10.14.05
Accept this about offers
In the tragic case of Walker v. Ritchie, released April 28, 2005, the OCA laid down some important rules for when a defendant may be obliged to pay a costs premium.
Rule #1: if the costs award is partial indemnity only, then no premium.
Rule #2: it is open to a trial judge to award a premium on solicitor and client costs in a proper case because of the risk assumed and the result achieved.
Rule #3: there need not be evidence that the plaintiffs were charged a premium by their lawyer.
Rule #4: there must be evidence that the plaintiff lacked the financial resources to fund lengthy and complex litigation, that plaintiff’s counsel financed the litigation, that the defendant contested liability and that plaintiff’s counsel assumed the risk not only of delayed but possible non-payment of fees.
Conclusion: this ruling helps puts rule 49 back in vogue. When the new costs grid was interpreted to mean that partial indemnity costs should be 75% of substantial indemnity costs, there was suddenly much less incentive for a plaintiff to make a rule 49 offer. Why bother? Why show weakness? Why lower the ceiling? Then there was the OCA decision in Boucher, which scaled back partial indemnity costs. Now with the prospect of defendants paying a premium where the plaintiff beats its rule 49 offer, there’s a lot more upside to making such an offer.