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

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.

Double Costs, Gulbrandsen v. Mohr, Mr. Justice Affleck, Rule 9, Rule 9-1. Rule 9-1(5), Rule 9-1(5)(b)

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ERIK
MAGRAKEN

Personal Injury Lawyer

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

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