An award of costs by the Court is discretionary, as the Court can take many factors into account when arriving at their decision. Generally speaking, if you are unsuccessful at trial, or if you are successful yet do not beat ICBC’S last formal settlement offer, then you are exposing yourself to potentially serious costs consequences.
Rules 9-1(5) and (6) of the British Columbia Supreme Court Civil Rules outline the options at a court’s disposal with respect to awarding costs, and what factors they consider when doing so.
(5) In a proceeding in which an offer to settle has been made, the court may do one or more of the following:
(a) deprive a party of any or all of the costs, including any or all of the disbursements, to which the party would otherwise be entitled in respect of all or some of the steps taken in the proceeding after the date of delivery or service of the offer to settle;
(b) award double costs of all or some of the steps taken in the proceeding after the date of delivery or service of the offer to settle;
(c) award to a party, in respect of all or some of the steps taken in the proceeding after the date of delivery or service of the offer to settle, costs to which the party would have been entitled had the offer not been made;
(d) if the offer was made by a defendant and the judgment awarded to the plaintiff was no greater than the amount of the offer to settle, award to the defendant the defendant’s costs in respect of all or some of the steps taken in the proceeding after the date of delivery or service of the offer to settle.
(6) In making an order under subrule (5), the court may consider the following:
(a) whether the offer to settle was one that ought reasonably to have been accepted, either on the date that the offer to settle was delivered or served or on any later date;
(b) the relationship between the terms of settlement offered and the final judgment of the court;
(c) the relative financial circumstances of the parties;
(d) any other factor the court considers appropriate.
In Dempsey v Oh, ICBC’S lawyer made a formal settlement offer of $165,000, however this offer was rejected by the Plaintiff. The Plaintiff was successful at trial, but was only awarded $20,000. As a result of not beating ICBC’S offer, the Plaintiff was required to pay ICBC’S costs, meaning that the Plaintiff, although successful at trial, ended up owing ICBC more money than was recovered at trial.
 The fact that a second offer was made, does not mean that a prior offer is to be ignored: ICBC v. Patko,2009 BCSC 578 (CanLII), 2009 BCSC 578. The reasonableness of the decision of the plaintiff not to accept the offers is to be assessed on the basis of the state of affairs existing at the time of the respective offers.
 The plaintiff also submitted that if he is denied his costs, his modest recovery will be eradicated and that if he is ordered to pay the defendant’s costs he will end up owing it money. The plaintiff says that was not the intent of the Rules. I do not agree. It is not the court’s function to ensure that a plaintiff makes a net recovery from an action when it has ignored a reasonable offer. That would defeat the purpose of the Rule and does not accord with common sense.