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Formal Offers from ICBC in Personal Injury Litigation

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A Supreme Court decision was released last week which brings home the impact of formal offers during the course of a personal injury matter. Perhaps more importantly, the case also discusses circumstances in which special costs may be ordered against a plaintiff. 

In Tambosso v. Holmes, Ms. Tambosso had sought damages in excess of $2 million for injuries sustained during two accidents. We have previously blogged about this case, as the trial judge relied, at least in part, on Ms. Tambosso's social media postings to determine that her evidence at trial lacked credibility. At the conclusion of a 33 day trial, Ms. Tambosso was awarded only $36,042.30 in damages. In coming to his decision, the trial judge made a number of rather scathing findings with respect to Ms. Tambosso's credibility.

Following trial, ICBC sought to have costs ordered against Ms. Tambosso. Almost two years before to the trial, ICBC had offered to settle both actions by paying Ms. Tambosso a total of $250,000. That offer was not accepted. Prior to trial, Ms. Tambosso had made an offer to settle both of her actions upon payment by ICBC of $785,000. Three weeks into the trial, Ms. Tambosso increased her settlement position and offered to resolve her case upon payment of $2 million from ICBC. Neither of Ms. Tambosso's settlement offers were accepted.

In the ordinary course, the successful party at trial is entitled to his or her costs against the other side. In this matter, Ms. Tambosso sought her costs, arguing that she had succeeded at trial, as she was awarded damages, albeit not what she had sought. The judge did not accept Ms. Tambosso's position, concluding that it was "abundantly clear" that the substantially successful party in the case was the defence. In the result, the judge concluded that ICBC was entitled to its defence costs.

The only question that remained was the scale of costs. The ordinary rule in British Columbia is that a successful litigant is entitled to costs as calculated on a tariff scale set out in our Rules of Court. Based on my experience, should a matter proceed to trial, the tariff scale provides reimbursement of no more than 20% of a litigant's actual out-of-pocket legal expense. In this case, ICBC sought an order of "special costs" against Ms. Tambosso. Special costs are near equivalent to a litigant's actual out-of-pocket legal expenses. It is very unusual for the court to award special costs against the plaintiff in a personal injury litigation. Special costs are generally awarded only in situations where there has been some type of "reprehensible conduct" on the part of a party.

The Tambosso decision is potentially important in personal injury litigation because of the judge's conclusions with respect to Ms. Tambosso's credibility. The trial judge did not accept Ms. Tambosso's evidence with respect to the circumstances of the accident, particularly that the events had triggered her post traumatic stress disorder and other psychological issues. The trial judge was also very critical of Ms. Tambosso's behaviour during the course of the trial, referring to the certain contradictions between her evidence and video surveillance recorded by ICBC, as well as differences in Ms. Tambosso's evidence and her own social medial postings. Further, and perhaps most importantly, the trial judge concluded that Ms. Tambosso had attempted to intimidate a potential witness to prevent her from testifying at the trial. Ultimately, the judge concluded that the actions of Ms. Tambosso at trial and outside the courtroom had "amounted to an ongoing effort to deceive the court which conduct deserves rebuke." In the result, the judge ordered special costs against Ms. Tambosso from the date of commencement of each action.

This is a devastating result for Ms. Tambosso. Based on my own experience with lengthy and complex litigation, it would not surprise me if an assessment of special costs in this case exceeds $400,000. The matter will still need to be addressed before a Registrar of the Court, who will determine the precise amount that is owed to ICBC by way of special costs. Ultimately, if one assumes that special costs could be in the range of $400,000, Ms. Tambosso's decision to not accept the $250,000 offer from ICBC turned into a $650,000 gamble that Ms. Tambosso unfortunately lost. This case, not the just the initial decision but also the decision with respect to costs, highlights the care that must be given by a plaintiff in assessing the strengths and weaknesses of his or her case, particularly in light of formal offers from ICBC that can result in very significant costs consequences should one not "beat" ICBC's former offer at trial.

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