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An All Inclusive Offer to Settle Can Now Attract Double Costs


In this offer to settle a personal injury case Judge Funt has done away with the old rule against all-inclusive offers to settle. That is to say the Judge entertained an $250,000 all-inclusive  pre-trial offer of the defendant when awarding double costs to the defendant, changing the law and overturning our Court of Appeal in Helm v. Pattie(1998), 52 B.C.L.R. (3d) 81.  an “all-inclusive offer” is one that includes compensation for legal fees and disbursements without separating those amounts for the offeree.
The claimant was seated in the back row of an aircraft as it landed in Cancun, Mexico, on its flight from Vancouver, Canada.  As the aircraft touched down and then braked, an unsecured food cart smashed into the back of the claimant’s seat causing the claimant personal injuries.
The severity of the  injuries was a big issue at trial and the Claimant sought a court award of  $1,140,000.  She was however awarded approximately $110,000 and 5 days before the trial the defendant made a $250,000 all-inclusive offer to settle.  The claimant did not accept the offer.
The only rationale the judge provided for changing the common approach to all inclusive offers was as follow:

“The present Rules of Court provide greater discretion to the Court and avoid the formulaic approach reflected in the older rules…The plaintiff did not provide a bill of costs and disbursements…Absent a bill of costs, the defendant’s further all-inclusive offer of $250,000 is understandable.  Most litigants seeking to resolve a dispute prefer finality…”

 This is profound change in the law will likely create much uncertainty within the legal community until this case is appealed or the Court of Appeal addresses directly Helm v. Pattie (1998), 52 B.C.L.R. (3d) 81. It might be unfair, for example,  for the court to expect claimants to produce a Bill of Costs in the week before trial just because an offer is made. This would require disclosure of privileged information before the trial of a matter.
Furthermore, the judge went on to award double costs against the claimant and failed to consider or mention in his decision the leading cases on the matter: Gulbrandsen v. Mohr,2013 BCSC 1481A.E. v. D.W.J., 2009 BCSC 505, Evans v. Jensen, 2011 BCCA 279, Ward v. Klaus,2011 BCSC 99, and Currie v. McKinnon, 2012 BCSC 1165.  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 claimant at trial was then awarded double costs, this would skew the procedure in favour of defendants and unfairly penalize the claimant 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.
For these reasons I’m taking a cautionary approach to the application of this case until it is further appealed or considered by the court.
Posted by Personal Injury Lawyer Mr. Renn A. Holness, B.A. LL.B.
 
 
 

Tags: Costs, Double Costs, Legal Fees, New Civil Court Rules, offer to settle, Rule 9-1 Offers to Settle, settlement offer

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"Renn A. Holness is a gifted lawyer and author to over 1000 legal blog articles. Married father of two daughters, son of a neurosurgeon and founder of Holness Law Group."

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