Trial judge should have considered effect on costs of settlement offer that didn’t conform to Rules of Civil Procedure: Appeal Court

An Ontario trial judge erred by not considering the mitigating factor on costs of a reasonable settlement offer that did not conform to the Rules of Civil Procedure, the Ontario Court of Appeal ruled in a consolidated auto injury tort action that turned on the joint and several liability of co-defendants.
In Lawson v. Vierson, Martha Lawson was involved in two motor vehicle accidents that occurred approximately seven months apart. The first incident in August 1997 involved Maria and John Vierson. The second, in March 1998, involved Scott Robert Hart.
Lawson launched two separate tort actions, one against each defendant. The actions were consolidated into one, as the position of Lawson’s doctors was that the first and second accidents contributed to the same damage and injuries she suffered, which included a mild traumatic brain injury, cognitive defects, a major depressive episode and a general anxiety disorder, to name a few.
Prior to trial, Hart offered a settlement of $300,000 to the Lawsons. The Viersons offered a separate, $100,000 offer to settle with the Lawsons. The Lawsons offered to settle the consolidated action for $1.25 million.
At trial, the jury found the Viersons 100% responsible for the first motor vehicle accident and awarded $20,000 for general damages, resulting in a final award of $5,000 once the statutory deductible was applied.
The jury found that Hart was 75% responsible for the second motor vehicle accident and awarded $100,000 in general damages ($85,000 after applying the deductible).
The Lawsons sought $519,378 in costs, which the Viersons argued they should not have to pay, since their settlement offer was better than what Lawson obtained at trial.
However, the trial judge said the Viersons’ offer did not conform to Rule 49.11, which essentially says the co-defendants must make a single settlement offer because they were alleged to be jointly and severally responsible for Lawson’s injuries.
But even though the Vierson and Hart offers were separate, and thus did not conform to Rule 49.11, the Ontario Court of Appeal found the trial judge erred in not considering the Vierson’s generous settlement offer within the context of Rule 49.13, which gives a judge discretion to consider the offers when contemplating costs.
“When the Viersens offer is viewed in context rather than in isolation, it is therefore apparent that the offer was a genuine and generous offer to settle and, particularly when taken together with the Hart offer, complied with the spirit of rule 49.10,” the Court of Appeal ruled. “In these circumstances, the Viersens offer is the type of offer that, as contemplated by rule 49.13, ought to be given considerable weight in arriving at a costs award.”