Late Disclosure at Trial results in award of Special Costs against ICBC.

The goodfirm ICBC personal injury lawyers want to draw attention to a recent personal injury case in which ICBC was ordered to pay special cost for failing obey a court order to disclose the existence of surveillance footage.

In Norris v. Burgess, 2016 BCSC 1451 (CanLII), a plaintiff was injured in a motorcycle accident. After a successful jury trial was awarded $462,374 in damages for her injuries, less than the $678,50
0 that ICBC had offered to settle for prior to trial. Leading up to trial, ICBC was ordered by the court to disclose any surveillance video in their possession. Despite the court order, ICBC withheld surveillance footage in that substantiated the plaintiff’s injury claim.

The plaintiff sought costs and special costs. ICBC sought their costs and special costs on the basis that the plaintiff had rejected the larger offer to settle. Normally any party may make a without prejudice offer to settle a case at any time and usually there are no consequences for failing to accept such an offer. However, formal offers to settle made under Supreme Court Civil Rule 9-1 are slightly different in that a party who does not accept the offer may be subject to cost consequences at the conclusion of trial. The purpose of the rule is to give additional incentive to a party to settle for a reasonable amount in the face of such consequences.

In determining the award of costs Mr. Justice Funt for the BC Supreme Court, affirmed BC Court of Appeal in C.P. v. RBC Life Insurance Company, 2015 BCCA 30 (CanLII) for the principle that the purpose of the cost rules is to encourage the early settlement of disputes by rewarding the party who makes a reasonable settlement offer and penalizing the party who declines to accept. Mr. Justice Funt stated at paragraph 42,

“[42] The use of the word “ought” in R. 9-6(1)(a) evinces a legislative intent that the court may consider whether the offer was one that the offeree should have accepted. Where the offeror is the plaintiff, this wording encourages an offer that falls at the low end of the range of potential trial awards the plaintiff is anticipating. Where the offeror is the defendant, it encourages an offer that falls at the high end of the range of potential trial awards the defendant is anticipating. In short, the word “ought” brings the respective positions of the parties closer, with the object of reaching an agreement and conserving judicial and other resources.”

Mr. Justice Funt disregarded ICBC’s offer to settle on the basis that the disclosure of the footage undermined the settlement process. He found that without the disclosure a plaintiff’s counsel cant properly asses the reasonableness of a settlement offer. At para 56, he stated,

[56] The Court cannot say with certainty what would have occurred had ICBC disclosed the 2015 Video in a timely manner. However, with timely disclosure, Mr. Miller would have known of this further significant evidence well before trial. The Court can say with certainty that without knowing all of the evidence that a client has, counsel cannot properly assess the client’s case and provide fulsome legal advice, including the appropriate quantum for a settlement offer.”

After disregarding the settlement offer in determining costs, Mr. Justice Funt considered the applicability of special costs, affirming the test from the Court of Appeal in Gichiru v. Smith, 2014 BCCA 414. Special costs are awarded for conduct that is reprehensible, a standard that includes milder forms of misconduct deserving of rebuke. Mr. Justice Funt found that ICBC showed a casual disregard towards the court by refusing to obey the court ordered disclosure which affected the “efficient administration of justice”. Mr. Justice Funt further rejected ICBC’s explanation that the adjusters are often overworked and prone to mistakes noting that ICBC has the responsibility to make sure mistakes are not made.

Mr. Justice Funt found that the presence of a jury justified the courts rebuke in that as witnesses the late disclosure affected the reputation of the court and the perception of the administration of justice. He ordered ICBC to pay special costs in the amount of $155, 340.86 as well as reasonable and necessary disbursements.

 

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