Shelley J

1.2: Purpose and intention of these rules
4.24: Formal offers to settle
4.29: Costs consequences of formal offer to settle
9.13: Re-opening case
10.33: Court considerations in making costs award

Case Summary

In a medical malpractice Action, Justice Shelley concluded that the Defendant doctor was negligent and had caused the Plaintiff to die of cancer six months earlier than ordinarily would have happened. The Plaintiffs had requested that the Defendant doctor negotiate a settlement before the death of the individual Plaintiff. This request was rebuffed. The Defendant made an informal “Calderbank” offer to discontinue the Action with each party covering its own Costs, and if the offer was refused the Defendant would seek double Costs at the conclusion of the Trial. This was refused by the Plaintiffs. The Plaintiffs counter-offered informally, but the offer was not accepted.

The parties disagreed about several issues after the Trial concluded. Costs were awarded on a solicitor-client basis because the Defendant introduced the issue of Special Damages in a procedurally incorrect manner and at a late date. Several issues relating to Costs remained in dispute. 

In a follow-up decision, Shelley J. outlined Rule 10.33, which gives the Court the broad authority to order the payment of Costs, in order to determine the preliminary issue of whether an elevated Costs award was appropriate. The Court concluded that an elevated Costs award was fitting since the expert evidence was extensive and substantial and it was often interrelated. The Trial was also long, though Justice Shelley noted that the complexity of the issues was not necessarily reflected in the length of the Trial. 

Justice Shelley also considered the calculation of solicitor-client Costs and then the offers to settle made by both parties. The Court reviewed Rule 4.29 and the case law decided under the former Rules. Her Ladyship noted that the formal offer process is the same under the current Rule as it was under the former Rules: absent special circumstances, a formal offer to settle would result in elevated costs when a litigant bested the offer. The characteristics of a formal offer had been changed in the current Rules in that a formal offer was required to be made at least 10 days prior to the start of the Trial (Rule 4.24(1)(b)). Justice Shelley concluded that the offers to settle made by each of the parties were informal on this basis. Justice Shelley noted that under the former Rules the Court was able to order double costs at its discretion after an informal offer, but that this had not been decided under the new Rules. 

In deciding about whether the mechanisms used in prior cases, under the former Rules, were still relevant, Shelley J. considered whether the Defendant acted in a manner that would shorten the Action under Rule 10.33, and added that the amount could be varied under that Rule. Her Ladyship, informed by the “purpose and intention” principles under Rule 1.2, held that informal/Calderbank offers are an effective mechanism to meet the objectives set out in the Rules. The Defendant was ordered to pay double Costs for all steps in the Action that followed the offer. 

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