Source: http://bc-injury-law.com/blog/tag/loser-pays
Timestamp: 2019-04-24 11:02:53+00:00

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I have frequently highlighted BC’s loser pays system where a losing litigant is typically ordered to pay costs to the opposing side. Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, demonstrating that this result can be harsh and is typically unyielding to factors such as sympathy and financial hardship.
 The plaintiff says that the defendants should be denied their costs on the basis that his life was permanently and catastrophically altered by the event of January 21, 2006 and his future care and financial support are now in jeopardy. Mr. Laktin argues that the costs of a five-week trial will impose an onerous financial burden, which the plaintiff lacks the means to satisfy. I accept that Mr. Laktin is in difficult financial circumstances, and that an order requiring him to pay costs to the defendant will be a real and heavy burden for him. While I have a great deal of sympathy for the plaintiff, the case law clearly establishes that the unfortunate personal circumstances and financial hardship of a litigant are not, standing alone, factors warranting a departure from the general rule that costs follow the event: Morris at para. 36; Chen at para. 11;Vesuna v. British Columbia (Transportation), 2011 BCSC 1618 at para. 8.
 In Robinson v. Lakner (1998), 159 D.L.R. (4th) 191, the Court of Appeal, reversing the decision of the trial judge who had limited the costs payable to the successful defendant to $1,500 because the plaintiff was in difficult financial circumstances, held at para. 5, that “financial hardship in itself is not a sound basis for departing from the usual rule with respect to costs”.
 In Cowherd v. Fraser Valley Health Region et al, 2004 BCSC 698 at para. 5, Madam Justice Ballance cited Brown v. Blacktop Cabs Ltd. (1997), 43 B.C.L.R. (3d) 76 (C.A.); Zelenski Estate v. Fairway(1998), 60 B.C.L.R. (3d) 76 (C.A.); Churchland v. Gore Mutual Insurance Co. (unreported), September 23, 1999, No. S09912, Vancouver (S.C.); and Robinson for the principle that “in general, the unfortunate personal circumstances and characteristics of a litigant are not to be taken into account by the court in exercising its discretion in making an award of costs”.
 In Morris at para. 38, Madam Justice Ker concluded that the court is unable, on any principled basis to take the plaintiff’s financial circumstances into account in determining whether to award costs.
 To conclude otherwise would undermine the rationale underlying Rule 14-9 and would likely lead to the promotion of litigation rather than to promote the “winnowing” function described by Hall J.A. in Catalyst Paper. It would lead to a collapse of the general principle discussed in the authorities and result in the unacceptable proposition that costs in each case would be measured not by a party’s success but by the personal financial circumstances of the litigants.
 I conclude that there are no special circumstances in this case that would warrant a departure from the general rule that costs should follow the event.
 Accordingly, the defendant, City of Vancouver, will have costs of this action at Scale B, together with its reasonable disbursements.
A short but interesting exchange can be found at the end of reasons for judgement recently published by the BC Supreme Court, Chilliwack Registry, discussing loser pays costs and a Plaintiff’s financial circumstances.
 MR. KENT-SNOWSELL: Costs, My Lord?
 THE COURT: I am not going to order costs because of Ms. Hunstad’s financial situation. If you want to make some submissions on that, I will consider it, but I don’t think they are appropriate in the circumstances.
 MR. KENT-SNOWSELL: I will seek instructions.
Earlier this year I highlighted a judgement addressing whether a litigant blogging about witnesses during the course of a trial, and referenceing ‘fat bottomed girls’ in the process, amounted to witness intimidation.
Reasons for judgement were released today (Mainstream Canada v. Staniford) by the BC Supreme Court, Vancouver Registry, dealing with the costs consequences following the underlying trial.
 . . . During the trial, Mr. Staniford relaunched the GAAIA website, this time using a service provider outside of Canada. During his cross-examination, Mr. Staniford proclaimed that he would not be stopped by an injunction pronounced in this action.
 Shortly before the trial, and after the witness lists had been exchanged, Mr. Staniford accused the Ahousaht First Nation of accepting “blood money” from Cermaq in one of his Facebook postings.
 Mr. Staniford looked on the trial as an opportunity to get his message out, and he did not hold back. For example, in Internet postings during the trial, Mr. Staniford demeaned and mocked the physical appearance of three of Mainstream’s witnesses, Mary Ellen Walling, Leanne Brunt and Dr. Gallo. Mr. Wotherspoon brought the comments concerning Ms. Walling and Ms. Brunt to my attention when court was convened the morning of January 26, 2012. The matter was discussed in court and was framed (appropriately) as an issue of Mr. Staniford victimizing Mainstream’s witnesses by his insulting comments. Mr. Staniford was present during the discussion. Despite that, Mr. Staniford then repeated his comments about Ms. Walling and Ms. Brunt outside court for an interview that was published on YouTube.
 During his testimony, Mr. Staniford attempted to justify his comments about Ms. Walling and Ms. Brunt as being “very complimentary,” and said he thought Ms. Walling should be “flattered” at being labelled a “fat-bottomed girl.” The notion that Mr. Staniford would ever pay a sincere compliment to Ms. Walling is, itself, laughable and entirely unbelievable.
 In another Facebook posting during the first week of the trial, he compared the trial to a kangaroo court….
 By engaging in the conduct I described, Mr. Staniford demonstrated his disrespect for witnesses and his disdain generally for the court and the judicial process.
 Although I consider Mr. Staniford’s misconduct in connection with the trial to be serious and clearly deserving of censure, I think that depriving the defendants of all of their costs of the action is too severe, given the dollar amounts likely involved for a 20-day trial. I have concluded that an appropriate order is that the defendants have 25% of their assessed costs and disbursements. (There should be only one set of costs for both defendants.) Depriving the defendants of 75% of their assessed costs and disbursements, in my view, reflects appropriate condemnation of Mr. Staniford’s misconduct.
I’ve written many times about the BC Supreme Court’s “loser pays” system which generally requires a losing litigant to pay for the winner’s costs and disbursements. If a lawsuit is started on a child’s behalf and on reaching adulthood they take over the claim themselves can the former litigation guardian still be exposed to loser pays costs consequences? The answer is yes as was demonstrated in reasons for judgement released this week by the BC Supreme Court, Vancouver Registry.
 Although Bird J.A.’s comments on the liability of litigation guardians for costs in Miller were dicta, they were considered dicta. Bird J.A. concluded that an infant ratifying the action after attaining the age of majority does not inherit and replace the litigation guardian’s liability for costs. I have seen nothing in the authorities that lends support to the position that a defendant’s possible entitlement to costs from a litigation guardian disappears when the infant reaches majority. I expect that subsequent to Miller, litigation guardians starting actions (and filing affidavits at the time) understood their potential liability for costs and the fact that it continued at least up to the infant’s majority. Rule 20-2(12) and (13) do not suggest that the filing an affidavit upon attaining the age of majority removes any possible past liability of the litigation guardian for costs.
 While it is true that a possible adverse costs order may deter a person from suing as a litigation guardian, there are also policy reasons that support awarding costs in favour of successful defendants. In any event, I think the underlying law has been clear for more the 50 years that a litigation guardian assumes potential liability for costs if he or she starts an action as a litigation guardian and is not successful.
 Accordingly, my conclusion is that Shawne McIlvenna, the plaintiff’s former litigation guardian, is responsible for the costs that I have already ordered, up to February 27, 2009, when the plaintiff filed his affidavit of majority. ..
As previously discussed, a Plaintiff’s financial circumstances is not relevant when assessing “loser pays” costs consequences following trial in the BC Supreme Court (subject to the different analysis that applies when pre-trial formal settlement offers have been made). Reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, demonstrating this.
 The third basis for his application is that he is unemployed and experiencing difficult financial circumstances.
 While no evidence is before the Court to establish precisely what his present situation is, I will accept that it is not good. I have genuine sympathy for this plaintiff. I am sure that the requirement to pay costs to the defendant will be a real burden for him in his circumstances.
 Indeed, I expect that it is frequently the case that there are substantial discrepancies between the means of parties to litigation. Unsuccessful litigants are not infrequently in difficult financial straits, and orders for costs can exacerbate that situation.
 However, I am unable to conclude that an order requiring him to pay the defendant’s costs, in accordance with the relevant tariff, $11,000, would be so “unfair and inappropriately punitive” to make the order sought. There are no special circumstances in this case which warrant an order for reduced costs or relieving the plaintiff from paying the defendant’s costs.
Tags: Loser pays, Mr. Justice Williams, RUle 14, Rule 14-1, Rule 14-1(9), Staley v. Squirrel Systems of Canada Ltd.
As previously discussed, Section 10 of BC’s Workers Compensation Act operates to generally strip you of your right to sue if you are injured in the course of your employment by someone else in the course of their employment. If this defence is raised and succeeds in a personal injury lawsuit the claim will be dismissed exposing a Plaintiff to ‘loser pays’ costs consequences. Reasons for judgement were released this week by the BC Supreme Court, Victoria Registry, demonstrating this reality.
In this week’s case (McKay v. Marx) the Plaintiff was injured in a 2005 collision. His vehicle was rear-ended by a Fed Ex vehicle. The Plaintiff sued for damages. There was no dispute that the Defendant was in the course of employment when the crash happened. The defendant argued that the plaintiff was also a ‘worker’ and therefore his right to sue was stripped away. The issue was sent to WCAT for determination who ruled that the Plaintiff was indeed a worker.
 The circumstances in which the plaintiff found himself are unfortunate and they garner some sympathy. However, the authorities explicitly prohibit this court from denying costs by exercising discretion out of a sense of fairness or sympathy or a comparison of the relative economic strength of the parties.
 In summary, the defendants successfully pled a s. 10 Workers Compensation Act defence and are thus the substantially successful party ?? the winner of the event. The evidence as presented falls short of demonstrating such reprehensible conduct on the part of the defendants that would allow the court, in the exercise of its discretion, to depart from the general rule. Accordingly, the defendants are entitled to costs.
Section 3 of BC’s Negligence Act reduces a Plaintiff’s entitlement to costs recovery to the same proportion as a Plaintiff’s degree of fault following a collision. Reasons for judgement were released last month by the BC Supreme Court, Vancouver Registry, addressing the factors a Court can consider in deviating from this typical result and further finding that pre-trial borrowing is irrelevant to the Court’s analysis.
In last month’s case (Gowler v. Ngo) the Plaintiff was injured in two motor vehicle collisions. Following a 13 day trial a Jury found the Plaintiff 50% at fault for the first of the collisions. Damages of $250,000 were assessed and these were cut in half to take the Plaintiff’s degree of fault into consideration. The Plaintiff’s costs for proceeding to trial were over $100,000. Neither party beat their pre-trial settlement offer leaving the Court to apply section 3 of the Negligence Act.
 The factors to take into account in considering the court’s discretion are discussed in my decision in Moses v. Kim, 2007 BCSC 1820. I will talk about the Court of Appeal decision in a moment, but I will ask that the reasons for judgment, if they are reproduced, will now include paragraph 13 of the Moses v. Kim decision.
 In my view, in this case the most important factors are the costs of proving damages for an injury of this type, the fact that there is a very significant claim for disbursements, and the fact that the amount of the award is $125,000 and the costs claimed are about $104,000.
 Mr. Mussio asked me to take into account some borrowing that Mr. Gowler did prior to the trial. In my view, that is not a factor I can take into account, nor can I take into account the legal fees, based on the decision of the Court of Appeal in the Moses v. Kim case.
 Looking at all the applicable factors, in my view it would be unjust to award the plaintiff only 50 percent of his costs. That is because his award would be so diluted by the need to pay his disbursements that he would not have a sufficient recovery. However, it is not a case where Mr. Gowler’s damages were so significant as in the Moses case.
 Looking at the cases and all the applicable factors, in my view, the appropriate award is that the plaintiff should recover 65 percent of his costs.
Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, confirming that Third Party’s are not immune from BC’s ‘loser pays’ system.
 The first issue is whether Lombard should be held liable to the plaintiff Ms. Danicek for the costs of the trial.
The third party, on its own application became a party to and actively defended the action, and by so doing made itself subject to the jurisdiction of this court as to costs. I see no reason why the plaintiff should not have judgment against the third party as well as against the defendants, for its costs computed in the manner aforesaid.
 The purpose of an award of costs is to indemnify successful litigants; deter frivolous proceedings and defences; encourage parties to deliver reasonable offers to settle; and discourage improper or unnecessary steps in litigation: see Skidmore v. Blackmore (1995), 122 D.L.R (4th) 330, at para. 37.
 My conclusion is that the plaintiff is entitled to her costs in respect to Phase 1 of the trial against Lombard. It was Lombard that decided to contest liability and quantum. Ms. Danicek’s position was upheld on each of these issues. Quantum far exceeded the settlements she had reached with Mr. Poole, Alexander Holburn and the other third parties.
 Lombard was not, ultimately, liable for the judgment against Mr. Poole. This was because of the conclusion reached in the second phase of the trial that the Lombard policy did not provide coverage. But that was not the issue in Phase 1 of the trial. (There was evidence relevant to the coverage issue adduced at trial. That is because witnesses were called at the first phase who had evidence to give in respect to the second phase.) The issues decided in Phase 1 were liability of Mr. Poole and quantum of damages.
 In my view having in mind the principle of an award of costs, costs should be awarded against Lombard in respect of Phase 1 from the time that it filed a statement of defence. The plaintiff was substantially successful on the issues involving Lombard in that part of the trial.
If a BC Supreme Court Judgement is silent with respect to costs following trial the default Loser Pays system kicks in as a result of Rule 14-1(9). Reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, discussing this default position.
 The plaintiff’s res judicata argument has previously been considered and rejected by this court. In Graham v. Great West Life et al., 2004 BCSC 1544, Sinclair Prowse J. considered the argument that silence in earlier reasons for judgment regarding costs is tantamount to an order that there will not be an order for costs. After reviewing the authorities she found that if reasons are silent, by operation of Rule 57(9), there is a presumption that costs will follow the event unless either party objects to the order being framed in that manner, in which case an application for costs should be made to the court. The present Rule 14-1(9) contains the same presumption.

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