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Costs Consequences Arising from Unclear Offer to Settle

In Park v. Donnelly, 2018 BCSC 219, the BC Supreme Court confirmed that an offer to settle must be clear and unambiguous for costs to be awarded following trial.

The Plaintiff was injured in a motor vehicle accident and obtained default against the defendant. ICBC was added as a statutory Third Party. The Plaintiff was found to have suffered two separate head injuries as well as injuries to his shoulder, neck and back. Following trial, the BC Supreme Court awarded the Plaintiff global damages in the amount of $402,017.

Eleven days before trial, the Third Party made a formal offer to settle in the amount of $430,000 “old money” plus costs and disbursements. The proposed $430,000 “settlement payment” was offered after “taking into account Part 7 benefits paid or payable” pursuant to the Insurance (Vehicle) Act and after taking into account “any advances paid to date”. The offer was not accepted by the Plaintiff. Following trial, the Third Party applied for an order for costs as of the date of the offer through to the conclusion of trial.

The Plaintiff argued that the offer was ambiguous as it was unclear what, if any, deductions would be made from the $430,000 settlement payment. The Third Party maintained that the offer was for “old money” from which amounts previously paid to the plaintiff would be deducted.

The BC Supreme Court dismissed the Third Party’s application for costs on the basis that the offer to settle was unclear and ambiguous. The court held that the offer was confusing in that the $430,000 offered would be reduced by advances paid and benefits paid or payable, without setting out the amounts of those benefits or advances. Furthermore, the court held that the term “old money” was ambiguous and inaccurate, as the majority of the $430,000 referred to what is known as “new money”. An offer to settle must be clear and unambiguous as the party receiving the offer must be able to determine precisely what is being offered.

Case summary by Amy Coad