Refusal To Negotiate Proves Costly To Successful Plaintiffs
This is our second blog in as many weeks where a plaintiff’s conduct resulted in financial loss despite winning at trial.
It’s common for successful litigants to pursue the payment of costs from unsuccessful litigants in a trial. However, a recent decision from the Ontario Superior Court of Justice shows that the “reckless and pernicious” pursuit of costs resulted in a “Pyrrich victory” – one that is not worth the cost it took to achieve.
A collision at the track
At the time of the incident the injured party was a Ph.D. student at a university. On December 10, 2011, he was running on lane one of the university’s indoor track. Other users at the time included a bobsled team (using lanes three and four), and the running club, which who’s members were doing sprints under their coach’s supervision in lanes one and two.
Evidence at trial suggested the injured party, who was wearing earbuds at the time, was wandering between his lane and lane two, despite having been warned of the running club’s use of the track. A member of the running team (the “runner”), running at a high rate of speed, found himself unable to stop in time, running into the injured party’s shoulder, sending him flying.
As a result of the collision the injured party required shoulder surgery as well as subsequent operations. At the time of trial he was suffering from discomfort and a limited range of motion.
Settlement negotiations prior to trial
The injured party and his family (the “plaintiffs”) took action against the runner, the running club, the coach, and the university. The jury ultimately found no liability on the part of the runner of the university, but did find the coach and the running club partially liable, assessing their contributions to the incident at 60%, with the plaintiff being responsible for the other 40%.
Prior to the trial the university made a formal offer to contribute $30,000 towards the settlement of all of the plaintiffs’ claims as well as 15% of the partial indemnity costs of the plaintiffs, and 15% of any assessable disbursements.
Rule 49 of Ontario’s Rules of Civil Procedure encourages litigants to offer and accept reasonable settlement offers. Those who fail to do so could face financial consequences from the courts. Offers made to satisfy these conditions are sometimes referred to as “Rule 49” offers. The defendants collectively agreed to pay a Rule 49 offer of $62,500 plus a prejudgment interest amounting to more than $100,000. That same day, the plaintiffs made a Rule 49 offer to settle for $1,216,550. The was clearly a canyon dividing the two sides. The judge would later characterize the plaintiffs’ offer as “so extreme that it effectively was a message that there was no way this matter would settle.”
The trial started in early May 2018. On May 14, a few days into the trial, the judge twice suggested the parties engage in a pre-trial (despite the trial having started), indicating damages were likely to be in the amount of $100,000-$125,000 (much lower than the plaintiffs’ offer). The plaintiffs, however, refused to negotiate.
In the decision the judge wrote that the continuation of a trial made little financial sense to the plaintiff, who’s potential award could be negated by costs. The court described the plaintiff’s behaviour as “stubborn (a characteristic which actually came out in the trial testimony; he steadfastly refused to accommodate to the presence of other users on the track that morning), and in the end the only person he hurt was himself.
The plaintiffs were ultimately successful in their claims against the running club and the coach, but unsuccessful against the university and the runner.
The defendant’s first offer ended up being more than the plaintiffs would ultimately receive from the jury. As a result of this, Rule 49, “provides that if the plaintiff obtains a judgment which is as favourable as the defence offer or less, the plaintiff is entitled to partial indemnity costs to the date of the offer and the defendant is entitled to partial indemnity costs from the offer date “unless the court orders otherwise.” Essentially, this meant the plaintiffs were on the hook for the defendants’ costs following the offers.
The Sanderson Order
The plaintiff requested that a Sanderson order be made, which is when an unsuccessful defendant (the running club and the coach), rather than the plaintiff, is required to pay the costs of a successful defendant (the university and the runner).
The test for a Sanderson order is twofold. The first question asks whether it was reasonable to join the defendants together. The court agreed with the plaintiff on this ground and moved onto the second step, which grants the court the discretion to determine whether a Sanderson Order would be “just and fair in the circumstances.”
The court assessed a number of factors, including:
1. Did the defendants at trial try to shift responsibility onto each other?
2. Did the unsuccessful defendant(s) cause the successful defendant(s) to be added as a party?
3. Were the actions against the two principal defendants (the university and the running club) independent of each other?
4. Are the plaintiffs unable to pay?
Awarding of costs
The court found the answer for all of the factors to be “no.” As a result, the court awarded costs to all of the defendants following the Rule 49 offers. The university was awarded $70,000, while the runner, the running club, and the coach (who were represented by the same lawyer) were collectively awarded $69,000.
Meanwhile, the plaintiffs were awarded just $61,000 in damages and $43,000 in costs, much less than what they were ordered to pay.
The experienced personal injury lawyers at Derfel Injury Law represents plaintiffs in all areas of personal injury law, including motor vehicle accidents, disability claims and medical malpractice. By focusing exclusively on personal injury law, we know the ins and outs of the system, and use this knowledge to provide personalized service where we strive to get our clients what they deserve, while minimizing risk. If you have been injured and feel you may be owed damages, call us at 416.847.3580 or reach us online to talk today.