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Double Costs No Longer a Threat if a Plaintiff Fails to Beat a Defendant's Offer at Trial

The BC Court of Appeal's recent decision of C.P. v. RBC Life Insurance Company, 2015 BCCA 30, has put an end to the risk of 'double costs' being awarded to a defendant, such as ICBC, when a plaintiff fails to beat the defendant's offer at trial.

In a unanimous decision of the Court, it was determined that it is not open to a trial judge to award a defendant double costs where a plaintiff obtains judgment. To make that statutory remedy available in those circumstances would be contrary to the legislative intent and unfairly punish plaintiff. Writing for the Court, the Honourable Mr. Justice Goepel stated:

[91] .... A plaintiff who obtains a judgment for less than an offer to settle is already subject to sanctions: R. 9-1(6)(a) allows the court to deprive the successful plaintiff of costs to which it would otherwise be entitled. Rule 9-1(5)(d) provides an even more punishing outcome as the plaintiff is not only deprived of costs he or she would otherwise receive, but must also pay the defendant's costs subsequent to the offer to settle. To also allow a defendant double costs would skew the procedure in favour of defendants and unfairly penalize and pressure plaintiffs. I would adopt in that regard the comments of Madam Justice Adair in Currie:

[18] I think it certainly can be argued that if a defendant who has made an offer to settle in an amount higher than the amount awarded to the plaintiff at trial (and that is what has been done in this case) was then awarded double costs, this would skew the procedure in favour of defendants and unfairly penalize and pressure plaintiffs. This is because a plaintiff who rejected an offer to settle would potentially risk a triple cost penalty if he or she were to win at trial an amount less than the offer. The plaintiff would suffer loss of the costs that he or she would normally receive on obtaining judgment at trial, and face double costs payable to the defendant.

[19] In my view, there is a good reason to apply Rule 9-1 in a way that is even-handed, or more even-handed, as between plaintiffs and defendants. I would say for this reason one would expect to see double costs awarded to a defendant, using the offer to settle procedure, in exceptional circumstances only, such as a situation where the plaintiff's claim was dismissed all together after a plaintiff rejected an offer to settle.

[92] In the result, I find that it was not open for the trial judge to award double costs to the defendant. It was an error in principle to do so.

This decision will inevitably change the risk analysis to plaintiffs in cases where the defendant has admitted liability. Although there remain potential cost consequences if a plaintiff fails to consider reasonable offers made by the defendant, they are now less onerous and commensurate with that of the defendant.

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