Further to my numerous posts discussing the development of Rule 37B, reasons for judgement were released today demonstrating that this Rule’s application is still being shaped by the BC Supreme Court.
The one factor that has yet to receive judicial agreement is whether the defendant being insured is a factor the Court can consider when exercising its discretion to award costs under the rule. There are cases going both ways and today’s case shows that the debate goes on.
In today’s case (Wittich v. Bob) the Plaintiff was injured in a car crash. Her husband was the at fault driver. She sued for damages. Before the trial the Defendant (through his insurer ICBC) made a formal offer to settle the case for $40,100. Later the Defendant withdrew this offer and made a second formal under Rule 37B to settle the case for $65,000. The Plaintiff rejected this offer, made her own formal offer of $196,000 and proceeded to trial.
At trial the Plaintiff sought damages of $847,000. The claim was largely unsuccessful with the Court awarding just over $31,000 in damages. (You can click here to read my summary of the trial judgement).
The Defence then brought a motion to be awarded costs and disbursements. This application was partially successful with the Defendant being awarded their costs and disbursements from 6 weeks before trial through trial. Before coming to this decision, however, Madam Justice Bruce was asked to consider whether the fact that the Defendant was insured with ICBC was a factor the court can consider when weighing the financial positions of the parties. The Court ruled that this indeed is a relevant factor holding as follows:
 Turning to the financial circumstances of the parties, it is clear that, as a married couple, the plaintiff and the defendant have the same economic position. The authorities are divided as to whether the circumstances of the insurer should be considered as a relevant factor in an order for costs. In the particular circumstances of this case, I find it is appropriate to consider the insurer’s resources in comparison to the plaintiff’s. The defendant Mr. Wittich supported his wife’s claim and testified that her pain and suffering after the accident was considerable and prolonged; however, counsel for the defendant took an entirely different position in argument. Thus it must be inferred that counsel was taking instructions from the insurer and not the litigant.
 The plaintiff is not a wealthy person. She has not worked for a considerable period of time. The defendant has an income of less than $70,000 per year. I thus find that their economic circumstances are far less substantial when compared to that of the insurer. It is also apparent that an award of costs may deprive the plaintiff of the judgment awarded at trial. These are factors in her favour.
Rule 37B has been on the books now for almost two years. The Court is clearly conflicted about whether the availability of insurance is a relevant factor under the rule. When the New BC Supreme Court Rules come into force on July 1, 2010 Rule 37B will be replaced with Rule 9. Rule 9 uses language that is almost identical to Rule 37B so the lack of clarity will likely continue. In light of the on-going conflicting authorities it will be useful if the BC Court of Appeal addresses this issue.