Facts of this Personal Injury Case
This personal injury trial involved four car accidents. The trial lasted 17 days. The state run auto monopoly ICBC admitted liability in three of the four accidents, disputing liability in one. The Supreme Court awarded $66,000 for pain and suffering, $40,685.92 for vehicle damage and treatment expenses, and $92,607 for costs of future care (Cook v. Kang, 2022 BCSC 1255). Therefore, $199,292.92 was awarded in total. $16,847.04 was deducted on account of ICBC benefits already paid. In the result, the personal injury award was reduced to $182,445.88. This case was the ruling on legal costs.
Legal Analysis of ICBC Offer to Settle
The defendant ICBC was the successful party in one of the four car accident claims. ICBC was entitled to costs for one day of trial. Any costs or disbursements not specifically referable to that car accident were therefore allocated to the other three actions.
Cost Implications of the ICBC Settlement Offer
ICBC made a written offer to settle three to four weeks before the trial. The offer was to settle all four car accident claims for $99,999, plus ICBC benefits. The injury claimant did not respond to the offer.
Rule 9-1 permits the court to make certain alternative costs awards in circumstances where a party made a formal offer to settle. A primary purpose of Rule 9-1 is to encourage settlement and thus preserve the court’s and the parties’ resources. Subrule (5) outlines the potential cost consequences of a settlement offer, and subrule (6) sets out a list of factors.
Whether the Offer Ought to Have Been Accepted
Under Rule 9-1(6)(a), the court may consider whether the offer “ought reasonably to have been accepted”. One must consider this from the perspective of the offeree at the time the offer was open for acceptance, and not by reference to the result obtained at the end of the trial.
The Court concluded that the claimant did not act unreasonably in refusing the offer. Some of the claims may have been overstated, but the ICBC offer gave little or no recognition for the potential “upside” in the claim. The settlement offer did not present as a true compromise, and it did not offer the claimant any real incentive to settle.
Relationship between the Offer and the Final Judgment
Rule 9-1(6)(b) provides that the court may consider the relationship between the offer and the result at trial. The settlement offer was for $99,999, plus ICBC benefits, with an overall value of $211,793.96.
An offer of this sort carries with it a certain degree of uncertainty. Even accounting for the lack of certainty in the settlement offer, the judge concluded that the terms of the offer were slightly more favourable than the final judgment. This factor favoured the position of ICBC.
Relative Financial Circumstances of the Parties
Rule 9-1(c) provides that the court may consider the relative financial circumstances of the parties. In assessing the financial circumstances of the parties, the court is permitted to consider the fact that an action is being defended by an insurer, although that is not “automatically a factor to be considered against the insured party”.
However, that is only half of the analysis. Rule 9-1(c) indicates that the court may consider the “relative financial circumstances of the parties”. Thus, it is also necessary to consider the claimant’s financial position. As of the date of the award the claimant was by no means a wealthy man. The court found that an adverse costs order would likely have a significant impact on the claimant’s personal financial situation. As the judge stated:
 In Bains v. Antle, 2017 BCSC 590 [Bains], the plaintiff declined a settlement offer of $185,000, only to obtain judgment at trial in the amount of $37,800. When it came to considering the relative financial circumstances of the parties, Madam Justice Power reasoned that an adverse costs order against the plaintiff who was of “modest means”, to the benefit of the “well-funded defendants” would produce a “pyrrhic victory” that could discourage future plaintiffs from pursuing valid claims. Thus, even though the relationship between the settlement offer and the result at trial weighed in favour of the defendants, Power J. exercised her discretion against attaching any adverse costs consequence to the offer. That decision was affirmed on appeal in Bains v. Antle, 2019 BCCA 383.
There were parallels between Bains and this case. The court seriously questioned whether the claimant will ever claim from ICBC, given his attitude of mistrust toward ICBC. Against this backdrop, the court must be concerned about a costs ruling that would reduce the resources available to the claimant to fund his future care.
Conclusion as to the Costs Implications of the ICBC Settlement Offer
The ICBC offer was a reasonable one, and its terms were slightly more favourable than the final result. However, it provided no real settlement incentive to the claimant. Moreover, a costs order going against the claimant and in favour of ICBC, a “well-funded” litigant, is likely to diminish the resources available to the claimant to fund his future care. The judge concluded that the settlement offer should not deprive the claimant of the costs order to which he would otherwise be entitled for his success at trial on three of the four car accident claims. Except for one day of trial, the claimants was entitled to his full costs.