ICBC Hit with Double Costs After Refusing Reasonable Offer to Settle

In Risling v. Riches-Glazema, 2017 BCSC 252, Ms. R was involved in a car accident and was awarded $622,500 at trial in Supreme Court. Prior to the trial, her counsel hade made an offer to settle with ICBC for $315,000 plus costs and disbursements under Supreme Court Rule 9-1. At a hearing for costs, she sought double her costs from the date of the offer for ICBC refusing to accept their offer.

When an offer to settle is made under Supreme Court Civil Rule 9-1 and not accepted by the other party, the offering party can ask for double costs at the end of trial:

 Rule 9-1(5)(b):

Cost options

(5)In a proceeding in which an offer to settle has been made, the court may do one or more of the following:

(b) award double costs of all or some of the steps taken in the proceeding after the date of delivery or service of the offer to settle;

In making a cost award under this rule, the court may consider the following factors set out in rule 9-1(6):

Considerations of court

(6)In making an order under subrule (5), the court may consider the following:

(a) whether the offer to settle was one that ought reasonably to have been accepted, either on the date that the offer to settle was delivered or served or on any later date;

(b) the relationship between the terms of settlement offered and the final judgment of the court;

(c) the relative financial circumstances of the parties;

(d) any other factor the court considers appropriate.

The question at this hearing was weather Ms. R’s offer to settle should have reasonably been accepted. Counsel for ICBC argued that due to their limited understanding of the case they were unable to fully quantify the value of the claim. Additionally, they argued that there were no reasons in the offer itself to justify the amount sought in the offer.

In assessing whether an offer should have reasonably been accepted, the court applies the factors set out in Hartshorne v. Hartshorne, 2011 BCCA 29, which include: the timing of the offer, whether it had some relationship to the claim (as opposed to simply being a “nuisance offer”), whether it could be easily evaluated, and whether some rationale for the offer was provided. The reasonableness must be assessed without reference to the courts decision.

In determining whether the offer should have been accepted, Mr. Justice Affleck found that the plaintiff’s case was well known to the defendants when the offer was made. Two discoveries had been completed and the plaintiff had attended 2 independent medical exams at the defendant’s request.  Additionally, he found that the offer had a description of the heads of damages that the plaintiff was intending to seek at trial.

Mr. Justice Affleck considered the financial circumstances of the parties and reaffirmed the BC Court of Appeal’s ruling in Smith v. Tedford, 2010 BCCA 302 where Mr. Justice Lowry stated that in considering the financial means of both parties, ICBC possesses greater financial ability to defend an action that an injured plaintiff has to prosecute the action

Ultimately he held that the plaintiff was entitled to costs of the action, including double costs from the date of the offer.

 

 

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