Court awards double costs despite “defective” wording in formal offer

In reasons for judgment released today, the court in Hans v. Volvo Trucks North America Inc., 2017 BCSC 555, awarded both plaintiffs double costs for the trial following the plaintiffs’ formal offer to settle.  The defence argued that double costs should not be awarded as the formal offer was defective, in that it purported to offer to settle the claims of only one plaintiff, rather than both.  Mr. Justice Davies rejected the defence arguments and wrote:

[55]         The Volvo defendants assert that other factors exist which should result in denial of the plaintiffs’ application for double costs. The three factors relied upon are:

  1. A defect in both offers to settle in that they are made by an unspecified single plaintiff rather than both plaintiffs;

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[56]         Concerning the first factor the Volvo defendants submit that both plaintiffs were advancing significant claims so that it could not be objectively determined whether they intended to settle Mr. Hans’ claims, Mrs. Hans’ claims or the claims of both.

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[64]         The reality of this litigation, at all times well known to the Volvo defendants was that liability would have to be established before either plaintiff would be entitled to any recovery. Similarly it was well known that the plaintiffs’ claims for loss of past and future income earning capacity were inter-dependent and based upon the extent of the psychological injuries suffered by Mr. Hans. This was not a case in which there could have been severance of the claims of the individual plaintiffs.

[65]         While the offers to settle were potentially ambiguous, it is, in my view obvious that the intent of both offers was to settle the entirety of the action and the claims of both plaintiffs. I am also satisfied that the Volvo defendants appreciated that fact and never had any intention of accepting either offer. The failure of the Volvo defendants to seek any clarification reinforces my view that at all times they intended to pursue an “all or nothing” approach to the litigation.

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[69]         The plaintiffs are entitled to double costs from the Volvo defendants after the plaintiffs’ first offer to settle for $3 million dated February 2, 2015, which ought to reasonably have been accepted before the second offer to settle for $3.7 million was made on August 21, 2015. The plaintiffs are also entitled to double costs from and after August 21, 2015, by reason of their second offer to settle which similarly ought to reasonably have been accepted.

The full decision can be found here: http://www.courts.gov.bc.ca/jdb-txt/sc/17/05/2017BCSC0555.htm#_Toc478719343

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.

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[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.

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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 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