Court criticizes ICBC for "ticking time bomb" settlement offer

In reasons for judgment posted this week, the court in Deol v. Sheikh, 2017 BCSC 1343, declined to award the defence its costs despite the fact they had substantially beaten their formal offer to settle.  In Deol, the defence made a formal offer to settle on the Thursday before trial in the amount of $450,000 (with the offer expiring at the end of the next day).  The plaintiff rejected the offer and was awarded $334,000 at trial.  In declining to award the defence its costs, Madam Justice Griffin described the defence offer as a "ticking time bomb" and held that the offer was not one the plaintiff should reasonably have accepted:

[12]         The plaintiff is unlike the insurer who was on the defence side of the case. The insurer is a serial litigant that has institutional knowledge about the risks of trial and the legal and evidentiary issues that are common in these kinds of cases.

...

[14]         In my view, it is unreasonable to expect a plaintiff suffering from this kind of medical condition to be able to make a reasoned, confident decision about an offer to settle in a high-stress situation on the eve of trial in the limited time of one day. The fact she earlier made a counter-offer within a day proves only that with her lawyer’s help she had the ability to react to earlier offers, but does not prove that she had time to react reasonably to the Offer made on June 2. In short, the earlier exchange of offers does not prove that she had reasonable time to consider the Offer made on June 2.

...

[16]         This case was dealing with a plaintiff who had a serious claim with long-term repercussions for her. When receiving a settlement offer, she would need the necessary time appropriate to someone with her injuries in order to reflect on what might be in her best interests. To penalize her by depriving her of costs or awarding costs to the defendants for not making a split-second decision about something so important to her future would, in my view, be unfair.

[17]         While the possibility of an unfavourable costs award should encourage settlements, the offer to settle rule is not intended to be a tool to impose high stakes last-minute pressure on an injured litigant.

[18]         The accident occurred in 2012, four years before trial. There was plenty of time for the defendants to make a reasonable offer in a way that would allow the plaintiff enough time to reflect on it and seriously consider it objectively.

[19]         I conclude that the plaintiff’s decision not to accept a ticking time bomb of a settlement offer delivered on the Thursday before the start of trial and open for one day only was not unreasonable.

The text of the full decision can be found here: http://www.courts.gov.bc.ca/jdb-txt/sc/17/13/2017BCSC1343.htm

 

Defence denied costs despite beating formal at jury trial

In reasons for judgment released today, the court in Bains v. Antle, 2017 BCSC 590, declined to award the defence costs despite beating its formal offer to settle.  In Bains, the plaintiff was awarded $37,800 by the jury at trial.  The defence had made a formal offer of $185,000 before trial.  In declining to award the defence its costs Madam Justice Power said:

[1]             After a ten-day jury trial in October 2016, the plaintiff was awarded by the jury, $37,800.00, an amount which was substantially less than what she was seeking and expected to receive at trial for chronic myofascial shoulder pain.

...

[3]             The defendants seek an order that the plaintiff have her costs up until the defendants’ first formal offer to settle and that the defendants be awarded their costs of the action thereafter with a set-off as appropriate.  The defendants argue that their formal offer of September 20, 2016 -- $185,000 of new money plus costs -- ought reasonably to have been accepted on the date it was delivered.

[9]             The defendants served a single report which was a records review report of orthopedic surgeon Dr. John Hummel.  Dr. Hummell was not called to provide expert testimony at trial.

[15]         The plaintiff argues that neither of the defendants’ formal offers to settle was reasonable to accept in all of the circumstances.  The plaintiff was confident that she had a meritorious claim for substantial damages including loss of future earning capacity.  The plaintiff argues that the defendants’ responsive reports supported her claim.  The plaintiff argues that the defendants’ rebuttal expert, Ms. Claudia Walker, alone supported a fairly large claim for costs of future care.

[16]         The plaintiff argues that she has incurred tens of thousands of dollars for disbursements and that as a result of the trial, the family is financially devastated, requiring withdrawal of money from her children’s accounts.

[17]         The defence argues that the plaintiff went to court attempting to obtain over a million dollar award for a soft tissue injury.  The plaintiff took a gamble and lost, and it is this kind of action that is driving insurance rates up.  The defendants offered over five times what the jury awarded and it was a reasonable offer that ought to have been accepted on the date it was delivered.

[25]         Although some of the plaintiff’s initial negotiating positions were clearly inflated, and were tactical in nature and in that regard overly optimistic, I agree with the plaintiff that her decision not to accept the offer tendered by the defendants before trial was a reasonable one.  The evidence available to the plaintiff at the time that the settlement offers were rejected included expert reports in respect of past wage loss, loss of future earning capacity, and cost of future care.

...

[36]         It is my view that all of the financial evidence at trial supports the fact that the plaintiff was a person of modest means.  Having already concluded that the settlement offer was not one which ought to have reasonably been accepted, it is evident that an order requiring the plaintiff to either pay the well-funded defendants’ costs, or in the alternative denying the plaintiff her costs, from September 20, 2016 onwards, would result in a pyrrhic victory and could have the effect of discouraging plaintiffs from pursuing valid claims.

The full decision can be found here:  http://www.courts.gov.bc.ca/jdb-txt/sc/17/05/2017BCSC0590.htm

Defence denied costs despite beating formal offer; court says “no utility” in imposing costs on plaintiff

In a costs decision released earlier this week, the court in Barta v. Silva, 2017 BCSC 410, declined to award the defence costs despite the defence beating its formal offer by a substantial margin at trial.  About two months before trial the defence made a formal offer to settle for $150,000.  The plaintiff declined this offer and was ultimately awarded $77,750 at trial.  In ordering that the parties would bear their own costs for the trial, the court appeared to be swayed by the “generous” position taken by the defendant.  Mr. Justice Affleck wrote as follows:

[1]            The plaintiff was injured in a motor vehicle accident in July 2007. The trial to assess damages took place in June 2014. In reasons for judgment indexed at 2014 BCSC 2113, damages were assessed at $77,750. The plaintiff now applies for an award of costs.

[2]            The plaintiff alleged a number of injuries the most serious of which was a mild traumatic brain injury, which was said to have deprived him of the ability to make prudent financial decisions the consequence being that he lost about $4 million in capital, as well as about $1,850,000 income to the date of trial and thereafter.

[3]            The findings at trial were that the plaintiff had not suffered a brain injury and his loss of capital and income were not caused by the accident injuries.

[4]            On May 15, 2014, the defendant had made a formal offer to settle for $150,000 plus costs and disbursements. On May 27, 2014, the plaintiff had made a formal offer to settle for $970,000 plus costs and disbursements.

[12]        The defendant's offer of $150,000 plus costs and disbursements was a serious offer. The plaintiff ought to have known that the defendant's legal advisers had a plausible basis for concluding that the plaintiff would be unable to prove a causal connection between his accident injuries and his financial losses. In my opinion the defendant’s offer ought reasonably to have been accepted.

[15]        The evidence at trial indicates that the plaintiff's assets were severely depleted by the effects of the financial downturn in 2008 and 2009. Mr. Creighton informed me that his client's income is now meagre. I can see no utility in imposing the costs of the trial on the plaintiff.

[16]        My order is that the plaintiff is entitled to his costs and disbursements to and including May 15, 2014, and that thereafter the parties will each bear their own costs and disbursements. I recognize that the usual order would be to impose the costs following the defendant’s offer on the plaintiff. The defendant, however, has proposed the disposition which I have made, which I consider to be generous to the plaintiff in the circumstances.

The full decision can be found here: http://www.courts.gov.bc.ca/jdb-txt/sc/17/04/2017BCSC0410.htm

Jury dismisses plaintiff’s claim after plaintiff turns down $75,000 offer

In an interesting costs decision released today, the court in Ross v. Andrews, 2017 BCSC 338, ordered the plaintiff to pay the defence double costs after a jury determined the plaintiff had "not been injured in the motor vehicle accident" and dismissed his claim.  In Ross, the defence made a formal offer to settle for $75,000 about three weeks before trial.  The plaintiff rejected this offer and proceeded to trial.  In ordering the plaintiff to pay the defence double costs for the entire trial, Mr. Justice Ball said as follows:

[4]             On September 18, 2014, the defendants made a formal offer to settle the action for the sum of $41,000 plus costs. This offer to settle was open for acceptance at any time before 4 pm, Pacific Standard Time on the last business day before the commencement of the first day of trial in this proceeding after which the offer would expire.

[5]             Later on May 19, 2016, the defendants delivered to the plaintiff a second offer to settle. The settlement amount in this case was $75,000 together with the plaintiff’s costs assessed in accordance with Rule 14 – 1 of the Supreme Court Civil Rules.

[6]             Neither of these offers to settle was accepted by the plaintiff. As noted above the plaintiff went to trial before a jury which lasted 15 days, and was not successful.

[21]         Based on a review of the evidence at trial, described in part above, and the cases cited, as well as a review of the submissions of counsel, I find that the offer to settle in the amount of $75,000 ought reasonably to have been accepted by the plaintiff having given consideration to the foreseeable credibility problems and the negative verdict of the jury. The offers to settle both included positive returns whereas at trial the plaintiff’s action was dismissed. The relative financial circumstances of the parties do not preclude an order for double costs in this situation. As a result, applying Rule 9-1 of the Supreme Court Rules, the defendants are entitled to the costs of this action generally and double costs of this action commencing on May 26, 2016. This date is seven days after the second offer to settle was delivered to the plaintiff; a reasonable period of time for the plaintiff to consider the offer. Double costs are awarded from May 26, 2016 until the end of the trial and will include the costs of the application to fix costs. The defendants are also entitled to disbursements but not doubled.

The full decision can be found here:  http://www.courts.gov.bc.ca/jdb-txt/sc/17/03/2017BCSC0338.htm

Plaintiff awarded double costs after beating formal offer by $300,000

In reasons for judgment released last Friday, the court in Risling v. Riches-Glazema, 2017 BCSC 252, awarded the plaintiff double costs after the plaintiff beat the defendant’s formal offer by a substantial margin.  The court also refused to stay the costs award pending the outcome of the defendant’s appeal.  In Risling, the plaintiff made an offer to settle for $315,000 and was ultimately awarded $622,500 at trial.  In awarding double costs from the date of the offer and dismissing the application to stay the costs award, Mr. Justice Affleck said as follows:

[7]             In my view:

a) The plaintiff's case was well known to the defendants at the time of the offer. The plaintiff had been examined for discovery on two occasions; had attended two medical examinations at the request of the defendants, and a mediation had taken place in June 2016;

b) the offer was made one week before the trial began which gave the defendants a full opportunity to consider it;

c) the offer had a relationship to the claim and could not be characterized as a “nuisance offer”; and

d) the offer was expressed in plain language and thus easily evaluated.

[8]             The final judgment of the court greatly exceeded the offer. The plaintiff submits her offer was a true attempt to reach a reasonable compromise of the claim and that the rationale for the double cost rule is to encourage parties to settle by taking a realistic view of the probable outcome of a trial. The plaintiff submits that rationale would be thwarted if in the present circumstances she is not entitled to double costs.

...

[10]         The defendants submit their limited understanding of the case made it difficult to quantify the claim and that, while the rationale for the rule for double costs is acknowledged, the defendants ought not to have been deterred from defending the claim for fear of a “punishing costs award”. Currie v. McKinnon, 2012 BCSC 1165 is relied on in support of that argument.

[11]         The defendants also submit that “no rationale for the offer was provided” in the plaintiff's letter of August 15, 2016.

[12]         I do not agree that no rationale was provided. The plaintiff described the heads of damages she would advance at the trial and advised that the offer took into account “Part 7 Benefits paid or payable pursuant to Section 83 of the Insurance (Vehicle) Act”. Furthermore, the defendants had an opportunity on the mediation to canvas fully with the plaintiff's legal advisers the extent of the plaintiff's claim and the evidence at trial which would be advanced to support the claim.

...

15]         The plaintiff is entitled to the costs of this action including double costs from the date of the offer.

[16]         The defendants’ request a stay of this costs award pending the outcome of their appeal. I was not referred to authority.

[17]         I consider the better procedure to be for the defendants to apply to the Court of Appeal. In Western Forest Products Inc. v. Capital Regional District, 2009 BCCA 80, Frankel J.A. refused a stay of a trial award of costs pending an appeal but found the Court of Appeal had jurisdiction to do so.

The full decision can be found here: http://www.courts.gov.bc.ca/jdb-txt/sc/17/02/2017BCSC0252.htm

Plaintiff awarded full fast-track costs for "simple case" which settled seven months before trial

In reasons released today, the Registrar in Yuan v. Fan, 2017 BCSC 147 awarded the plaintiff full 15-1  fast-track costs of $6,500 even though the file settled roughly seven months prior to trial, and despite the fact that the defendant had not been discovered and liability had been admitted.  Additionally, there was no wage loss claim being advanced and the plaintiff had only obtained two medical-legal reports at the time of settlement.  In dismissing the defence arguments that the plaintiff should be awarded less than the $6,500 cap, Registrar Nielsen wrote as follows:

[6]             The plaintiff seeks the full fast track costs of $6,500...

...

[9]             The defendants take the view that the plaintiff had significant work left to do in order to be prepared for trial. They submit the plaintiff would have to meet with her experts prior to trial and prepare lists of questions for their witness’s.  I agree.  However, that still begs the question of whether “significant preparation for trial” had taken place in the current circumstances.

[10]         In the present case liability was admitted, therefore work in that regard wasn’t needed. The plaintiff abandoned her claim for wage loss, and therefore, no pre-trial work was necessary in that regard.  Discoveries had been completed, document exchanges had been completed, and medicolegal reports had been obtained. Detailed settlement offers had been exchanged. All that remained to be done was the filing of a trial brief, attending a trial management conference, and immediate trial preparation. Immediate trial preparation is required in each and every case whether settlement occurs two weeks, or two months prior to trial.

[11]         This was not a complex case.  It was a simple case of assessing damages where there wasn’t a wage loss claim.  Simple cases require less work to be ready for trial.  The plaintiff's case has met the threshold of being significantly prepared for trial in all the circumstances.  I award the full fast track cap.

The full text of the decision can be found here: http://www.courts.gov.bc.ca/jdb-txt/sc/17/01/2017BCSC0147.htm

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...

...

[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.

...

[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.

...

[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

 

Defence denied costs despite beating formal offer to settle

In reasons for judgment released today, the court in Rutter v. Vadnais, 2017 BCSC 76, declined to award the defence costs even though they beat their formal offer to settle by $30,000.  In Rutter, the plaintiff was awarded $20,000 by a jury at trial, far lower than the plaintiff’s offer to settle of $180,000, and lower still than the defence formal offer of $50,000.  The defence also argued the plaintiff should be denied all costs as the $20,000 recovered fell below the small claims limit of $25,000.  In dismissing the defence arguments, Madam Justice B.J. Brown wrote:

[1]             This matter went to trial before a jury in February 2016. The jury awarded $20,000 in general damages comprised of $10,000 for nonpecuniary damages $5,000 for special damages and $5,000 for future care.

[2]             The parties exchanged a series of offers. The last offer from the defendant on March 6, 2014 was for $50,000...On November 6, 2015 the plaintiff offered $180,000 and the defence did not respond.

[3]             The jury award was less than the defence offer of $50,000.

...

[11]         I am not persuaded by the defendant's argument that the plaintiff should only receive disbursements to March 6, 2014 because she recovered damages in the range of a Small Claims’ award. The offers exchanged by the parties exceed the Small Claims’ limit. Those offers were reasonable estimates prepared by the parties of their view of the appropriate award of damages. Additionally, the plaintiff’s physician also diagnosed the injuries from the accident as not insignificant. Finally, the plaintiff’s conduct was not so egregious that she would not be entitled to costs. As such, there was sufficient reason to bring the proceeding in the Supreme Court.

...

[13]         The plaintiff in this case had strong medical opinions to support her position. The defence position was contrary to the weight of the medical evidence. Although the jury award is less than that offered by the defendant, I am not persuaded that the offer made was one that ought reasonably to have been accepted either on the date that the offer was delivered or any later date. As Madam Justice Adair said in Currie v. McKinnon, 2012 BCSC 1165 at para. 20: "While the purpose of the Rule is to encourage reasonable settlements, parties should not be unduly deterred from bringing meritorious, but uncertain, claims because of the fear of a punishing costs order."

[14]         Second, while the amount recovered is less than the settlement offer, that is rarely a determinative factor, particularly as jury awards are more difficult to predict than judge assessments...

[15]         The relative financial circumstances are also a neutral factor in this case. Although Ms. Rutter does have some assets, I am not able to say that losing her costs or paying Ms. Vadnais her costs would not have a dramatic financial effect on Ms. Rutter.

...

[17]         In conclusion...the plaintiff will have her costs of the action at Scale B until March 15, 2014, a reasonable time in which to consider the defendant’s offer. The parties will bear their own costs thereafter.

The text of the full decision can be found here: http://www.courts.gov.bc.ca/jdb-txt/sc/17/00/2017BCSC0076.htm

Court denies defendant adjournment request based on unavailability of key witness

In reasons for judgment published this morning, the court in Hayer v. Qatar Airways, 2016 BCSC 2477 dismissed the defendant's application for an adjournment of upcoming trial dates based on the unavailability of a key defence witness.  In Hayer, the key defence witness lived in Qatar and the defence argued that she would not be available for the upcoming trial in BC.  Further, the defence argued that the trial should be adjourned as the plaintiff's injuries had "not yet fully healed".  In dismissing both of these arguments, Mr. Justice Macintosh wrote as follows:

[5]             There are two grounds raised for the adjournment application; first, that Ms. Kastanos is unavailable for the trial as it is scheduled, and second, that the Plaintiff's injuries are not settled sufficiently for there to be a proper adjudication...

[8]             ...the evidence as filed does not in my view establish that Ms. Kastanos is unavailable for the trial as scheduled, and oral advice from counsel today indicates that indeed she may be available at the time set for the trial, which, as I noted earlier, is to begin January 23, 2017.

...

[10]         ...I am not satisfied that Ms. Kastanos is unavailable for the trial as scheduled, or that she is likely to be more available, if I can put it that way, at some alternative time.

...

[12]         The second basis for seeking the adjournment is...that the Plaintiff's injuries will not be sufficiently settled by the date set for trial...

[13]         One could always wait for ever greater certainty of outcome associated with prognosis, but that desire is to be balanced against our Supreme Court Rules which endorse the concept of obtaining speedy justice.  That is a concept which sometimes we do not honour adequately.

...

[15]         The Defendants speak of needing an opportunity to settle.  I am not certain that is a factor to be taken into account...Furthermore, nothing induces settlement discussions as readily as does a looming trial date.

[16]         The costs of the application are to the Plaintiff in any event of the outcome...

The text of the full decision can be found here:  http://www.courts.gov.bc.ca/jdb-txt/sc/16/24/2016BCSC2477.htm

 

Plaintiff denied double costs even though formal offer bested by $200,000

In reasons for judgment released today, the court in Mayer v. Umabao, 2016 BCSC 2355, declined to award double costs to the plaintiff even though he beat his formal offer by close to $200,000.00. The plaintiff had issued a formal offer to settle for $247,599.80, and was ultimately awarded $445,120.16 at trial.  Madam Justice Young said:

[2]             The plaintiff was awarded costs at Scale B. He is now applying for double costs on the basis that he offered to settle the issues of quantum and liability on January 11, 2016 for the amount of $247,599.80…

[17]         … I agree with the defendants that quantum was very difficult to assess. The issue of causation of the plaintiff’s memory problems, dizziness, unstable walking and mood changes was very much in dispute. The neurologists gave opposing opinions. The neuropsychologist found evidence of deficits which he would have attributed to the Accident but for the evidence he received that the plaintiff did not strike his head at the time of the Accident.

[19]         Although I conclude that the defendants were unrealistic in their assessment of liability, I cannot find that the defendants unreasonably rejected the settlement offer given that there were so many contentious issues to be tried. For that reason, I do not believe that the defendants should be penalized for failure to accept an offer that might later prove to have been reasonable but might just as well have been proven not to be. The offer was not so reasonable that it ought to have been accepted. There were sound reasons for not accepting the offer without the benefit of hindsight. It is my view that this is a case that needed to proceed to trial to sort out all of the unresolved issues.

[20]         I therefore deny the plaintiff’s claim for double costs. The plaintiff will have his costs at Scale B.

The full text of the decision can be found here: http://www.courts.gov.bc.ca/jdb-txt/sc/16/23/2016BCSC2355.htm