, was in difficult financial circumstances.  She was unemployed, living with her parents, and receiving social assistance and disability payments.  MPS is a government ministry.  Ms. Towson’s financial circumstances were significantly worse than those of MPS.

[67] In all these circumstances, Ms. Towson is entitled to double costs, although when the double costs should begin is discussed below.

Madam Justice Gray went on to hold that double costs should begin one week following the delivery of the offer as that was a reasonable period for the Defendants to consider their response.

The other Rule 37B issue that was addressed was whether the existence of insurance should be considered when weighing costs consequences.  Our courts are currently split on this issue.  Madam Justice Gray held that Insurance should not be considered and set out the following reasons:

[113] The British Columbia Supreme Court has divided on the issue of whether insurance should be considered in assessing the relative financial circumstances of the parties.  InBailey, Hinkson J. considered that insurance should not be taken into account:

33.       While I accept that it is likely that most drivers in British Columbia are insured by ICBC, the wording of subrule 37B does not invite consideration of a defendant’s insurance coverage. There may be good policy reasons for this. Insurance coverage limits with ICBC are not universal, and will vary from insured to insured. Certain activities may result in a breach of an individual’s insurance coverage, or the defence of an action under a reservation of rights by ICBC. A plaintiff will not and likely should not be privy to such matters of insurance coverage between a defendant and ICBC.

34.       The contest in this case was between the plaintiff and the defendants, and the insurance benefits available to the defendants do not, in my view, fall within the rubric of their financial circumstances, any more than any collateral benefit entitlement that a plaintiff may have would affect that person’s financial circumstances for the purpose of determining their loss.

[114] Conversely, Madam Justice Boyd in Radke v. Perry, 2008 BCSC 1397, 90 B.C.L.R. (4th) 132, did consider the fact that the defendants were insured by ICBC, stating, at para. 42:

It is also clear that there is a substantial disparity in financial circumstances between the parties. The defendants, represented by ICBC, had substantially greater resources to finance a trial than the individual plaintiff. Had the defendants accepted the plaintiff’s initial reasonable offer, the plaintiff would not have had to incur the significant costs associated with nearly two weeks of trial.

[115] Bailey was released on October 16, 2008, six days before the October 22, 2008 release of Radke.  Radke does not refer to Bailey, and Bailey was likely not brought to the court’s attention.

[116] In my view, the reasoning in Bailey should be preferred, and the court should consider the “relative financial circumstances of the parties” without considering the insurance benefits available to the defendant.  Here, however, there was no evidence concerning the insurance benefits available to Ms. Chan and Mr. Ko.

I will continue to post about Rule 37B cases as they come to my intention despite the fact that the current BC Civil Rules are being repealed on July 1, 2010.  The reason for this is after July 1, 2010 formal settlement offers in the BC Supreme Court will be dealt with under Rule 9-1 which has language that is almost identical to the current Rule 37B making these precedents useful.

Rule 37B and the Discretion of the Court

Written by admin on . Posted in BC Supreme Court Costs Cases, Civil Procedure, Uncategorized. 52 Comments on Rule 37B and the Discretion of the Court

As I’ve previously written, one of the biggest improvements in the new Rule 37B over it’s predecessor (Rule 37) is that it gives the Court discretion when assessing costs consequences when a party beats a formal settlement offer at trial.
Reasons for judgment were released today by the BC Supreme Court demonstrating the flexibility of this discretion in assessing fair costs consequences.
In today’s case (Petojevic v. Solari) the Plaintiff sued for personal injuries.  Prior to trial the Defendants made a formal settlement offer of $60,000.  After trial the Plaintiff was awarded a total of just over $42,000 in damages.  In the defence of the claim the Defendants incurred “costs” of $5,051 and disbursements of $2,060.
The Defendants brought an application to be awarded “double costs”.  Under the old Rule 37 the Judge would have had no discretion in making such an award and double costs would automatically be awarded in these circumstances.  Under the new Rule 37B, the court has significant discretion over the costs to be awarded when a formal settlement offer is beat due to Rule 37B(5) and (6) which read as follows:

Cost options

(5) In a proceeding in which an offer to settle has been made, the court may do one or more of the following:

(a) deprive a party, in whole or in part, of any or all of the costs, including any or all of the disbursements, to which the party would otherwise be entitled in respect of all or some of the steps taken in the proceeding after the date of delivery of the offer to settle;

(b) award double costs of all or some of the steps taken in the proceeding after the date of delivery of the offer to settle.

(c) award to a party, in respect of all or some of the steps taken in the proceeding after the date of delivery or service of the offer to settle, costs to which the party would have been entitled had the offer not been made;

(d)  if the offer was made by a defendant and the judgment awarded to the plaintiff was no greater than the amount of the offer to settle, 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.

[am. B.C. Reg. 165/2009, s. 1 (a), (b) and (c).]

Considerations of court

(6) In making an order under subrule (5), the court may consider the following:

(a) whether the offer to settle was one that ought reasonably to have been accepted, either on the date that the offer to settle was delivered or on any later date;

(b) the relationship between the terms of settlement offered and the final judgment of the court;

(c) the relative financial circumstances of the parties;

(d) any other factor the court considers appropriate.

In today’s case Mr. Justice Williamson refused to award the Defendant double costs but did award increased costs at 125% of the actual costs.  In justifying this result Mr. Justice Williamson highlighted the following facts:

[5] Here, the offer was not accepted and the matter went to trial. Nevertheless, the Court retains a discretion with respect to costs. Generally, litigants will be limited to the maximum costs allowable pursuant to Rule 66 (29) unless the Court rules otherwise.  In determining whether to “otherwise order” the circumstances to be considered may include the making of an offer pursuant to Rule 37, the relationship of the award to the offer, the length of the trial, the degree of complexity, the conduct of the litigation, the financial circumstances of the parties, and any other relevant circumstances.

[6] In addition, I have in mind the express object of Rule 66 to provide a speedier and less expensive determination of certain actions, and the object of Rule 37 to encourage settlement.

[7] The defendant concedes that in exercising a discretion pursuant to Rule 37B(5) an award may be discounted for work done prior to the delivery of an offer to settle.  They note that the ceiling for double costs awards pursuant to Rule 66 would amount to $13,200. They therefore say that their claim for costs in the amount of $10,102.24 plus disbursements is reasonable as it is equivalent to a discount of approximately 25%. In addition, the defendants note that the plaintiff was granted several adjournments and given the fact that the plaintiff was represented by counsel during two periods after the delivery of the offer to settle, he had considerable time to consider the appropriateness of the offer and the consequences of failure to accept it.

[8] The plaintiff submits Rule 66 should apply. He submits in any case the offer came after examination for discovery, an attempt at mediation, and an application to strike portions of the plaintiff’s claim. As such, he submits, any award of costs to the defendants should be limited.

[9] Here the trial took two days, the period contemplated by Rule 66. Liability was admitted, and the trial was not particularly complex, although previously existing injuries were a somewhat complicating issue. The defendant submits the plaintiff’s conduct of the litigation had a negative impact on the proceedings, a situation unfortunately not unusual when litigants represent themselves. I have no direct evidence of the financial circumstances of the plaintiff, although I infer from the evidence of impact of his injuries that he is in financial difficulty.

[10] The amount awarded at trial is more than two thirds of the amount offered by defendants. As well, on the second day of the proceedings the plaintiff succeeded in obtaining an award of special damages greater than that offered at that point by the defendants.

[11] The defendants proffered Bill of Costs in the amount of $5,051.12 plus disbursements of $2,060.02. They seek a doubling of the costs plus the disbursements ($10,102.24 plus $2,060.02 = $12,162.26).

[12] Taking all of these factors into consideration, and exercising the discretion permitted a trial judge pursuant to the Rules, I am satisfied that it would be contrary to the object of these Rules to deny the defendants application. However, I am not persuaded in the circumstances of this case that the award of costs sought by the defendants is warranted. In the result, I award costs to the defendants at 125% of their claimed costs ($5,051.12 X 1.25 = $6,313.90) plus disbursements of 2,060.02 for a total of $8,373.92.

Rule 37B and Withdrawn Formal Settlement Offers

Written by admin on . Posted in Civil Procedure.

I’ve written many times about the relatively new Rule 37B and its consequences in BC personal injury claims (click here to read my previous posts), yesterday reasons for judgement were released by the BC Supreme Court (New Westminster Registry) giving more clarity to this rule.
In yesterday’s case, ICBC v. Patko, ICBC sued the defendant alleging fraud.  In the course of the proceedings the Defendant made 2 offers to settle, one of which was withdrawn prior to trial and replaced with a subsequent formal offer.  The Jury dismissed ICBC’s claim against the Plaintiff.  In deciding what costs consequences should flow from these facts one of the issues decided by Mr. Justice Grauer of the BC Supreme Court was whether costs consequences can flow from a formal Rule 37B settlement offer when that offer is withdrawn prior to trial.  In finding that Rule 37B does permit costs consequences to be triggered in these circumstances the court stated as follows:

[31]            Jonathen Patko made a formal offer to settle to ICBC in the amount of $22,500 on June 5, 2007.  On June 4, 2008, after Mr. Patko had pleaded guilty to the quasi-criminal charge against him and had been fined and ordered to pay restitution, he withdrew that offer.  On October 23, 2008, when it became clear that a summary trial was impracticable and this matter would therefore proceed to a full trial, Mr. Patko delivered a further offer to settle in the amount of $11,000.

[32]            Because the action against Mr. Patko was dismissed, the issue addressed by my brother Goepel in A.E. v. D.W.J., 2009 BCSC 505, does not arise, except to confirm that my discretion is limited by the provisions of Rule 37B(5).

[33]            The plaintiff argues that the first offer to settle, dated June 5, 2007, is of no consequence and cannot be considered, because it was revoked a year later.  As to both offers, the plaintiff argues that neither was “one that ought reasonably to have been accepted” in accordance with Rule 37B(6)(a).  In this regard, the plaintiff pointed out that it had paid out over $55,000 as a consequence of the accident and its aftermath, and that Mr. Patko admitted his lie.  Accordingly, the plaintiff argued, both offers were for far less than what the plaintiff had paid out and might have reasonably expected to recover.  ICBC would, of course, have had to pay out that $55,000 even if Mr. Patko had not lied.  This reality did not seem to factor in its assessment of the claim and Mr. Patko’s offers.

[34]            The first question is whether I am limited to considering the second offer to settle, given that the first was revoked a year after it was made.

[35]            In my view, there is nothing in Rule 37B that would place that limitation on my discretion.  Notwithstanding the evolution of the treatment of offers to settle in the Rules, it is clear that one of the principal purposes of Rule 37B remains the same as that noted of the former Rule 37 by Cumming J.A. in Skidmore v. Blackmore (1995), 2 B.C.L.R. (3d) 201, 122 D.L.R. (4th) 330 (C.A.):

… to encourage conduct that reduces the duration and expense of litigation, and to discourage conduct that has the opposite effect.

[36]            Both offers constitute an “offer to settle” within the meaning of Rule 37B(1)(a).  Although the first offer was indeed revoked, it was outstanding for a full year.  The real question is whether, notwithstanding its eventual withdrawal, it was an offer that ought reasonably to have been accepted while it remained open.  To treat it this way is, in my view, consistent with the object described by Cumming J.A. in Skidmore.

[37]            Turning to the issue of reasonableness, I do not think that this question turns on the losing party’s view, at the time that the offer was made, of the result it might expect to achieve.  Rather, reasonableness must be viewed from the perspective of the state of the litigation at the time of the offer, and from the perspective of the result.  In this case, the issues were clear at the time of the first offer, let alone the second.  This was not a case where, for instance, further discovery and investigation was required before the plaintiff could reasonably evaluate its position in light of the offer.

[38]            As to the reasonableness of the plaintiff’s expectation, I note that it was ICBC who had chosen trial by jury, thereby accepting the degree of uncertainty that arises from that mode of trial.

[39]            Moreover, it was the plaintiff that chose to bind itself by a “zero tolerance” policy, which prevented the possibility of a compromise settlement in a case that was not a typical automobile insurance fraud claim. It was certainly open to ICBC to adopt such a policy, no doubt for its own good reasons.  But in this proceeding, the policy worked against ICBC, allowing for no flexibility notwithstanding the unique facts of the case.

[40]            In all of these circumstances, I conclude that the first offer was one which ought reasonably to have been accepted.  In choosing not to accept it because of its own assessment of the strength of its position and its “zero-tolerance” policy, ICBC took its chances, and it lost.

[41]            Taking that into account, as well as the other factors set out in Rule 37B(6), and the course of the litigation in general, I conclude that Jonathen Patko should be awarded double costs of all steps taken in this proceeding after June 5, 2007, when the first offer to settle was delivered.

Even More Analysis of Rule 37B

Written by admin on . Posted in Civil Procedure, Uncategorized. 70 Comments on Even More Analysis of Rule 37B

Well the cases seem to be coming in at a good pace and hopefully Rule 37B will start seeing some consistency in its interpretation by the BC Supreme Court.  
Today another case was released by the BC Supreme Court applying and interpreting this rule.  In this case the Plaintiff was involved in a motor vehicle collision and sued for damages.  The Defendants made an offer to settle for $16,000 plus costs under the old Rule 37.  The Plaintiff rejected the offer, went to trial and was awarded just over $12,000.  Madam Justice Morrison made the following findings about the costs consequences flowing from these facts:

Policy Reasons for the Offer to Settle Rule

[42]            I turn first to the policy reasons behind the new rule.

[43]            The Court of Appeal commented on the purpose of the former Rule 37 in several cases.  Although Rule 37 was repealed and replaced with Rule 37B, the underlying rationale of Rule 37 is, in my opinion, still informative.  Rule 37 was designed to encourage settlement.  In MacKenzie v. Brooks, 1999 BCCA 623, 130 B.C.A.C. 95, the court made the following comment on the purpose of Rule 37:

[21]      Rule 37 is clearly designed to encourage the early settlement of actions. It does so by rewarding the party who makes an early and reasonable settlement offer, and by penalizing the party who declines to accept such an offer. The reward or penalty takes the form of costs (in some cases, double costs) from the date the offer is made. The significant role which costs now play in the litigation process operates as a powerful incentive to parties to make early offers of settlement under the Rule and to accept reasonable offers.

[44]            In Skidmore v. Blackmore (1995), 2 B.C.L.R. (3d) 201, 122 D.L.R. (4th) 330 (C.A.), the Court of Appeal commented on an older version of Rule 37 and Rule 57(9) (costs follow the event) at para. 37:

[37]      These Rules are designed to discourage frivolous actions and defences and to encourage the parties to make reasonable offers to settle as early as possible. Thus, party and party costs serve many functions. They partially indemnify the successful litigant, deter frivolous actions and defences, encourage both parties to deliver reasonable offers to settle, and discourage improper or unnecessary steps in the litigation.

[45]            Rule 37B is still designed to discourage frivolous actions and encourage parties to make and accept reasonable offers.  In Alan Seckel & James MacInnis, B.C. Supreme Court Rules Annotated 2009 (Toronto: Thomson, 2008), the authors commented on the introduction of Rule 37B.  They say that the new rule was necessary because the old rules had become dysfunctional, largely because of the lack of flexibility.  They describe the new rule as a welcome improvement.  They add at 373 that “the difficulty with Rule 37B will invariably be its lack of direction for parties and trial judges as to how to effect fairness in the face of the same problems which made interpretation and application of Rules 37 and 37A so difficult.”

[46]            I agree in this respect with the following observation by Hinkson J. in Bailey v. Jang, 2008 BCSC 1372, a personal injury case heard before a jury, at paras. 17-18:

[17]      In Mackenzie v. Brooks et al, 1999 BCCA 623 (sub nom. Mackenzie v. Brooks et al) 130 B.C.A.C. 95 at p. 21, the British Columbia Court of Appeal described the predecessor rules to Rule 37B as designed to encourage settlement by, among other things, “penalizing the party who declines to accept” an offer to settle.

[18]      While Rule 37B has brought about the reversion from a strict code to a reliance on judicial discretion with respect to costs, the use of costs to encourage or to deter certain types of conduct remains, albeit based upon the factors set out in subrule 37B(6).

The Factors under Rule 37B

[47]            I turn now to the factors under Rule 37B.

[48]            In my opinion, given the fact that the offer was made three years and almost four months after the date of the accident and well over a year after the action was commenced, the plaintiff should have known what medical information was available to him.  I agree with the defendants that this is a case where Mr. Leus was working full time from the date of the accident.  It is true that in Fast Track Litigation it is not cost efficient to end up with several medical legal reports from one doctor.  However, Mr. Leus did not have any information from Dr. Hodgeson, informal or otherwise, at the time of the offer.

[49]            As the defendants point out, the plaintiff could have contacted Dr. Hodgeson earlier.  By the time the report was requested, it was already 60 days before the trial so the rule requiring notice could not have been met in any event.  The further requests that were made were well within the 60 days.

[50]            The offer was made in timely manner and at a time when the plaintiff should have known his case.  It was an offer that ought reasonably to have been accepted at the date of the offer.

[51]            While I have considered the argument that the defendants, because of the participation of ICBC, can take advantage of making an early, low offer, in my opinion there is no such unfairness demonstrated.

[52]            In this case, $16,000 is a more favourable amount to the plaintiff than the $12,748.48 ordered by the court.  This factor favours the plaintiff being penalized for not accepting an award 20 percent greater than the judgment.  The fact that the numbers are low does not change the analysis.

[53]            The plaintiff argues that he should get preference under this factor because ICBC has significantly more resources to absorb the costs of litigation than he does and, as a result, ICBC is in a unique position to make early offers to settle.

[54]            The defendants argue that ICBC is not a party and the legal principles that developed under the old rule should still apply.  It would not be fair, they argue, if they were forced to pay the entire judgment, disbursements, and their own costs after they made a reasonable formal offer that was more than the final award.

[55]            Different views have been expressed by members of the court on the question of the relevance of fact that the defendants have insurance.

[56]            Mr. Justice Hinkson made the following comments in Bailey at paras. 32-34:

[32]      Second, [the plaintiff] places her financial position against that of ICBC, as opposed to that of the defendants.

[33]      While I accept that it is likely that most drivers in British Columbia are insured by ICBC, the wording of subrule 37B does not invite consideration of a defendant’s insurance coverage.  There may be good policy reasons for this.  Insurance coverage limits with ICBC are not universal, and will vary from insured to insured.  Certain activities may result in a breach of an individual’s insurance coverage, or the defence of an action under a reservation of rights by ICBC.  A plaintiff will not and likely should not be privy to such matters of insurance coverage between a defendant and ICBC.

[34]      The contest in this case was between the plaintiff and the defendants, and the insurance benefits available to the defendants do not, in my view, fall within the rubric of their financial circumstances, any more than any collateral benefit entitlement that a plaintiff may have would affect that person’s financial circumstances for the purpose of determining their loss.

[57]            Mr. Justice Butler in Arnold said that the mere fact that the defendant is insured is not enough to deprive the defendant of costs at para. 23:

[23]      Mr. Arnold has asked that I take into account the relative financial circumstances of the parties when exercising my discretion.  I find that I am unable to do so.  First, Mr. Arnold has provided no evidence regarding his financial circumstances other than the assertion that the likely result of a costs award in favour of the defendant will leave him with no recovery from the action.  Rule 37B gives this Court greater discretion than it had under the old Rule 37.  It specifically allows the Court to consider the relative financial circumstances of the parties.  However, there will always be a substantial difference between the relative financial circumstances of the usual personal injury plaintiff and the defendant’s motor vehicle insurer.  That difference, in and of itself, is not enough for the Court to exercise its discretion to deprive the defendant of costs.  If that was the intent of the new rule, it would have been more clearly articulated.

[58]            Conversely, Madam Justice Boyd in Radke v. Parry, 2008 BCSC 1397, did consider the fact that the defendants were insured by ICBC at para. 42, a case where costs were awarded against the defendants:

[42]      In the case at bar, on a review of the Rule and the authorities, I conclude that the plaintiff is indeed entitled to double costs from the date of the August 12th offer of settlement forward…It is also clear that there is a substantial disparity in financial circumstances between the parties.  The defendants, represented by ICBC, had substantially greater resources to finance a trial than the individual plaintiff.  Had the defendants accepted the plaintiff’s initial reasonable offer, the plaintiff would not have had to incur the significant costs associated with nearly two weeks of trial.

[59]            Even if there may be cases in which the fact that a party is insured may be relevant to that party’s financial circumstances and hence the party’s ability to pay a costs award, this is not one of those cases.  Here, there is very little information about the actual financial circumstances of the plaintiff, Mr. Leus.  Though Mr. Leus says he has a mortgage and a family to support, no details are provided as to his actual income and expenses.   Nor is there much information about the actual financial information of the defendants, John Laidman, Marjorie Laidman, and Ference Sandor.  The Court cannot draw permissible inferences from the very

[60]            The defendants argue that Rule 57(10) should be considered whereas the plaintiff says that the Court is only being asked to decide entitlement to costs and not quantum, so Rule 57(10) is not applicable.

[61]            Rule 57(10) says:

A plaintiff who recovers a sum within the jurisdiction of the Provincial Court under the Small Claims Act is not entitled to costs, other than disbursements, unless the court finds that there was sufficient reason for bringing the proceeding in the Supreme Court and so orders.

[62]            I am satisfied that Mr. Leus has shown that at the time his claim was initiated, there was a sufficient reason to bring the action in Supreme Court.  The amount he was claiming was close to the line; it was appropriate to use the discovery process to obtain evidence of the others involved in the accident:  Reimann v. Aziz, 2007 BCCA 448, 72 B.C.L.R. (4th) 1.

Conclusion

[63]            In conclusion, the purpose of Rule 37B is to encourage settlement and avoid frivolous use of court resources by imposing punitive cost sanctions.  In the present case, the defendants made a reasonable offer to settle that ought to have been accepted by the plaintiff.  The offer was 20 percent higher than the plaintiff’s final award.  Given the overarching purpose of Rule 37B, Mr. Leus should be denied his costs, including his disbursements of $7,500, from the date of the offer, because he failed to accept the offer to settle.

[64]            However, though the court could award the defendants single costs, I have decided it is not appropriate to do that in the particular circumstances of this case.  The decision depriving the plaintiff of his costs meets the objectives of the Rule.  I have considered, in particular, the size of the award, the fact that it was less than $4,000 lower than the offer, and the impact of this decision on what Mr. Leus will actually receive.

Personal Injury Claims, Settlement Agreements and Repudiation

Written by admin on . Posted in Civil Procedure, Uncategorized. 60 Comments on Personal Injury Claims, Settlement Agreements and Repudiation

When offers are made for the settlement of ICBC or other BC personal injury claims the parties involved must take care not to ‘demonstrate an unwillingness to be bound by the agreement’ otherwise they risk the settlement agreement being repudiated.  Reasons for judgement were released today illustrating this principle.
A bit of background is necessary before getting into the facts of this case.  Typically in BC Personal Injury Cases from car accidents ICBC insures both the Plaintiff and the Defendant.  This is so because ICBC is a statutory insurer with certain monopoly privileges so they insure almost all vehicles in British Columbia.  In some circumstances, of course, other insurance companies are involved (for example when the offending party is an out of Province motorist).
In today’s case the Plaintiff was insured with ICBC for ‘no-fault benefits’ (also known as Part 7 benefits) and the operator of the offending vehicle was insured with Progressive.  The Plaintiff ran into problems with both companies and started a lawsuit against ICBC for no-fault benefits which were allegedly outstanding and also made a tort claim against the motorist insured with Progressive.
The tort case apparently settled for “79,605.50 plus costs of no more than $19,767.13″.  The parties then apparently settled the costs amount with Defence Counsel writing to Plaintiff’s counsel stating
I have instructions to accept your offer to settle the costs.  The adjuster will be forwarding to your office a cheque in the sum of $97,936.70 Cdn to cover the settlement including costs.  The funds will be sent on your undertaking not to release any part of them to the plaintiff until the Release and Consent Dismissal Order that I plan to fax to you today are fully executed, and on your further undertaking to return the executed documents to me as soon as reasonably possible
A few days later counsel for the Plaintiff responded stating that the Plaintiff “was not prepared to execute the release because it referred to a “Part VII action”.  It stated that the defendant was released from all claims:”
The parties tried to resolve their differences but could not.   The Plaintiff brought an application for an order to enforce the settlement agreement that was allegedly reached.  Mr. Justice Williamson refused to do so finding that the Plaintiff had repudiated any settlement agreement that may have been reached.  The courts key reasoning is set out at paragraphs 14 – 20 of the judgement which I reproduce below:

[14]            The plaintiff relies upon Cellular Rental Systems Inc. v. Bell Mobility Cellular Inc., [1995] O.J. No. 721 (Ct. J. (Gen. Div.)). At para. 24 of that decision, Chapnik J. stated:

It is well established that settlement implies a promise to furnish a release unless there is agreement to the contrary.  On the other hand, no party is bound to execute a complex or unusual form of release: although implicit in the settlement, the terms of the release must reflect the agreement reached by the parties.  This principle accords with commons sense and normal business practice.

[15]            And further, at para. 36, the learned judge stated:

The onus is on the party claiming repudiation to show that the disagreement consequent upon the settlement constitutes a repudiation of it.  Subsequent disputes should be resolved by application to the court or by common sense within the framework of the settlement to which the parties have agreed and in accordance with the common practices which prevail amongst members of the bar.  It will be rare for conduct subsequent to a settlement agreement to amount to repudiation.

[16]            In so stating, Chapnik J. referred to a decision of McEachern C.J.B.C. in Fieguth v. Acklands Ltd. (1989), 59 D.L.R. (4th) 114, 37 B.C.L.R. (2d) 62 (C.A.).  In Fieguth, the Chief Justice noted that once there has been an agreement, one party can tender whatever documents thought appropriate to complete the agreement without actually rescinding the settlement.  At page 121, the Chief Justice stated:

If such documents are accepted and executed and returned then the contract, which has been executory, becomes executed.  If the documents are not accepted then there must be further discussion but neither is released or discharged unless the other party has demonstrated an unwillingness to be bound by the agreement by insisting upon terms or conditions which have not been agreed upon or are not reasonably implied in these circumstances.

[17]            Here, the release documents were not accepted.  There was further discussion.  The question is, in the words of McEachern C.J.B.C. as stated above, has one party demonstrated an unwillingness to be bound by the agreement by insisting upon terms or conditions which have not been agreed upon or are not reasonably implied?

[18]            I conclude that is the circumstance here.  The parties appear to have agreed to settle the matter for $97,936.70 Cdn.  However, when the necessary documents, in particular the release, was forwarded to counsel for the plaintiff, the plaintiff declined to execute the release unless something was done about the plaintiff’s right to continue with the other action against ICBC. 

[19]            I have referred to the December 1, 2008, email from counsel for the plaintiff to counsel for the defendant.  In my view, the wording of it is clear.  It states “my client will sign a full release once she has been compensated for Part 7’s in the sum of $7,000”.  In other words, the plaintiff took the position that she would not complete the November 19 agreement unless she was paid an additional $7,000 or, presumably, the defendant agreed that she could continue her action against ICBC.  I conclude that to take such a position is to repudiate the agreement allegedly reached on November 19. 

[20]            In the circumstances, the plaintiff’s application is dismissed.  The defendant will have its costs.

More on Soft Tissue Injuries, ICBC, and Expert Evidence

Written by admin on . Posted in Civil Procedure, ICBC Back Injury (soft tissue) Cases, ICBC Soft Tissue Injury Cases, ICBC Whiplash Cases, Uncategorized.

Reasons for judgement were released today awarding a Plaintiff $12,000 for ‘pain and suffering and loss of amenities‘ (non-pecuniary damages) for ‘a mild soft tissue injury which had essentially cleared within 3 months or so. ‘.
The Plaintiff was rear-ended in 2006 in North Vancouver. The court found that the impact was significant. The Plaintiff complained of headaches, neck pain, low back pain, mid back pain, left elbow and forearm pain and occasional pain shooting to his knees.
In what can be described as a very unusual occurrence, the trial proceeded without any medical opinion evidence addressing the extent of injury. The Plaintiff attempted to have his GP testify but the court would not permit it as proper notice of the ‘expert opinion’ was not provided per Rule 40-A.
The court admitted the doctor’s clinical notes into evidence. The Plaintiff then tried to treat these as notice of what the doctor was going to testify to. The court found this improper and did not permit the doctor to give opinion evidence stating that:

During the trial and following submissions on the issue, I ruled that medical/clinical records cannot be said to meet what was meant by the above-quoted Rule.

[12] In my view, the basis of Rule 40A is to provide adequate notice of evidence which is to be tendered by way of an expert’s opinion to avoid trial by ambush, to avoid unnecessary delays, and to generally permit trials to be run in an orderly fashion. Use of clinical records in the manner suggested by counsel for the plaintiff does not approach, let alone meet, that objective. Rarely is a concise and clear expression of any opinion capable of being gleaned from such records, provided that they can even be deciphered, which is indeed problematic in this case. Further, there is usually nothing in those records that might clearly identify what, if any, of the facts contained therein are being relied upon for any such opinion. Finally, clinical records often contain consultation reports which, while they may be evidence of their existence, most probably cannot be relied upon without proof of the facts or opinions contained in them. I am sure that there are other objections as well.

[13] To have permitted Dr. Marcos to testify as to his opinion on the basis that his clinical records amounted to compliance with Rule 40A would, in my view, have been impermissibly prejudicial to the defendant. In that regard I note that in this case none of the grounds enumerated in Rule 40A(16) had been met. Thus, I am faced with the task of assessing damages due to Mr. Murray based upon his largely uncorroborated testimony alone. I am obliged to be mindful of the observation of Chief Justice McEachern in Price and Kostryba where he said the following:

I am not stating any new principle when I say that the Court should be exceedingly careful when there is little or no objective evidence of continuing injury and when complaints of pain persist for long periods extending beyond the normal or usual recovery.

An injured person is entitled to be fully and properly compensated for any injury or disability caused by a wrongdoer. But no one can expect his fellow citizen or citizens to compensate him in the absence of convincing evidence — which could be just his own evidence if the surrounding circumstances are consistent — that his complaints of pain are true reflections of a continuing injury.

The court went onto award $12,000 for pain and suffering and $180 for special damages.
This case is a great reminder of the need to comply with Rule 40-A if you are advancing an ICBC injury claim in Supreme Court and wish to call expert evidence to give the court an opinion about injuries, causation, future treatment, and prognosis. Failure to do so can result in the court not admitting the evidence which can badly damage an ICBC claim. Here the court expressly stated that “although an opinion of a medical expert such as a medical/legal report from (the Plaintiff’s) GP may have provided a foundation for a factual finding of continuing pain and discomfort, I unfortunately do not have the benefit of such an opinion.”
Another note-worthy result of this judgement is the apparent ‘cost’ consequences.
From reading paragraphs 25-29 of the judgement it appears that the lawyer for the defendant made a formal offer of settlement prior to trial which was greater than the judgement. In such circumstances a defendant can be awarded ‘costs’ for the trial. In this case the court awarded $4,400 in costs which would have to be subtracted from the judgement amount prior to the Plaintiff getting paid. In addition, the Plaintiff would not be reimbursed disbursements for the trial and would be responsible for the Defendant’s trial disbursements. After taking all this into account the true value of the judgement may in fact be $0. When considering ICBC claim settlement it is very important to consider the likelihood of beating ICBC’s formal offer at trial.

More on Court Costs, Settlement Offers, and Your ICBC Claim

Written by admin on . Posted in Uncategorized. 103 Comments on More on Court Costs, Settlement Offers, and Your ICBC Claim

If you are advancing and ICBC injury claim in BC Supreme Court, whether or not you are represented by an ICBC Claims Lawyer, you need to know something about Formal Settlement Offers. These settlement offers bring potential consequences if they are not accepted and these need to be considered when deciding whether an ICBC settlement offer is fair.
Rule 37 of the BC Supreme Court Rules permits parties to a lawsuit to make a Formal Settlement Offer and if the claim goes to trial and the settlement offer is beaten there can be significant Costs consequences (where the losing side has to pay the winning side tarriff court costs and disbursements which can easily exceed $10,000).
If you think of taking an ICBC claim to trial and winning I imagine you think of proving the other driver is at fault and being awarded money for your injuries. With formal settlement offers, winning is not quite that simple. If ICBC makes a formal settlement offer under Rule 37 and the judge or jury awards you less this can be considered a loss. Rule 37(24) sets out the consequences to a Plaintiff for failing to accept a Defendant offer to settle and ‘losing’ at trial, the subrule reads as follows:

Consequences of failure to accept defendant’s offer for monetary relief

(24) If the defendant has made an offer to settle a claim for money and the offer has not expired or been withdrawn or been accepted,

(a) if the plaintiff obtains judgment for the amount of money specified in the offer or a lesser amount, the plaintiff is entitled to costs assessed to the date the offer was delivered and the defendant is entitled to costs assessed from that date, or

(b) if the plaintiff’s claim is dismissed, the defendant is entitled to costs assessed to the date the offer was delivered and to double costs assessed from that date.

On the other side of the coin, there can be more than one way of winning. If you make a formal offer to settle your ICBC claim in compliance with Rule 37 and the judge or jury award you more money, Rule 37(23) sets out the consequences to the Defendant. The subrule reads as follows:

Consequences of failure to accept plaintiff’s offer to settle a monetary claim

(23) If the plaintiff has made an offer to settle a claim for money, and it has not expired or been withdrawn or been accepted, and if the plaintiff obtains a judgment for the amount of money specified in the offer or a greater amount, the plaintiff is entitled to costs assessed to the date the offer was delivered and to double costs assessed from that date.

Now, after absorbing all of the above you need to know that RULE 37 and 37A are being repealed as of July 2, 2008 and being replaced with Rule 37(B)!

That does not mean that you just wasted your time learning the above. If a formal offer to settle an ICBC injury claim is made before July 2, 2008 it needs to comply with Rule 37 or Rule 37A to trigger ‘costs consequences’.

To trigger costs consequences in an ICBC claim that goes to trial any offer made after July 2, 2008 has to comply with Rule 37B. To do so the offer must

1. be made in writing

2. be delivered to all parties of record, and

3. contain the following sentence “the [name of party making the offer] reserves the right to bring this offer to the attention of the court for consideration in relation to costs after the court has rendered judgement on all other issues in this proceeding”.

It seems that the purpose of Rule 37B) is to simplify the process of making formal settlement offers. The consequences of taking ICBC claims to court and beating (or not beating) a formal settlement offer seem to be less certain under this new rule. Rule 37B(4) sets out the consequences as follows: “The court may consider an offer to settle when exercising the court’s discretion in relation to costs”.

The options given to the court are set out in subrule 5 which states:

In a proceeding in which an offer to settle has been made, the court may do one or both of the following:

(a) deprive a party, in whole or in part, of costs to which the party would otherwise be entitled in respect of the steps taken in the proceeding after the date of the delivery of the offer to settle;

(b) award double costs of all or some of the steps taken in the proceeding after the date of the delivery of the offer to settle.

Subrule 6 sets out the factors a court may consider in exercising its costs discretion where a formal offer was made stating:

In making an order under subrule (5), the court may consider the following:

(a) whether the offer to settle was one that ought reasonably to have been accepted, either on the date that the offer to settle was delivered or on an later date

(b) the relationship between the terms of the settlement offered and the final judgment of the court;

(c) the relative financial circumstances of the parties;

(d) any other factor the court considers appropriate

I for one welcome Rule 37B. One of the biggest criticisms made by plaintiff ICBC injury claims lawyers was that the old Rule 37 was unfair to plaintiffs as a person injured in a car accident was always in a worse financial position to face the consequences of losing at trial than ICBC. This lopsided reality created a lot of pressure on people advancing ICBC injury claims in BC Supreme Court to consider settlement when faced with a Rule 37 formal settlement offer.

It will be interesting to see if our BC courts, when considering “the relative financial circumstances of the parties” will consider ICBC a party to the lawsuit of an ICBC injury claim. Typically, ICBC is not named as a defendant to a ICBC Injury tort Claim, instead those at fault for the collision are named and often they simply happen to be insured by ICBC. So ICBC is not formally a ‘party’ to most ICBC injury tort claims.

If the court is willing to consider the fact that the Defendant is insured when weighing the ‘relative financial circumstances of the parties‘ then this Rule is a welcome change for anyone advancing an ICBC injury claim. If not, perhaps the court is willing to consider this under “any other factor the court considers appropriate“.

Do you have questions about an ICBC settlement offer or the Rules of Court governing settlement offers in BC Supreme Court? If so click here to arrange a free consultation with ICBC Injury Claims lawyer Erik Magraken.