August 4, 2015

Kevin Gourlay

Kevin Gourlay

Reasons today from Mr. Justice Schultes to deal with costs following a trial where the plaintiff was awarded $49,000. The plaintiff had made two formal offers to settle, the first for $45,000 and the second for $30,000, and was seeking double costs.

When considering whether to award a successful plaintiff double costs or deny an unsuccessful plaintiff their costs, the fundamental question is always whether the offer that was beaten was one that ought reasonably to have been accepted. In this case, the learned judge essentially concluded that, because defence counsel believed they had a reasonable opportunity of beating the plaintiff’s offers, they were not offers that ought reasonably to have been accepted:

[31] As the cases that the defendants relied on at trial demonstrate (see para. 74 of the trial reasons for judgment), there is a considerably lower range of non-pecuniary awards for injuries that resolve in a year or less. The highest award put forward by the defendants was $15,000, although the high end of this range may be slightly higher than that. Regardless, it still falls considerably below Ms. Grace’s second offer. It was not unreasonable for the defendants’ counsel to anticipate that he could persuade a court that she fell within that range and to spurn an offer that was roughly double its maximum in pursuit of that objective.
[32] Therefore, I cannot be satisfied that either of Ms. Grace’s formal offers ought reasonably to have been accepted.

Unfortunate decision for the otherwise successful plaintiff but one that should cut both ways; where a plaintiff falls below a defendant’s offer to settle but their counsel is able to show they reasonably anticipated an ability to persuade the court of a higher award, this case should help them avoid the denial of their costs.

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