In British Columbia, the usual rule is that the successful party in a lawsuit is entitled to “costs” from the unsuccessful party. These costs do not usually cover all of the successful party’s legal expense, but cover a portion of it. The court has discretion over whether to award costs.
The Supreme Court Civil Rules allow a judge to consider offers to settle when making costs orders. The offers to settle must never be put before the court before the judge makes a decision on the substantive issues. But once the judge has made a decision, the parties may show the judge any offers to settle made in accordance with the rules.
The judge can take offers into consideration on costs in a number of ways. If the plaintiff has been successful at trial, but could have received as good or a better result if the plaintiff had accepted the defendant’s offer, the court may deprive the successful plaintiff of costs in respect of those steps in the lawsuit taken after the offer. If the claim is dismissed, the court may award the defendant double costs in respect of those steps taken after the offer. On the other hand, if the plaintiff makes and offer, and enjoys greater success than she would have if the defendant had accepted the offer, the court may award the plaintiff double costs from the time she made the offer.
The rules respecting offers to settle have been amended a few times over the last decade. At times they have been rigid.
The current Rule 9-1 is quite flexible. Rule 9-1 (5) and (6) provide as follows:
Cost optionsIn order to for the court to consider an offer to settle when awarding costs, the offer must be in writing, delivered to all of the other parties of record, and the offer must say that the party making the offer “reserves the right to bring this offer to the attention of the court for consideration in relation to costs after the court has pronounced judgment on all other issues in this proceeding."
(5) In a proceeding in which an offer to settle has been made, the court may do one or more of the following:
(a) deprive a party of any or all of the costs, including any or all of the disbursements, to which the party would otherwise be entitled in respect of all or some of the steps taken in the proceeding after the date of delivery or service of the offer to settle;
(b) award double costs of all or some of the steps taken in the proceeding after the date of delivery or service of the offer to settle;
(c) award to a party, in respect of all or some of the steps taken in the proceeding after the date of delivery or service of the offer to settle, costs to which the party would have been entitled had the offer not been made;
(d) if the offer was made by a defendant and the judgment awarded to the plaintiff was no greater than the amount of the offer to settle, award to the defendant the defendant's costs in respect of all or some of the steps taken in the proceeding after the date of delivery or service of the offer to settle.
[am. B.C. Reg. 119/2010, Sch. A, s. 21.]
Considerations of court
(6) In making an order under subrule (5), the court may consider the following:
(a) whether the offer to settle was one that ought reasonably to have been accepted, either on the date that the offer to settle was delivered or served or on any later date;
(b) the relationship between the terms of settlement offered and the final judgment of the court;
(c) the relative financial circumstances of the parties;
(d) any other factor the court considers appropriate.