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Beating an Offer to Settle: 5 Principles for Double Costs


In awarding this personal injury claimant double costs for beating the pre-trial offer of settlement, the Supreme Court has articulated 5 key principles to consider if you beat an offer to settle.
The defendant insurer State Farm cancelled a mediation because their view was that mediation to settle the car accident claim had little chance of success. The insurance company delivered a formal offer to settle of $30,000 plus taxable costs and disbursements and the potential obligation to make payment to the Ministry for the claim under the Health Care Costs Recovery Act, S.B.C. 2008, c. 27. The claimant delivered a formal offer to settle for $130,000 plus court order interest, costs at scale B and disbursements. State Farm increased their offer to $50,000 but rejected the offer of the claimant.

After a 7 day trial the judge awarded the injury claimant $343,487.97.  The car accident caused neck and upper back injuries and worsening a substance abuse disorder.

The claimant beat his offer and State Farm should have accepted the pre-trial offer of $130,000.  In awarding the claimant double legal costs Supreme Court Judge Kelleher summarized five important principle when considering a formal offer to settle:

1.    An award of double costs is a punitive measure against a litigant for that party’s failure, in all the circumstances, to have accepted an offer to settle that should have been accepted.

2.    There is no requirement that an offer to settle be made within a specific time from the start of trial.

3.    An offer open for two days has been held to be a reasonable opportunity to consider the offer.

4.    The court should be reticent to conclude an offer is ambiguous when the issue is only raised by the recipient after the trial and in the face of an application for costs sanction.

5.    The court may consider whether the defence is conducted by an insurer that is well able to assess the risks of proceeding to trial and would know that proceeding to trial could expose them to an award of double costs (Vine v. Taylor,2018 BCSC 1025 at para 16 )

Best to consult a lawyer before sending or responding to a formal offer of settlement. Posted by Personal Injury Lawyer Mr. Renn A. Holness, B.A. LL.B.

Tags: Double Costs, Rule 9-1 Offers to Settle, Rule 9-1(6)(b) Offers to Settle Amounts, Substance Abuse Disorder

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