This is a good example of a personal injury case win that really turns out to be a loss (Dempsey v. Oh, 2011 BCSC 627). The injury claimant was riding his bicycle when he collided with a vehicle being driven by the defendant, likely insured by ICBC. The Judge awarded the claimant $20,000 for pain and suffering and $629.96 for out of pocket expenses. The Court refused to award money for past income loss or loss of income earning capacity (read my review of the original decision). 1.5 years before the trial the defendant made an offer to settle of $40,000.00 to the claimant. Four days before the trial the defendant made a second offer in the amount of $165,000.00. Both offers were rejected by the claimant.
This court application was to assess the costs to be awarded. The defendant argued that the claimant should only be entitled to his disbursements (expenses) because his recovery was within the limits of the Small Claims Court and he did not have a sufficient reason to commence the lawsuit in Supreme Court. ICBC further argued that, in any event, the claimant should not recover any costs after the first offer of $40,000.00 because the claimant ought to have accepted offers to settle made by the defendant on those dates. The claimant of course argued that he should be entitled to compensation for all his expenses and a contribution toward his legal fees.
The Court decided that the claimant was entitled to compensation for his expenses and a contribution toward his legal fees only up until the first offer and defendant was entitled to compensation for all his expenses and a contribution toward his legal fee after the first offer. This means that the claimant must pay ICBC for all the the expenses of the two week trial and a contribution toward their legal fees for the whole trial. Given that claimant only received a $20,000.00 award this will result in the claimant owing a substantial amount of tmoney to the defence and ultimately to ICBC as the insurer. Mr. Justice Myers justified this outcome as follows:
“[19] The plaintiff also submitted that if he is denied his costs, his modest recovery will be eradicated and that if he is ordered to pay the defendant’s costs he will end up owing it money. The plaintiff says that was not the intent of the Rules. I do not agree. It is not the court’s function to ensure that a plaintiff makes a net recovery from an action when it has ignored a reasonable offer. That would defeat the purpose of the Rule and does not accord with common sense.”
The Court however was of the view that it was reasonable, six months after the accident, for the claimant to bring this action in the Supreme Court and not in Small Claims Court. As he pointed out, “There is nothing in the rules which imposes a cost penalty on a party who files its suit quickly after its cause of action arises. And, in Reimann v. Aziz, 2007 BCCA 448, the Court of Appeal held that there is no ongoing obligation on a party to assess his action as it progresses in the Supreme Court in order to consider whether it should be moved to Provincial Court.”
Posted by Mr. Renn A. Holness
Issue Should a successful injury claimant be required to pay the other sides costs if they do not accept a reasonable pre-trial offer to settle?