Shepard v. Sanderson & Govt of PEI 2012 PESC 20

The plaintiff Shepard suffered injuries after being struck by heavy snow thrown onto her by a snowplow. She commenced two separate actions against the defendants for payment of Section B benefits pursuant to a standard policy of automobile insurance, and in negligence. The court found that the defendants were 100 percent liable and ordered costs payable to Shepard. Shepard offered to settle the section B claim and
the “liability component” of the negligence claim prior to trial and, as such, claimed substantial indemnity costs pursuant to Civil Procedure Rule 49.10, which states,
49.10 (1) Where an offer to settle,

(a) is made by a plaintiff at least seven days before the commencement of the hearing;

(b) is not withdrawn and does not expire before the commencement of the hearing; and

(c) is not accepted by the defendant, and the plaintiff obtains a judgment as favourable as or more favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer to settle was served and substantial indemnity costs from that date, unless the court orders otherwise.

The court found that the two offers were not Rule 49 offers as they did not put the recipient in a position where the recipient must or should give serious and careful consideration to the merits of their own case. Furthermore, the court found that an element of compromise is not an essential element of an offer to settle but its absence can be a relevant factor to be taken into account.