18 Jun Costs in Cases Where Liability is Split Between the Plaintiff and the Defendant

In Cornish v. Khunkhun, 2015 BCSC 52, the Plaintiff was awarded damages for injuries suffered in a motor vehicle accident.  Justice Skolrood’s reduced these damages by 50% after finding that both the Defendant and the Plaintiff were equally at fault for the accident.

When the Plaintiff applied to the Court for an order that he be entitled to his full costs (Cornish v. Khunkhun, 2015 BCSC 832), ICBC submitted that the Plaintiff’s recovery of costs be limited to 50%.

Justice Skolrood set out the legal framework regarding costs when liability has been apportioned at paras. 18 and 19:

[18]         Section 3(1) of the Negligence Act, R.S.B.C. 1996, c. 333 addresses the situation in which liability is apportioned between two or more parties:

Unless the court otherwise directs, the liability for costs of the parties to every action is in the same proportion as their respective liability to make good the damage or loss.

[19]         Section 3(1) sets out what might be characterized as the normal or default rule in cases of apportionment of liability, but, as is apparent on the face of the section, the court has the discretion to depart from that rule. Madam Justice Gray provided a very useful summary of the principles informing the court’s discretion under section 3(1) in Moses v. Kim, 2007 BCSC 1820 [Moses (S.C.)], var’d 2009 BCCA 82 [Moses (C.A.)]:

[10] The opening words of s. 3(1) of the Negligence Act give the court discretion to depart from that usual rule. The court has an unqualified discretion to award or refuse costs, even if there has been an apportionment of liability between the parties. However, there must be some reason connected to the case to justify the exercise of discretion to depart from the usual rule: see Peters v. Davidson, [1981] 125 D.L.R. (3d) 753 (B.C.S.C.) aff’d (1982), 41 B.C.L.R. 330 (C.A.).

[11] The principal consideration for the court is whether an injustice will result by following s. 3(1): see Forsyth v. Sikorsky Aircraft Corp. (2002), 100 B.C.L.R. (3d) 66, 2002 BCCA 231.

[12] In Moore v. Dhillon (1993), 85 B.C.L.R. (2d) 69 (C.A.), Taylor J.A. explained how the usual rule, as s. 3(1) of the Negligence Act was then construed, might work well in some circumstances but result in an injustice in others (at para. 13):

While the s. 3 prima facie rule may work well in cases where liability is divided between defendants only, and where there are cross-claims between plaintiff and defendant, there is potential for injustice when the prima facie rule is applied without exercise of discretion in cases, such as this, where division of fault is as between a successful personal injury plaintiff and a defendant who has suffered no injury or damage, or who has already been fully compensated for any injury or damage suffered. This is demonstrated by the Law of Reform Commission of B.C. in its 1993 report entitled ‘Apportionment of Costs and Contributory Negligence: Section 3 of the Negligence Act.’ The prima facie rule would plainly work an injustice in the present case.

[13] The authorities demonstrate many factors the court has considered in exercising this discretion. Among them are the following:

(a) the seriousness of the plaintiff’s injuries;

(b) the difficulties facing the plaintiff in establishing liability;

(c) the fact that in settlement negotiations the amount offered was substantially below the ultimate amount;

(d) whether the plaintiff was forced to go to trial to obtain recovery;

(e) the costs of getting to trial;

(f) the difficulty and length of the trial;

(g) whether the costs recovery available to the plaintiff, if costs are apportioned according to liability, will bear any reasonable relationship to the party’s costs in obtaining the results achieved;

(h) the positions taken by the parties at trial, in particular whether the positions taken were appropriate and reasonable in the circumstances;

(i) whether the defendants made any settlement offers;

(j) the ultimate result of the trial; and

(k) whether the plaintiff achieved substantial success that would be effectively defeated if costs were awarded pursuant to s. 3(1) of the Negligence Act.

After taking into account these factors, Justice Skolrood concluded that it was not unjust to apply the normal costs rule as set out in section 3(1) of the Negligence Act and awarded the plaintiff 50% of his costs.