MRAZ v HERMAN, 2016 ABQB 14
4.29: Costs consequences of formal offer to settle
The Plaintiffs brought a Claim against the Defendants for professional negligence, and the Defendants counterclaimed for fees. The Claim and Counterclaim were both dismissed at Trial. Prior to Trial, the Defendants served the Plaintiffs with a Formal Offer to Settle, in which the Defendants agreed to a Discontinuance of the Claim on a without Costs basis. The parties made submissions regarding Costs after the conclusion of the Trial, where the Defendants submitted that they were entitled to double Costs pursuant to Rule 4.29(2). The Plaintiffs argued that the Defendants’ offer was not a “genuine” Offer to compromise, and that the Defendants should not be entitled to double Costs by operation of Rule 4.29(4).
Justice Sullivan examined Rule 4.29 and its predecessors and prior authorities and confirmed that, generally, for an offer to qualify as being “genuine” it must have been “reasonable and realistic” in its circumstances, and must contain an element of compromise. A waiver of Costs may constitute a genuine Offer. Sullivan J. held that, in this case, the Defendants’ settlement offer was a considered and substantial Offer. The Court also held that some of the Defendants’ behaviours called for some mitigation of Costs. Accordingly, the Court ordered double Costs with some reductions.View CanLII Details