Offer to Settle ICBC Personal Injury Claim

Astonishing new communication rule from our Court of Appeal will effect all personal injury cases in the Province: When parties agree to the use of email as a form of communication, once delivered to the email inbox of the other lawyer, the delivering party now has a “legitimate expectation that the email would be read”. (Great Wall Construction Ltd. v. Lulu Island Winery Ltd., 2016 BCCA 227)

This civil case was about  whether a contractor was entitled to more money than was paid or must compensate the defendants for breach of the contract. Following an unsuccessful attempt at settlement at mediation, the defendants made a formal offer of settlement under Rule 9-1 of the Supreme Court Civil Rules. The offer was contained in a letter that was served, as the rule requires, upon being delivered to the plaintiff’s solicitors at their office, having the address given in the Notice of Civil Claim as the address for service. It was also sent and received by fax transmission. The defendants offered to settle the dispute by paying the plaintiff $39,500 and reserved the right to draw the offer to the court’s attention with respect to the award of costs. No expiry date was given.

The $39,500 offer was withdrawn by email and replaced with an offer to settle the dispute upon the plaintiff paying the defendants $80,000. No expiry date was given. The letter was sent to the plaintiff’s solicitors as an attachment to the email. The message was, for reasons that are not clear, never seen by the plaintiff lawyer and there was no follow-up on the part of the defendants’ solicitors.

After the examination for discovery of the plaintiff apparently did not go well the plaintiff scrambled to accept the defendants’ initial offer to pay the plaintiff $39,500 to settle the dispute. However the defendants said that the offer was no longer on the table, despite the withdrawn being made by email.  In agreeing with the defendant the court stated,

[7]  The defendants’ $39,500 settlement offer was, as indicated, made in compliance with Rule 9–1 the purpose of which is to promote settlement. To that end the rule prescribes a procedure litigants may follow to enhance their position with respect to the recovery of costs by making offers of settlement. It does so by defining what constitutes an “offer to settle” for the purposes of the procedure. It defines an offer to settle as one made in writing that is served on all parties of record and states the right to draw it to the court’s attention in relation to costs is reserved (9-1(1)(c)). Significantly, in its present form, the rule makes no provision that governs communication with respect to an offer being accepted or withdrawn. There is no requirement that the acceptance or the withdrawal of an offer to settle be in writing or be served. The rule provides that a counter-offer does not render an offer made in compliance with the procedure expired (R. 9-1(8)) such that the procedure does not incorporate all aspects of the traditional law of contract as this Court recognized when considering an earlier version of the rule in Mackenzie v. Brooks, 1999 BCCA 623 at para. 23. The procedure is such that there may be more than one offer to settle, as defined by Rule 9-1(1)(c), outstanding at any given time with the advantage afforded with respect to costs available to any given offeror.

[8]   The judge recognized the defendants’ solicitors’ withdrawal of the offer to settle the dispute for $39,500 was, as expressed in the letter attached to their email to the plaintiff’s solicitors, clear and unambiguous and that the issue was communication. He questioned whether the delivery of the email to the plaintiff’s solicitors’ inbox was sufficient and, given what he found to be the parties’ agreed method of written communication, concluded:

[30]      In my view, it was. Just as the plaintiff and defendant had implicitly agreed to exchange communications via facsimile in Trans-Pacific Trading v. Rayonier Canada Ltd. (1998), 48 B.C.L.R. (3d) 296, the parties here agreed to the use of email as a form of communication for communications not requiring formal service. Once delivered to the email inbox of counsel for the plaintiff, counsel for the defendant had the legitimate expectation that the email would be read. It is no different than if the defendant had sent a letter via post or delivery to the plaintiff’s address and it was left unopened or misplaced in the plaintiff’s office. While prudence, and perhaps courtesy, might have warranted some follow-up given there was no acknowledgment or response to the “new offer”, such was not required.

[31]      I find the revocation contained in the August 5 email effectively revoked the Offer and, as such, it was no longer capable of acceptance thereafter. Accordingly, the application is dismissed. …

[9]   Given that it was open to the judge to conclude as he did that the agreed method of written communication was email, it cannot be said the judge was in error in concluding the offer to settle was withdrawn well before the plaintiff’s solicitors purported to accept it. The offer was withdrawn when the email was sent and received regardless of the fact it was for some reason not seen.

To understand more about offers to settle in BC watch our short video:

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