Court says "reprehensible conduct" not required for special costs to be awarded

In reasons for judgment released today, the court in Tanious v. The Empire Life Insurance Company, 2017 BCSC 85, awarded the plaintiff special costs despite finding no reprehensible conduct on the part of the defendant.  The plaintiff in Taniuos was forced to sue her insurance company after they wrongfully terminated her disability benefits.  The court specifically found there was no "reprehensible conduct", but nonetheless accepted the argument that not awarding the true cost of retaining legal counsel would substantially deprive the plaintiff of the value of her insurance contract, and that special costs were necessary to fulfil the essential purpose of a disability insurance policy.  In giving reasons for judgment, Madam Justice N. Brown wrote:

[11]         ... Special costs are normally not awarded unless the court finds a party engaged in reprehensible conduct in the proceedings or in the circumstances giving rise to the cause of action...

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[13]         The plaintiff does not seek special costs based on reprehensible conduct but submits that insurance claims of this nature entail other considerations that may in some circumstances justify an order for full indemnification of the insured’s costs. Those other considerations stem from the need to give effect to the fundamental purpose of the insurance contract by providing full indemnification to insureds in...situations where they are required to litigate in order to enforce the contract.

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[149]     Disability insurance claims have unique characteristics that distinguish them from other personal harm cases, such as personal injury cases, fire losses, and life insurance claims...

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[153]     The court may impose special costs for different reasons: against a defendant for reprehensible conduct or, in some cases, to ensure that the plaintiff will recover the full benefit of an insurance contract they have had to litigate to enforce, and thereby be put in the same position they would have been in had the insurer fulfilled its obligations initially.

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[155]     I am satisfied that in the particular circumstances of this case it is fitting that I exercise my discretion in making an award for full indemnification in order to put the plaintiff in the position she would have been in had she not been forced to retain counsel and enforce the contract through litigation

The full text of the decision can be found here:  http://www.courts.gov.bc.ca/jdb-txt/sc/17/00/2017BCSC0085.htm