In this recent hearing referenced as Clubine v. Paniagua, 2018 BCSC 1076 brought by the Defendant, the Plaintiff is faced with costs consequences for failing to accept what is deemed to be a “reasonable offer” proposed by the Defendant pursuant to Rule 9-1 of the BCSC Civil Rules.
The Defendant made several offers. The Plaintiff made one counter-offer. The offers are noted:
Defendant June 28, 2016 $84,848. + costs and disbursements
Plaintiff $160,000. + advances
Defendant July 12, 2016 $94,848.32 + costs and disbursements
Trial Award July 25, 2016 $77,224.32
The Plaintiff did not beat the offer of July 12, 2016 at trial. The Defendant therefore seeks costs consequences against the Plaintiff pursuant to Rules 14-1 and 15-1 (15 to 17).
The Plaintiff had After the Event insurance “ATE”, which offers adverse cost protection to the Plaintiff. The policy of ATE insurance was a relevant factor and consideration that favoured the Defendant’s arguments for cost consequences to the Plaintiff. In this case, the Court states that the Plaintiff ought to have accepted the offer made on July 12, 2016 in the sum of $94,848.32 + c&d pursuant to Rule 9-1 of the BCSC Civil Rules as it was deemed reasonable. However, the Plaintiff failed to do so.
A relevant factor the court placed weight on in ordering costs post trial against the Plaintiff was the ATE insurance policy. The Court agreed with the Defendant’s arguments, which are enumerated below:
- The ATE insurance undermines the intent of the offer to settle rule;
- It allows the Plaintiff to avoid the punitive costs consequences of the rule;
- It puts the Plaintiff in a position of comfort to ignore reasonable offers to settle;
- Puts a Plaintiff in a position of comfort, with impunity, to take a risk and proceed to trial.
The Court states:
“The winnowing function of the costs rules is obviated by ATE insurance; doubtful cases can proceed through litigation without risk of adverse costs consequences. I conclude in this case that this insurance had such an effect. The ATE insurance in this case strongly weighs in favour of the defendant’s costs application.”
“The Defendant made reasonable efforts to settle this matter. The Plaintiff’s failure to accept the reasonable offer to settle should have costs consequences. The ATE insurance held by the Plaintiff is a factor that further weighs against costs following the event in these circumstances.
The offer was open to the eve of trial, July 22, 2016. In these circumstances the Plaintiff is entitled to only his pre-trial costs of $6,500. plus disbursements. The Defendant’s application is granted and she is entitled to the costs and disbursements of the trial.”
The Rules relied on:
Rule 15-1 (15 to 17) – for offers less than $100,000.
The Case Law:
Johal v. Radek, 2016 BCSC 1170
Hartshorne v. Hartshorne, 2011 BCCA 29
(A.E. v. D.W.J. 2009 BCSC 505 CanLII, 91 BCLR (4th) 372 citing
MacKenzie v. Brooks, 1999 BCCA 623
Skidmore v. Blackmore, 1995 CanLII 1537 (BC CA)
Radke v. Parry, 2008 BCSC 1397
Houweling Nurseries Ltd. v. Fisons Western Corp. 1988 CanLII 186 (BC CA)
Bedwell v. McGill, 2008 BCCA 526, 86 BCLR (4th) 343
Catalyst Paper Corporation v. Companhia de Navegacao Norsul, 2009 BCCA 16, 88 BCLR (4th) 17
Evans v. Jensen, 2011 BCCA 279
C.P. v. RBC Life Insurance Company, 2015 BCCA 30
Bailey v. Jane, 2008 BCSC 1372
Arnold v. Cartwright Estates, 2008 BCSC 1575
Smith v. Tedford, 2010 BCCA 302
Mazur v. Lucas, 2011 BCSC 1685
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