This recent costs hearing referenced as Godbout v Notter, 2019 BCSC 1481 (CanLII) is an example of when an insurance company allegedly takes advantage of the difficult financial circumstance of the Plaintiff by refusing to make or accept a reasonable offer, the strategy being that the difficult circumstance the Plaintiff is in will force them to accept a low-ball offer.
This theory is made on the basis that the Defendant’s counter-offer of $100,000. was far less than the formal offer of the Plaintiff of $300,000, and far less than the actual trial award of over $583,000.
The Court states:
The Plaintiff “was forced to live on savings and the generosity of his life partner and was in a very difficult financial position as of January 2017. Considering the financial circumstances of the plaintiff, those of the defendant’s insurer and the risks of trial, it is reasonable to assume that the defendant was hopeful Mr. Godbout would accept considerably less than what could have been expected as an award at trial due to his financial circumstances.”
A formal offer was made by the Plaintiff in this case of $300,000., which was far less than a previous offer of $561,000 made at mediation. The Court concluded that the reduced formal offer was not a sign that the Plaintiff’s case was weak, but rather due to the fact that the Plaintiff was suffering from PTSD and anxiety, a “serious” attempt was being made by the Plaintiff to resolve this litigation:
Based upon the evidence which would have been available to both parties by January 2017, including examination for discovery transcripts, witness statements and the expert reports which had been exchanged by that time and having heard or seen the evidence at trial, the reduction in the plaintiff’s offer was not likely due to weaknesses in the plaintiff’s case. It is more likely that the formal offer represented a serious attempt to resolve the action before trial and to finalize the uncertainty of proceeding with a client who was experiencing PTSD and anxiety and would benefit from closure of the litigation.
The Plaintiff’s formal offer of $300,000 was rejected by the Defendant, and a counter-offer in the sum of $100,000 was made. This offer was rejected by the Plaintiff.
The matter proceeded to trial with two counsel, Mr. Luke Zacharias and Ms. Brittany Corwin, resulting in the following award:
|Non-Pecuniary Damages||157,500 (175,000 less 10% for failure to mitigate)|
|Past Wage Loss||100,000|
|Future Lost Earnings||275,000|
|Future Care Costs||25,000|
|Loss of Housekeeping Capacity||15,000|
We have written an article regarding this trial decision referenced as: Liability Analysis – “Common Sense is the Best Approach”
The Court reviewed the facts of this case and determined that the formal offer of $300,000 was a reasonable offer and within an appropriate range and should have therefore been accepted by the Defendant. As a result, the Court ordered double costs to the Plaintiff.
- The trial was originally scheduled on February 3, 2017 and adjourned due to the unavailability of a trial Judge;
- The matter was reset to July 31, 2017;
- Quantum and liability were the key issues at trial.
- The Defendant was seriously injured at work and was not able to attend the July 31, 2017 trial.
- The matter proceeded to trial on July 31, 2017 on the issue of quantum only;
- The issue of liability was scheduled to proceed in December 2017.
- The Court noted that the Agreed Statement of facts disclosed that the defendant had lost control of his vehicle prior to the accident and that he left his vehicle sitting diagonally on the inside lane of Highway 1 where it was struck by the plaintiff’s tractor / trailer or semi-unit. The defendant’s vehicle was black, there was very little if any light at the time of the accident and the defendant also admitted he did not leave any lights on after abandoning his vehicle prior to the accident.
- Relevant rules: Rule 9-1 (4), (5); and R. 9(6) – Offers to Settle
- The key decision referenced on the topic of double costs is Hartshorne v. Hartshorne, 2011 BCCA 29 at paras. 25 and 27.
In assessing the facts of this case, the Court was of the opinion that the Defendant’s offer of $100,000 was not a reasonable offer that fell within a reasonable range:
“the defence’s response of a counter-offer of $100,000 did not reflect “a careful assessment of the strength or lack thereof of their cases…throughout the course of the litigation” (see Hartshorne at para. 25 citing Catalyst Paper Corp. v. Companhia de Navegaçao Norsul, 2009 BCCA 16 at para.16).”
The Court further stated:
“the defendant’s counter-offer reflects more of a “nuisance” offer as opposed to an honest assessment of the risk of a much higher judgment.”
I conclude, based upon the circumstances and the considerable law on the issue of double costs, that the offer of $300,000 ought reasonably to have been accepted by the defendant in or about January 2017 and that the plaintiff is entitled to double costs under R. 9-1.
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