What is the effect of double costs on settlement negotiations?
British Columbia, Canada
The following excerpt is from Gosbjorn v. Hadley, 2008 BCSC 1614 (CanLII):
The availability of double costs is a technique to promote reasonable settlements. As stated in Mackenzie v. Brooks, 1999 BCCA 623, [1999] B.C.J. No. 2411, at para. 21: 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. 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.
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