Insurance law – Costs – Special or increased costs – Double costs – Practice – Settlement of action – Formation and validity
Park v. Donnelly,  B.C.J. No. 260, 2018 BCSC 219, British Columbia Supreme Court, February 15, 2018, P.G. Voith J.
Prior to trial on a motor vehicle accident claim, the third party insurer made a formal offer to settle for “$430,000 old money” plus reasonable costs and disbursements. The settlement offer stated that the $430,000 was “after taking into account” no-fault benefits paid or payable and any advances paid to date. The plaintiff rejected the offer. Following trial, the plaintiff was awarded $402,017.80. After deductions for no-fault benefits and advances paid, the insurer’s offer exceeded the plaintiff’s award by approximately $8,000. The insurer applied for double costs.
The application raised questions of principle and practice. As a matter of principle, the Court noted that the material terms of any offer are required to be clear and unambiguous. The court found the offer to be ambiguous for three reasons. First, the phrase “after taking into account” had previously been interpreted in the same context to mean “no more and no less” than the settlement offer, rather than some net amount after deductions. Second, the offer relied on the phrase “old money”. The Court noted that the phrase was a colloquialism absent any objective meaning in legislation or case law. Third, there was a significant amount of confusion regarding what specific amounts had been paid to the plaintiff as no fault benefits or advances such that the net value of the offer was unclear.
As a matter of practice, the Court stated that cost applications should not, in most instances, require the Court to engage in a further fact-finding exercise or to engage in resolving additional questions or principle. Instead, clear and unambiguous offers to settle will, of necessity, simplify costs applications. In the context where no fault benefits paid or to be paid are considered in an offer, the Court endorsed two approaches: the defendant party can tell the plaintiff exactly what net amount they will receive; or, alternatively, the defendant should set out the precise amount already paid before making a further offer. Finally, the Court noted that expressions “old money” and “new money” are unhelpful.
This case was digested by Michael J. Robinson, and first published in the LexisNexis® Harper Grey Administrative Law Netletter and the Harper Grey Administrative Law Newsletter. If you would like to discuss this case further, please contact Michael J. Robinson at firstname.lastname@example.org.