A sexual abuse plaintiff's legal costs associated with advancing his or her claim can be very significant, especially if the case goes all the way to trial. A recent decision of the Supreme Court of British Columbia ("B.C."), Nixon v. Pickton, 2015 BCSC 170, highlights the factors that a trial judge may consider in awarding, or refusing to award, costs to a successful plaintiff who has rejected an offer to settle from the defendant, but fails to "beat" that offer at trial. This decision has attracted some media attention (see "Pickton not responsible for victim's full legal costs" on Findlaw.ca , and "B.C. judge says David Pickton sex-assault victim should have settled" in an article published in The Globe and Mail).
Normally, a successful party's legal costs must be paid by the party who loses at trial. However, to encourage parties to settle before trial, our rules of court include various incentives based on payment of legal costs – specifically, who is to pay, on what scale, and starting at what point in time.
In the B.C. case, David Pickton sexually assaulted the plaintiff in the early 1990s. He was convicted for the assault. Many years later, the plaintiff commenced a lawsuit against Pickton seeking approximately $1 million in damages. She alleged that amongst other injuries, the assault caused her pain and suffering and resulted in a loss of past and future earnings.
Six weeks before the trial was set to begin, Pickton offered to settle the lawsuit for $50,000. Approximately 90 minutes after the offer was made, the plaintiff's lawyer notified Pickton's lawyer that the offer was rejected. The case proceeded to trial before a jury.
The plaintiff faced a number of challenges at trial. The accuracy of her memory was attacked, as was her credibility. Pickton's lawyers argued that the many miseries the plaintiff had suffered in her life called into question whether the assault by Pickton had caused her injuries. The judge agreed, concluding at paragraph 11 of his ruling on costs that "Ms. Nixon appeared to me as a witness who was not dishonest, but as a witness whose memory, and therefore credibility, were ravaged by the exceptionally difficult life she has faced. Frankly, on any rational assessment, her dealings with Mr. Pickton in 1991 were only a small event by comparison with the miseries she faced in many other parts of her troubled life." The plaintiff had alleged that Pickton had cornered her, groped her body, and threatened to rape her.
The jury found in the plaintiff's favour and awarded her $45,000 as damages, which was less than Pickton's offer to settle for $50,000.
In his cost analysis, the trial judge stated that "[t]he dominant fact against Ms. Nixon [...] is that she refused an offer to settle which she ought reasonably to have accepted."
The trial judge only awarded the plaintiff her legal costs up until the date of Pickton's offer to settle. The judge refused to award her costs for the period that followed his offer. Pickton requested that he be awarded his legal costs from the date that his offer was made through to the end of the trial. The judge refused his request, stating that the plaintiff was the successful party at trial, and it would be wrong to award any portion of the trial costs to Mr. Pickton. In short, the parties were each made to bear their own legal costs after the offer was made.
The practical consequence for this plaintiff was that she likely netted very little compensation, despite her success at trial, because she had to cover her lawyer's fees that accrued after she rejected Mr. Pickton's offer to settle. One question that arises is whether this same decision could also have been made in Ontario, where the legislative scheme differs from that of British Columbia.
Ontario's Victims' Bill of Rights, S.O. 1995, chapter 6, specifically addresses when a victim of crime sues convicted perpetrators of the crime. The preamble to the Victims' Bill of Rights states that victims should be treated with compassion and fairness and "the justice system should operate in a manner that does not increase the suffering of victims of crime and that does not discourage victims of crime from participating in the justice process."
One provision intended to further these goals relates to legal costs. Section 4(6) states that when a judge orders costs in favour of a victim, those costs "shall" be made on a solicitor-client basis (now known as "substantial indemnity basis"), such as after a favourable outcome at trial, unless the judge considers that to do so would not be in the interests of justice. Where costs on a substantial indemnity basis are awarded, the successful party is able to recoup a much greater percentage of his or her legal costs incurred than when the costs are awarded on the lower scale, known as "partial indemnity" costs.
Section 4(6) reflects the guiding principles of the Victims' Bill of Rights, namely, that victims should be treated with compassion and fairness. In K.T. v. Vranich, 2011 ONSC 683, Justice Whitten stated at paragraph 29 of his reasons for judgment that "[t]hose principles dictate that the cost of litigation should not be borne by [a victim of sexual assault] who is only here by virtue of the intentional actions of [the perpetrator]. Actions in which he sought his own gratification at the expense of [the victim's] autonomy and dignity."
Moreover, cost awards under section 4(6) of Ontario's Victims' Bill of Rights are not made only against the individual who committed the crime. Where an institutional defendant, such as the convicted defendant's employer, is found liable for its employee's wrongful conduct, section 4(6) will be triggered such that substantial indemnity costs will also be ordered against the institutional defendant (see Evans v. Sproule, 2008 CanLII 58428 (ONSC) at paragraph 138).
However, where a defendant makes an offer to settle before trial, that offer is rejected by the plaintiff, and the plaintiff obtains a result at trial that is less than the amount of the offer, it is unclear how section 4(6) of the Victims' Bill of Rights would interact with the costs regime under Ontario's Rules of Civil Procedure. While the rules relating to legal costs are discretionary and determined on a case-by-case basis, the Rules contemplate the scenario of a rejected offer. Pursuant to Rule 49.10(2), where the plaintiff rejects the defendant's offer and obtains a less favourable judgment than the offer, the defendant is entitled to receive its legal costs from the plaintiff starting from the date the offer was made.
Would that result conflict with the express language of the Victims' Bill of Rights? The answer may be no, especially if one favours a technical approach to the statutory language over one that puts the emphasis on the principles of compassion and fairness for victims of crime. Section 4(6) states: "A judge who makes an order for costs in favour of a victim shall make the order on a [substantial indemnity] basis, unless the judge considers that to do so would not be in the interests of justice." This provision only applies where a judge makes an order for costs in favour of a victim. A decision that a plaintiff is not entitled to costs does not offend the language of section 4(6), which addresses the quantum of costs. Moreover, the Victims' Bill of Rights does not provide direction on when a judge should make an order for costs in favour of a victim. Finally, the Victims' Bill of Rights gives the judge residual discretion to do what they believe to be "in the interests of justice".
Applying the Victims' Bill of Rights to the Pickton case provides an illustration of this hypothetical. There, the judge ruled that the plaintiff ought reasonably to have accepted the defendant's offer to settle. As she failed to so, the judge ruled that she was not entitled to her legal costs from the date that the offer was made through to the end of trial. The judge did not make an order for costs in her favour after the date the offer to settle was made, meaning that section 4(6) would not have been triggered. It is only after a judge has chosen to make an order for costs in favour of a victim that they are mandated to do so on a substantial indemnity basis, but a judge always has an overriding discretion to determine to whom and when they will award costs.
While the outcome in the B.C. case may not be at odds with section 4(6) of the Victims' Bill of Rights, there is nonetheless an argument to be made that it would offend the Act's underlying principles, namely that a victim of crime be treated with compassion, fairness, and that victims not be discouraged from participating in the justice process. Where a victim of a sexual crime reasonably believes that they are entitled to a higher quantum of compensation than a defendant has offered, the victim ought to be entitled to take the matter to trial without fear of being unable to recoup their legal costs. That said, victims who are plaintiffs in civil lawsuits would be well advised to objectively evaluate the strengths and weaknesses of their claims and give careful consideration to any offer to settle that is made by a defendant.
David Litwin and Elizabeth Grace are civil sexual abuse lawyers in Toronto. Elizabeth Grace has specialized in sexual assault matters for nearly two decades.
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