Offers to Settle and Costs

12 mai 2014 | Eric Sherkin

( Disponible en anglais seulement )

The recent decision of Mayer v. 1474479 Ontario Inc. relates to a personal injury claim arising from a motor vehicle accident, but has some interesting tidbits relating to the general principles of proportionality as it relates to the determination of cost awards at the conclusion of trial. It also reminds counsel about the intricacies of crafting offers to settle.

Without delving too deep into the facts of the case, the claim involved a motor vehicle accident about which liability was admitted by the defendants. The resulting jury trial was essentially focused on the question of the plaintiffs’ damages. The original statement of claim sought a total of $1.1 million in damages. The plaintiffs then sought leave to amend their statement of claim to seek the maximum payout under the applicable insurance policy, which was $2 million. They didn’t seek this leave, however, until eight days after the trial had already started (but before the plaintiff’s evidence was complete), over four years after commencing the claim.  

In the end, the jury awarded the three plaintiffs a combined total of $119,300.

The plaintiffs’ counsel then sought costs of the action of roughly $265,000 plus disbursements of roughly $156,000, over $421,000 in total. 

In the endorsement, Justice Leach notes that « if ‘success’ is defined by recovery of any positive amount, as suggested, then the plaintiffs in the case before me were ‘successful’…to put it mildly, I have great difficulty regarding the outcome as a triumph for the plaintiffs, having regard to their demands and expectations…and the time and resources they apparently have devoted to the matter (as outlined in their bill of costs), all of which were entirely disproportionate to what the case was really worth, as determined by the jury.

Justice Leach noted elsewhere that the trial was of a longer than expected duration because of the plaintiffs and their counsel; that there were multiple experts who were duplicative of each other and did not add value to the proceeding; and generally that the case did not proceed in a manner proportionate to its ultimate worth.

Each side was ultimately ordered to bear its own costs.

With respect to offers to settle, Justice Leach noted that the defendants’ offers failed to either advise whether the offers were global to all defendants or severable from one another, and were « all-inclusive » offers that did not separate interest from damages. To trigger Rule 49 consequences, offers should expressly indicate whether they are severable and should distinguish the amount of principal, interest and costs so as to permit the trier of fact to determine whether the ultimate amount recovered « beat » the amount provided for in the offer to settle.

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