The Consequences of Failure: Rule 37 and the Rise and Fall of the Formal Offer to Settle

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1 INSURANCE LAW CONFERENCE 2008 PAPER 4.1 The Consequences of Failure: Rule 37 and the Rise and Fall of the Formal Offer to Settle These materials were prepared by Patricia J. Armstrong and Christopher J. Hope of Lindsay Kenney LLP, Vancouver, BC, for the Continuing Legal Education Society of British Columbia, September Patricia J. Armstrong and Christopher J. Hope

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3 4.1.1 THE CONSEQUENCES OF FAILURE: RULE 37 AND THE RISE AND FALL OF THE FORMAL OFFER TO SETTLE I. Introduction... 1 II. Payment Into and Out of Court and Calderbank Offers... 2 III. Formal Offers to Settle Under the 1993 Rules... 3 IV. Summary (Post-Canfor)... 5 V. Post-Canfor Decisions... 5 VI. The Future Calderbank s Revenge... 8 VII. Conclusion... 9 I. Introduction The successful party in litigation is, in the normal course of things, entitled to be paid its costs by the unsuccessful party, subject to the discretion of the trial judge. The theory is, one presumes, that the successful party ought not to have had to go to the trouble and expense of litigating, and an award of costs will (partially) compensate the successful party for that expense. Madam Justice McLachlin, in Houweling Nurseries v. Fisons Western (1988), 37 B.C.L.R. (2d) 2 (C.A.), discussed the purposes of costs: Costs in our system of litigation serve the purpose, not only of indemnifying the successful litigant to a greater or lesser degree, but of deterring frivolous actions or defences. Parties, in calculating the risks of proceeding with a particular action or defence, should be able to forecast with some degree of precision what penalty they face should they be unsuccessful. The knowledge of those penalties also acts as incentive for early settlement, at least insofar as a party who knows it will be unsuccessful goes. Another costs-based incentive for settlement is the formal Offer to Settle 1 under Rule 37 of the Rules of Court. Under the current Rules, any party is able to deliver an Offer to Settle to any other party. The scheme is really quite simple. If a party has delivered an Offer to Settle that is not accepted, and at trial the party achieves a result better than that contemplated by its Offer to Settle, certain costs consequences result. The precise consequences are different depending on which party made the offer, but generally the consequences are significant. The knowledge of the certainty of those consequences is what acts as incentive for settlement. As stated in MacKenzie v. Brooks, 1999 BCCA 623: Rule 37 is clearly designed to encourage the early settlement of actions. It does so by rewarding the party who makes an early and reasonable settlement offer, and by penalizing the party who declines to accept such an offer. The reward or penalty takes the form of costs (in some cases, double costs) from the date the offer is made. 1 Throughout this paper the capitalized words Offer to Settle and Offer are used to distinguish Rule 37 Offers from informal offers to settle or offers of settlement under Rule 37A.

4 4.1.2 The significant role which costs now play in the litigation process operates as a powerful incentive to parties to make early offers of settlement under the Rule and to accept reasonable offers. Recently, however, the certainty of those consequences, and therefore their incentive value, has been eroded. The circumstances in which an Offer to Settle will be effective have become unclear. Without certainty as to consequences, an Offer to Settle is a much-reduced incentive to settle. Since the purpose of the existence of the Offer to Settle is to act as an incentive to settlement, the Offer is in danger of becoming obsolete. As we shall see, it may in fact be too late to save the Offer to Settle. II. Payment Into and Out of Court and Calderbank Offers Prior to 1993, the Rules of Court did not contemplate formal offers to settle with prescribed costs consequences. Under the 1971 Rules, Rule 37 was titled, Payment Into and Out of Court, and only a defendant or third party could employ the prospect of costs as an incentive to settle, at least as far as the Rule 37 contemplated. Pursuant to Rule 37(1), a defendant could pay into court a sum of money in satisfaction of the whole or part of a claim for which the plaintiff sues. Pursuant to Rule 37(17), if the plaintiff proceeded with the action and recovered an amount equal to or less than the amount paid into court, the plaintiff was entitled to costs to the date of delivery of the Notice of Payment In, and the defendant was entitled to costs thereafter. Though the Rules at the time did allow a plaintiff to employ a similar tactic by making an offer to settle under Rule 57(13), such an offer was (a) only available in an action for damages, (b) could result in extra costs only in relation to trial and trial preparation, and, more importantly, (c) the costs consequences were not prescribed or automatic, but were subject to judicial discretion. Thus, the remedies available to plaintiffs and defendants were not equal; in the later words of Madam Justice Southin, there was a gap in the Rules with respect to settlement offers. 2 Further, since the payment of money into court actually required the payment of money into court, and since that money could not be paid out of court without order, the situation was less than ideal for defendants too. However, the ingenuity of counsel, and the willingness of judges, first of the English Court of Appeal, to go along with it, gave both plaintiffs and defendants an additional, and easier, option. (The English Rules of the time were similar to ours in that they also dealt only with payment in.) In Calderbank v. Calderbank, [1975] 3 All E.R. (C.A.), a matrimonial case, the wife had offered, in an affidavit, to transfer a piece of property to her husband to settle his claims in the action. After trial, the husband recovered less than the value of the property that had been offered. The Court held that the offer could be taken into account as part of the judge's discretion as to costs. The husband was awarded costs up to the date of the offer and the wife was awarded costs thereafter. The BC courts, in possession of the same discretion as to costs, soon demonstrated a willingness to give effect to Calderbank offers in matrimonial matters. 3 The legal profession was encouraged to use them by an article in The Advocate. 4 Shortly thereafter, Calderbank offers were given consideration in non-matrimonial matters. 5 2 Brown v. Lowe, 2002 BCCA 7; but one has to question whether there really was a gap of any significance, since Madam Justice Southin did not mention Rule 57(13) and it clearly filled most of the gap that she thought existed. 3 Graham v. Dillon (1986), 5 B.C.L.R. (2d) 218 (S.C.), in obiter. 4 Thornicroft, Calderbank v. Calderbank: A New Remedy in the Law of Costs (1987), 45 The Advocate Ferris v. Kirstiuk et al., [1989] B.C.J. No. 975 (Co. Ct.) (QL), in obiter.

5 4.1.3 Thus, by the late 1980s, the so-called gap in the Rules with reference to costs consequences of settlement offers had been filled by the Calderbank offer. By then, both plaintiffs and defendants could make a written offer to settle with a reasonable chance that it would be effective in costs. Though the costs consequences of a Calderbank offer were always subject to the trial judge's discretion (recall that the consequences of payment into court were prescribed and not subject to discretion), they were sufficiently predictable that use of the payment into court appears to have significantly declined. All of this discussion of Calderbank may seem like an aside. But it was Calderbank that inspired the creation of the formal Offer to Settle; it was the rise of the Calderbank offer that spelled the demise of the payment in ; it is Calderbank more than anything else that is to blame for the current state of the Offer to Settle; and it appears that the Calderbank offer will ultimately live on when the Offer to Settle is finally on its back pining for the fjords. III. Formal Offers to Settle Under the 1993 Rules In 1993 the Rules with respect to costs were significantly changed. The amended Rules abolished the practice of payment into court by defendants. That mechanism was replaced with new rules giving any party the ability to make a written Offer to Settle in a prescribed form, with prescribed costs implications. The consequences of failure to accept a party s Offer that should have been accepted were the same as the consequences of proceeding in the face of an adequate payment into court. Obviously, this was inspired by the widespread use of Calderbank offers, and was intended to bring to that process the certainty that the process of payment into court had offered. And, though no one knew it until 2002, the 1993 revisions also abolished the Calderbank offer as a means of making an offer of settlement with effective costs consequences. Between 1993 and 2002, both formal Offers to Settle and informal Calderbank letters flitted back and forth among counsel; the former where the parties and issues were straightforward and the latter where counsel either were not sure how to make an Offer to Settle or felt that Rule 37 did not permit an Offer to Settle to be made. Formal Offers to Settle existed alongside their Calderbank antecedents. How surprising it must have been for British Columbian Calderbank offers to find out some 27 years after their birth that they had been dead since age 18. In Brown v. Lowe, 2002 BCCA 7, Madam Justice Southin held, in obiter, that the gap in the Rules that had been filled on an ad hoc basis by the English Court of Appeal in Calderbank had been filled in a more formal way by the 1993 revisions to Rule 37 of the B.C. Rules of Court. Therefore, Rule 37 was a complete code, and there was no room for the judicial discretion that Calderbank gave. Madam Justice Southin went on: [155] The learned judge below invoked Rule 37(31) as a reason for applying Calderbank v. Calderbank. In my opinion, that subrule is misunderstood. [156] What it says is this: (31) Other than in an action for defamation, if several defendants are sued jointly, a plaintiff may not make an offer to settle except jointly to all defendants, and a defendant may not make an offer to settle except jointly with all other defendants. [157] With all respect, the defendants here were not sued jointly. Under s. 4 of the Negligence Act, R.S.B.C. 1996, c. 333, their liability is joint but they are not joint tortfeasors. The cause of action against each is several. Tortfeasors can only be said to be sued jointly if they have joined together in committing the tort and the liability of the one is the liability of the other, e.g. if two landowners agree to enter upon the land of another and cut down his trees.

6 4.1.4 [158] In other words, there was nothing to prevent the respondent Bryson from making an offer to settle as prescribed by Rule 37. There was some doubt as to whether these obiter comments were the law; that doubt was dispelled by Cridge v. Harper Grey Easton, 2005 BCCA 33, in which it was confirmed that Rule 37 is a complete code. Further, the Court confirmed that, It is important that the Rule be uniformly applied to give effect to its purpose. Litigants must be able to make offers of settlement under the Rule with confidence that the Rule will be applied when costs are awarded. The Court of Appeal in Cridge also stated that once an Offer to Settle was found to be valid, the costs consequences of Rule 37 must be applied without discretion. So, what did Brown v. Lowe really mean? The obvious answer was that Calderbank offers could not be effective because Rule 37 was a complete code. The less obvious answer was also buried in obiter, and it was not confirmed by Cridge. In clarifying what the trial judge had done wrong in Brown v. Lowe (he thought he had discretion to consider non- Rule 37 offers in circumstances where Rule 37 could not be used by a party), Madam Justice Southin decided that Rule 37(31) meant that if several defendants were sued jointly (if they were alleged to be joint tortfeasors), the only effective Offer to Settle they can make is a joint Offer to Settle. She also found, by inference, that if several defendants were sued together, but not jointly, they could make separate Offers to Settle. This bears repeating: She did not state that they must make separate Offers to Settle; only that they could. What really threw a wrench into the workings of Rule 37 was Madam Justice Southin's conclusion as to what the phrase, sued jointly in Rule 37(31) meant. In her obiter comments (quoted above), she stated that defendants were not sued jointly merely because they were named as defendants on the same writ or in the same action or were jointly liable because of the Negligence Act (BC); she said that defendants were only sued jointly where they were inseparable in terms of the cause of action against them, such as with joint tortfeasors. It was not until Madam Justice Southin s obiter comments with respect to Rule 37(31) were confirmed by Madam Justice Rowles in Canadian Forest Products v. BC Rail, 2005 BCCA 460, that the implications of this were realized. In the meantime, as a direct result of Brown v. Lowe, a new Rule 37A Offers of Settlement was created, which resurrected Calderbank offers as written offers of settlement which are available in any circumstance to which Rule 37 does not apply. This was necessary because, although Rule 37 is a complete code, there are circumstances in which an Offer to Settle could not properly be made (apparently). But this is an aside. 6 In Canadian Forest Products ( Canfor ), the plaintiff sued the defendant railway, a shipping company, and an ocean port. The defendants were not joint tortfeasors. The plaintiff delivered one Offer to Settle to all of the defendants to settle all of its claims. Madam Justice Rowles agreed with Madam Justice Southin s comments in Brown v. Lowe and held that, Just as multiple defendants who are not sued jointly are unable to make a valid global offer to a plaintiff under Rule 37, so too is a plaintiff unable to make a valid global offer to multiple defendants who are not sued jointly. The same considerations apply. To avail itself of the costs consequences prescribed by Rule 37, Canfor would have had to make individual offers to settle to the defendants. Therefore, Madam Justice Rowles held that the plaintiff s Offer to Settle was ineffective. 6 It is arguable whether Rule 37A has had any effect at all, because there is a dearth of reported decisions where judges have given effect to Rule 37A offers.

7 4.1.5 However, what was not acknowledged explicitly by Madam Justice Rowles in Canfor is that Madam Justice Southin s interpretation of Rule 37(31) in Brown v. Lowe was taken by her to mean something different than what Madam Justice Southin had said. Recall that Madam Justice Southin s views were that (a) if several defendants were alleged to be joint tortfeasors, the only effective Offer to Settle they can make is a joint Offer to Settle, and (b) if several defendants were sued together, but not jointly, they may deliver separate Offers to Settle that will be effective. The first principle is what Rule 37(31) explicitly says. The second principle is not explicitly stated but logically flows from it. Madam Justice Rowles added the following principle, which is neither explicitly stated in, nor logically flows from, Rule 37(31): if several defendants are not alleged to be joint tortfeasors, a plaintiff must make separate Offers to Settle. That is not what Rule 37(31) says. It does not say anything about the situation where the defendants are not joint tortfeasors. The Rule only refers to the situation where defendants are joint tortfeasors. Rowles principle also is not what Madam Justice Southin said. Madam Justice Southin only said that where the defendants are not joint tortfeasors, the defendant may deliver separate Offers. Madam Justice Rowles arrived at the conclusion that a plaintiff must make separate Offers to Settle to several defendants who are not alleged to be joint tortfeasors by assuming that Madam Justice Southin had already decided the converse. This seems apparent from her statement, Just as multiple defendants who are not sued jointly are unable to make a valid global offer to a plaintiff under Rule 37 But Madam Justice Southin did not say that multiple defendants who are not sued jointly are unable to make a valid global Offer. The phrase, Just as clearly takes it as already settled that multiple defendants who are not sued jointly are unable to make a valid global offer. But it was not settled; that interpretation of Rule 37(31) had never before been articulated. To summarize Canfor: On the (unsupported) assumption that multiple defendants not sued jointly are unable to make a valid global offer, Madam Justice Rowles determined that the converse is also true: where the defendants are not joint tortfeasors, the only effective Offer a plaintiff can make is an offer to an individual defendant. IV. Summary (Post-Canfor) 1. Defendants who are alleged to be joint tortfeasors must make a joint Offer to Settle: Rule 37(31). 2. Plaintiffs who allege defendants are joint tortfeasors must make a joint Offer to Settle: Rule 37(31). 3. Defendants who are not alleged to be joint tortfeasors may make separate Offers to Settle: Brown v. Lowe. 4. Plaintiffs who do not allege defendants are joint offers must make separate Offers to Settle: Canfor. From the last, it seems inevitable (though not logically necessary) that the following would be found, since it had already been assumed: 5. Defendants who are not alleged to be joint tortfeasors must make separate Offers to Settle. V. Post-Canfor Decisions Between the time of the decision in Canfor and early 2007, it appeared that Cridge stood for little more than the proposition that where the prescribed costs consequences of Rule 37 applied, the court had no discretion to vary those consequences. It does not appear that courts asked to decide the validity of joint Offers gave any consideration of Canfor (see, for example, Jawanda v. Jawanda, 2007 BCCA 93).

8 4.1.6 The Court of Appeal in Lacerte v. Singh, 2006 BCCA 289, approved the reasoning in Canfor, but because of policy considerations rather than because of the Brown v. Lowe interpretation of Rule 37(31). In an action for breach of contract, two defendants made a joint Offer to two plaintiffs. The action involved thee causes of action based on three different contracts. The Court of Appeal held that the offer was not valid because it was vague and ambiguous. Another Court of Appeal case, I.R.C. v. S.C., 2006, BCCA 428, reached the same result, on the basis that, unless the parties know exactly what they are being asked to agree to, an Offer will be vague, and the policy underlying Rule 37 is likely to be undermined. Although these cases reached the same result as Canfor, and cited it, the reasons for the decisions were based on whether the terms of the order were clear and unambiguous, not on whether the defendants were sued jointly. There are other reported decisions where joint Offers to Settle were held to be valid even though the defendants making the joint Offers appear not to have been joint tortfeasors, though it is difficult to tell because the issue was not argued (see, for example, Downey v. St. Paul s Hospital, 2007 BCSC 695). Presumably there are unreported cases as well, since many costs orders are made on the spot after oral reasons for judgment that may or not become reported reasons (see, for example, Houghton v. Zalesky, 2008 BCSC 335, and Lubick v. Mei, BCSC 555). In January 2007 reasons for judgment were filed in Roeske v. Grady, 2007 BCSC 15, two actions heard together for trial. The plaintiff, who had been injured in two motor vehicle accidents, sought $8 million in damages from two sets of defendants. She was awarded $7,500 for her injuries from the first accident and $15,000 for her injuries from the second accident. The two defendants in the first action had made a joint Offer to Settle of $50,000, and the three defendants in the second action had made a joint Offer to Settle of $50,000. At the hearing of the defendants application for double costs, the plaintiff argued that both Offers to Settle were invalid, because the defendants in each action had not been sued jointly, and that Canfor stood for the proposition that a joint offer made by defendants who were not alleged to be joint tortfeasors does not comply with the requirements of Rule 37. The trial judge accepted that argument in two separately-issued sets of reasons. In Roeske v. Grady, the defendants were a driver and an owner of the motor vehicle that struck the plaintiff s motor vehicle. The trial judge agreed that, because separate causes of action were pleaded against the owner and driver, they were not alleged to be joint tortfeasors, and therefore an Offer made jointly by them was invalid. 7 The defendants in Roeske v. Brickwood Holdings, were an owner and driver as well as ICBC as nominal defendant. Their joint offer was held invalid for the same reasons. 8 Canfor was the first instance of a plaintiff being deprived of the fruits of an Offer made jointly to defendants because they were not alleged to be joint tortfeasors without any suggestion that the Offer was vague or ambiguous. The two Roeske cases appear to be the first instance of defendants being deprived of the fruits of their joint Offer to settle due to the definition given sued jointly by Madam Justice Southin in Brown v. Lowe and the mistaken assumption in the crucial chain of reasoning in Canfor. The implication of Roeske is that unless the allegations against the defendants are identical in every respect, each defendant must make a separate Offer to Settle. That is, where there are any allegations made against one defendant and not another defendant, those defendants are not sued jointly for the BCSC BCSC 1038.

9 4.1.7 purposes of Rule 37. But how can an owner and driver of a motor vehicle involved in an accident separate their liability for damages in a case like Roeske? Let us assume that the defendants in Roeske assessed the plaintiff s claim at $50,000 and wanted to make an offer in that amount. The driver and the owner cannot make a joint Offer in that amount. Neither the owner nor the driver can make a $50,000 Offer on their own, for if they do, the plaintiff can accept it and proceed against the other. They cannot each make a $25,000 Offer for the same reason. Although not considered to have been sued jointly there really is no way to separate their liability to pay damages. Therefore, they are de facto prevented from making an Offer to Settle. Since, as we have seen, the point of Rule 37 is to facilitate settlement, if Roeske is the law, it must be wrong, if not wrong in law, then wrong for policy reasons. That is, Roeske may be legally correct, but where policy and law are different, one of them must change. Therefore, if Rule 37 operates as Roeske says it does, it is destined to fail. We will come back to this. As with Canfor, Roeske appeared to have little effect. For example, in Harrison v. Li, 2007 BCSC 1155, a joint offer made by two defendants likely not sued jointly was held to be valid. The Canfor issue was not raised. Similarly, the Court of Appeal in Cimolai v. Hall, 2007 BCCA 225, affirmed an award of double costs to a group of defendants who had made a joint Offer despite the fact that it was clear that the defendants were not sued jointly. The issue of multiple defendants was not raised. In Pipe v. Dusome, 2007 BCSC 1764, where three defendants who were not sued jointly (separate allegations were made against the owner of the vehicle) made a joint Offer to Settle, the issue was raised, and their Offer was held to be valid. However, although the issue was raised and argued at the hearing of the application, it was dealt with by the trial judge in a perfunctory manner in her reasons: [5] With respect first to the validity of the offer to settle, the writ and statement of claim included a plea for vicarious liability and joint and several liability on the part of the defendants. Rule 37(31) says: Other than in an action for defamation, if several defendants are sued jointly, a plaintiff may not make an offer to settle except jointly to all defendants, and a defendant may not make an offer to settle except jointly with all other defendants. I see no basis upon which to set aside the offer to settle on this ground. On the other hand, since Roeske a number of cases at the Supreme Court level have invalidated such joint Offers, though not always on the same grounds as Roeske: Cleeve v. Gregerson, 2007 BCSC 1470; Romfo v Ontario, 2007 BCSC 1772; and Marszalek v. Bishop, 2008 BCSC 370. In the last case, the Court stated: [37] Clearly, this issue has been controversial. There are difficulties with joint offers, whether in the context of multiple or single actions. Such offers do not take into account the possibility that the plaintiff may succeed against one defendant but not others, or the possibility of differing degrees of liability among the defendants. On the other hand, a single offer by a defendant may not take into account a proportionate assessment of costs in relation to liability. It is not clear how multiple non-joint defendants in a single action can make individual offers to settle under Rule 37 in such a way as to avoid double recovery of costs to a plaintiff: see, for example, Coleman v. Spong, 2003 BCSC 724. Thus (with Pipe as the sole dissenting voice in the wilderness) the law appears to be that defendants that are sued together cannot make a joint Offer to Settle if there are allegations in the Statement of Claim that are not made against all of the defendants. If there are any separate allegations, the defendants are not sued jointly, and a joint offer will not be valid. Though there are questions about how the law got to this point, it appears to be established enough so that judges considering the issue are unlikely to depart from it.

10 4.1.8 The result is the very uncertainty warned against in Cridge: Litigants must be able to make offers of settlement under the Rule with confidence that the Rule will be applied when costs are awarded. Such confidence is not possible in the present circumstances. Although the why of the current state of the law is a concern secondary to the what of the law, one cannot help but feel that the judges of the Supreme Court may be unmotivated to go out of their way to save a Rule which has taken away their discretion with respect to costs and settlement offers. VI. The Future Calderbank s Revenge The rules of civil procedure (the Rules of Court) which currently govern the processing of cases in BC are based on the English rules of Many changes have taken place but the Rules have not fundamentally changed. Not surprisingly, there is and has been for some time a movement to significantly change the way civil cases are dealt with. In March 2002 the BC Justice Review Task Force was established on the initiative of the Law Society of BC. The objective of the Task Force is to identify a wide range of reform ideas and initiatives to make the justice system more responsive, accessible, and cost-effective. The Task Force is a joint project of the Law Society, the Attorney General, the BC Supreme Court, the BC Provincial Court, and the BC Branch of the Canadian Bar Association. 9 Since late 2006 the Civil Justice Reform Working Group, a committee of the Task Force, has been working towards a major re-writing of the Rules of Court. The latest draft version of the new Rules, the March 2008 Work-in-Progress Draft, " would end the prescribed consequences for failure to beat or accept a written offer to settle that were established in the 1993 Rules. Instead, the new Rules would restore the court s discretion with regard to costs and state only that an offer to settle may be considered by the court in exercising its discretion. In fact, the proposed new Rules would bring us right back to Calderbank. 10 Perhaps this is not surprising, given that the virtues of Offers to Settle under Rule 37 do not, in the opinion of some observers, outweigh its deficiencies. As stated by Ted Gouge, a member of the Rules Revision Committee, in January 2007, My own view is that Rule 37 creates many unjustifiable injustices and that its virtues are vastly overrated. It ought to be possible for any literate citizen to pick up a copy of the Rules of Court and find in it a simple set of instructions for the conduct of her lawsuit which she can follow without expert assistance. Rule 37A meets that criterion. Rule 37 does not. Rule 37A allows judges the flexibility to ameliorate injustice in individual cases. Rule 37 does not. Rule 3227 catches the unwary on technical errors. Rule 37A does not. If it were up to me, we would repeal Rule 37 and leave the Calderbank letter as the governing procedure. 11 Of particular note is that, though the court may, under the proposed new Rules, consider any other factor it considers appropriate, one of the considerations specifically referred to is the relative financial circumstances of the parties. Insurance companies are in better financial circumstances than plaintiffs, typically. Clearly insurers cannot expect to reap the benefits of beating an offer to settle if that is to be a significant factor. 9 See 10 See Rule Ted Gouge, Offers to Settle and Costs Awards in British Columbia Practice (January 2007), course materials, Maximize Your Personal Injury Practice: 20 Ways to Get Smart Fast, Trial Lawyers of British Columbia.

11 4.1.9 The work of the Working Group has been widely, and strongly, criticized. 12 However, the Working Group continues to consult with stakeholders and it is expected that its recommendations will eventually result in new Rules of Court, possibly by January VII. Conclusion The Offer to Settle as a mechanism for encouraging settlement of claims is clearly in difficulty. Once it had been decided that the Rules allowed no discretion to judges, perhaps it was only a matter of time, as the ability of judges to discretely judge is what makes the system work. It is often said that the Rules of Court the court's servants, not its masters. The Offer to Settle under Rule 37 is a servant that has become a little too rebellious. But the rebellion has failed, put down by a judiciary willing to fight to retain its discretion, and the consequences of failure are, if not prescribed, inevitable. 12 For example, see Bouck, Rejuvenating the Civil Justice System: A Better Model (February 2007), course materials, Maximize Your Personal Injury Practice: 20 Ways to Get Smart Fast, Trial Lawyers of British Columbia, in which he states, the 2006 Report is written in bureaucratic words laden with social science jargon reflecting a profound misunderstanding of the role courts play in democracy. ; Roberts, Implementation of the Proposed New Rules of Civil Procedure in the Concept Draft (2008), 66 The Advocate 177, where he writes, some of the proposed rules have the real potential to undermine the rule of law in civil cases in this province and to make civil justice more complex and expensive, and less accessible, and that the adoption of proportionality as the new governing principle or object of the rules, would be a serious erosion of the rule of law in this province and should be strenuously resisted. ; and Holmes, Should the Proposed New Rules Be Found Wanting? (2008), 66 The Advocate 189, wherein the author characterizes the work of the Task Force as an attack on our system of justice.

12 UPDATE - SEPTEMBER 2008 While we were preparing our paper, the B.C. cabinet was considering the fate of the Rule 37 Offer to Settle. On June 6, 2008 cabinet ordered Rule 37 repealed. Effective July 1, 2008 it was replaced with a new Rule 37B. It is not clear whether the Rules Revision Committee adopted the Working Group's draft wording or whether the Working Group had advance notice of Rules Committee recommendations, but in any event the wording of Rule 37B is identical to the Working Group's March 2008 Work-in-Progress Draft.