Alberta Judges Can Refer To Informal Settlement Offers

This article originally appeared in the September 11, 2015 issue of The Lawyers Weekly.

Alberta Courts may continue to take into account informal settlement offers made "without prejudice" and not in compliance with the Alberta Rules of Court ("Rules") when determining costs awards thanks to a recent Alberta Court of Appeal decision.

Chisholm v Lindsay, 2012 ABQB 81 ("Chisholm") was a personal injury action, decided in February 2012. The plaintiff was eating lunch in a stationary vehicle without her seatbelt on when her vehicle was forcefully re-ended by the defendant's vehicle. The plaintiff suffered multiple injuries including a mild traumatic brain injury, cognitive difficulties, fatigue, chronic pain and partial post-traumatic stress disorder. Liability was not in dispute.

Several "non-Rule" compliant offers were presented prior to the matter going to Court. On September 1, 2011, the plaintiff had offered to settle for $350,000 plus costs at mediation. The defendant rejected the offer but, on November 15, 2011, a week before trial, the defendant presented the plaintiff with the same offer which, in turn, the plaintiff rejected.

Then, on the Friday before the Monday start of the trial, the defendant advanced another informal offer of $360,000 which was also rejected by the plaintiff.

Ultimately, the trial judge awarded the plaintiff damages of $346,734 plus costs. As the amount awarded to the plaintiff was less than what the defendant had offered, the defendant sought to obtain costs. The trial judge concluded that she had the discretion to consider the two "non-Rule" compliant offers made by the defendant in determining costs. She admitted the two offers into evidence and exercised her discretion to deny the defendant's plea for trial costs. Instead, she awarded trial costs to the plaintiff.

In regards to the first offer of $350,000, she declined to make an award for costs to the Defendant because:

the offer was made only a week before trial, it was only $3,260 more than the judgement, it was exactly the same offer the plaintiff had put forward two and a half months earlier, and the defendant could have taken advantage of the formal offer to settle process set forth in Rule 4.24(1) by simply serving the offer a few days earlier. The trial judge rejected the defendant's second offer of $360,000 as neither reasonable nor genuine.

In March 2014, more than two years after the judgment, the plaintiff in Chisholm brought an application to...