DAMAGES, INTEREST AND COSTS IN CANADA By Marc D. Isaacs I. INTRODUCTION The subject of damages, interest and costs is far too extensive a topic to adequately cover in any one conference paper. Entire books and chapters of learned treaties have been devoted to the subject. This is an attempt at only a thumbnail sketch. The basic principle of Canadian law of damages is restitutio in integrum, or the principle that the plaintiff should be put into the position that it otherwise would have been in, had the breach of contract or the tort not occurred. Surrounding this general principle are numerous other rules that relate to the ability to prove or restrict the amount of damages which are recoverable. The plaintiff's loss must not only be provable in terms of causation and quantum, but it also must be a direct and foreseeable consequence of the defendant's actions. The plaintiff is also obligated to act reasonably to mitigate its loss. Apart from the rules relating to the quantification of damages, there are also restrictions on the amounts that claimants may recover. These restrictions include statutory limits for certain types of claims (for example, auto injury claims in certain Provinces), Court imposed limits on certain types of damages or a "cap" and package limitation in transportation law under certain Conventions such as the Hague-Visby Rules (marine) or the Warsaw Convention (air). In addition to the monetary award for damages, claimants are also generally entitled to pre-judgment interest on their damages as well as some compensation for the legal expenses incurred in prosecuting a claim, known as "costs". Partner, Strathy & Isaacs, Toronto, Ontario.
This paper will endeavour to briefly touch upon two of the most common types of claim faced in the transportation industry, being claims for third party liability, such as personal injury claims, and cargo damage claims. The claims of workers in the transportation industries are not included, as those claims, for the most part are governed by provincial workers' compensation regimes. II. PERSONAL INJURY CLAIMS Personal injury claims are a source of an increasingly significant amount of litigation and damage awards are becoming increasingly larger as counsel become more sophisticated in presenting both the breadth and the depth of the damages sustained by injured plaintiffs. The Courts have seen a recent trend in the ability of counsel on behalf of plaintiffs to present claims in a more sympathetic and persuasive fashion. This has increased the overall value of the claims as well as the heads of damages which are being sought, particularly in those claims previously considered only to be non-pecuniary are now being viewed and compensated in a pecuniary light. A) Non-Pecuniary General Damages Non-Pecuniary General Damages are those damages which are awarded by the Court for the intangible losses suffered by the victims of a tortfeasor. These are referred to as "non-pecuniary" in the sense that while monetary compensation is awarded, it is compensation for losses which do not have a financial calculation or source (i.e. pain and suffering, loss amenity of life etc.). These damages are also referred to as "general" damages in that they require a judicial assessment of their value. This is in distinction to "special" damage claims which have a known quantified amount (i.e. a medical bill). The Non-Pecuniary General Damages are only one of the overall aspects of the personal injury damages award. In contrast to many American jurisdictions, Canadian Courts have not traditionally awarded significant sums on account of Non-Pecuniary General Damages. Generally, the 2
awards for Non-Pecuniary General Damages are low, with the upper end of these damages, in the worst and most severe injury cases, being in the range of $300,000.00. The Supreme Court of Canada, in 1978, put a "cap" or "upper limit" on Non Pecuniary General Damages of $100,000.00 1. (Actuarial evidence is used to determine the present value of $100,000.00 in 1978 dollars to a modern equivalent roughly in the range of $300,000.00). The Supreme Court of Canada has recognized that no amount of compensation can provide "true restitution" and that the monetary evaluation of nonpecuniary losses is a "philosophical and policy exercise more than a legal or logical one" 2. The Supreme Court did leave open a small window for damages to exceed the "upper limit" in "exceptional circumstances" 3, although there have been very few cases which have successfully gone beyond the so-called upper limit. The award for non-pecuniary general damages covers all factors such as pain and suffering, loss amenities of life, loss of expectation of life and the other non-financial effects that a personal injury may have on an individual. The other components of the damage award are on account of pecuniary losses. Arguably, because of the aforementioned "cap" on Non Pecuniary General Damages, and the creativity of counsel, the Courts have been more receptive to evidence in support of financial losses. B) Special Damages Special damages are typically the expenses incurred by the injured victim, which are actual out-of-pocket incurred expenses or losses. These would include such things as medical expenses, transportation expenses to therapy appointments or other direct capital outlays. These claims are easily quantifiable as the claimant can produce a receipt or documentation in support of these claims. These claims require no judicial interpretation or assessment as to their quantum. While there may be argument as to the necessity of the expenses or the reasonableness of the cost, the expenses are prima facie recoverable once proven to relate to the loss. 1 Andrews v. Grand & Toy Alberta Ltd., [1978] 2 S.C.R. 229. 2 Ibid. 3 Ibid. 3
C) Loss of Income Claims Loss of income claims are typically divided into past and future loss of income. Loss of income claims are also sometimes referred to as "special damages" claims, however, that term is only really applicable to a past loss of income claim that is easily provable and quantifiable. Most past loss of income claims require a judicial assessment as to whether the loss of income was a result of the injury sustained and the extent of the past loss of income. As well, a future loss of income claim requires a judicial assessment or prediction as to the amount of loss that the plaintiff is likely to incur into the future. Typically, loss of income claims are proven through the use of Income Tax Returns, confirmation of employment and income from employers and business records in the case of the self employed individual. Frequently, there a cases of individuals claiming amounts for loss of income which has not been reported on their Income Tax Returns, for various reasons. It remains open to a Court to determine the individual's actual preaccident income and the loss that they sustained. The failure of a plaintiff to income taxes is a matter of credibility when assessing the quantum of pre-accident income. In cases where the Tax Returns are incomplete or inaccurate, creative counsel have been able to prove the claims by way of bank records as well as reconstructing an individual's monthly expenses and by using statistical information as to cost of living and average income of various occupations. Future loss of income, like all future losses, do not have to be proven to an absolute certainty. Future losses, whether it be loss of income or medical expenses, can be proven by the plaintiff on the balance of probabilities that there is a "real and substantial risk or possibility" 4 of the loss being incurred. A Court will exclude from consideration remote, fanciful or speculative possibilities but once the plaintiff establishes that there is a real and substantial possibility that they will incur a future loss, it becomes compensable. The quantum of damages may be discounted on account of risk factors or contingencies which make the future possibility less likely to occur. 4 Schrump v. Koot, (1977), 18 O.R. (2d) 337, (C.A.). 4
D) Future losses and Present Value Future losses are also subject to a present value determination. This serves to reduce the overall lump sum award for which a defendant may be liable. Typically, the defendants will retain an actuary or economist to give opinion evidence as to the present value factor or multiplier of a future damage award. Some Provinces, such as Ontario, have a stipulated "discount rate" 5 to be used when calculating the value of future awards, making it a relatively straightforward mathematical exercise. In any event, the present value of future losses is a matter to be proven by expert evidence and is routine in large loss cases. E) Health Care Expenses In Canada, health care is subject to nationalized health insurance provided by the Provincial Governments. In injury cases, the Provincial health care provider may have a subrogated claim and be entitled to claim for the cost of health care expenses incurred by the plaintiff. This also includes claims for anticipated future health care expenses which may be incurred by the Government funded system. The extent of the Provincial health care insurers' rights will vary depending on the Provincial legislation. In Ontario, for example, the Ontario Ministry of Health does not have a subrogated claim in most motor vehicle accidents. In other cases, where the provincial Ministry does have the right to advance a subrogated claim, any settlement of the plaintiff's claim would not be binding on the Ministry of Health without its consent 6. In other words, the unwary defence counsel can settle a claim with an injured plaintiff and the tortfeasor can later be subject to a further claim directly from the Ministry of Health for health care expenses. In major catastrophic loss cases the Ministry will also claim for future anticipated health care costs. The Ministry also has the right, and occasionally exercises it, to appoint its own counsel for its interests. The injury claimant will also seek future anticipated costs, on a present value basis, of those expenses not covered by the provincial health insurance. 5 Ontario Rules of Civil Procedure, Rule 53.09. 6 Health Insurance Act, R.S.O. 1990 c. H-6, s.34. 5
This, along with future loss of income, can often form the largest part of an overall damage award. F) Other Types of Losses The heads of damages for which compensation is available is not closed and is only as limited as counsel's imagination. In recent years there has been a trend for the Courts to be more willing to accept economic evidence and consider claims which were previously considered only in the non-pecuniary realm to be pecuniary claims. Arguably, this is a result of two driving factors, being the Supreme Court's upper limit on the availability of Non-Pecuniary General Damages as well as the improved ability of lawyers representing plaintiffs to consider and present claims in a pecuniary fashion. Two of the increasingly frequent examples are damages for "loss of competitive advantage" and "loss of opportunity for an inter-dependent relationship" 7. Both can be construed in a nonpecuniary way, however, in their pecuniary form these damages become compensable apart from the "cap". A claim for loss of competitive advantage is based on the theory that the injured plaintiff who returns to work is now limited in their ability to earn income, although not in a mathematically calculable way. For example, a plaintiff that returns to work in a parttime capacity will be able to prove a distinct future loss of income claim based on a reduced number of hours over a remaining work life expectancy. However, those that return to the workforce on a full-time or near full-time basis may not be as able to prove a future loss of income claim. In the loss of competitive advantage theory, it is argued that the plaintiff is no longer the "eager go-getter" or is viewed somehow as "damaged goods" in the employment marketplace. This in turn equates to the inability of the plaintiff to receive promotions and pay raises, makes him/her more vulnerable to layoffs and periods of unemployment which in turn translates to some form of economic loss in the course of his/her remaining lifetime. The Courts have been prepared to accept such theories, when backed with appropriate evidence, usually from economists. The damages are not made 7 See e.g. Walker v. Ritchie, [2005] O.J. No. 1600, (C.A.). 6
in a mathematically calculated way like a future loss of income claim, but is a lump sum similar to non-pecuniary damages. Just as the Courts are compensating for the immeasurable pain and suffering, the Courts are also compensating for the immeasurable detrimental effects that the injury has on the ability to earn an income. The next emerging area of personal injury damages is the "loss of opportunity for interdependent relationship", previously known as "loss of marriageability". This is the theory that reflects the concept that a catastrophically injured person is less likely to have a life partner/spouse compared to a non-injured person. This claim is typically only presented in the very severe catastrophic injury cases. There are plenty of experts that can provide the statistical foundation for the theory that a severely injured person is unlikely to have a long-term life partner relationship. The lost enjoyment of having a long-term relationship is a non-pecuniary loss, which is compensated for within the rubric of the Non-Pecuniary General Damages. However, Canadian courts are prepared to take the next step to a pecuniary claim associated with the loss of an interdependent relationship. There are economic experts that will testify that the cost of living as a single person is more expensive than living as a couple. Couples in inter-dependent relationship are able to share the costs of housing, food, transportation and other basic expenses. Because the plaintiff has lost the opportunity to have an inter-dependent relationship, they will incur more basic ordinary living expenses over their remaining lifetime. This is considered to be a result of the tort feasor's actions and the Courts are willing to award a lump sum as this amount cannot be quantified with exact precision. G) Limitation of Damages There are certain instances where the damages to which a plaintiff may be entitled are limited or reduced. One notable example is the "cap" on Non Pecuniary General Damages as indicated above. However, that is not so much a limitation on the recoverability of damages as it is the law relating to the quantification of damages. As for the limitation on the recovery of damages, some Provinces have statutes which restrict recovery in certain cases. A clear example is the Province of Ontario which severely 7
limits the amounts that plaintiffs can recover in automobile accidents. This includes truck transportation accidents. The Province of Quebec also has a strict "no fault" regime which eliminates tort suits in motor vehicle accidents. Motor vehicle law is a subject unique to each Province and is a very in depth subject matter within each Province. In marine accidents there is an overall limit on the recoverability of personal injury damages, depending on the size of the vessel involved. In 1998 Canada gave effect to the 1976 London Convention on the Limitation of Liability for Maritime Claims as part of its national law. The Convention is now part of Canada's Marine Liability Act 8. This permits the owners and operators of a vessel to limit its liability based on the tonnage of the vessel. The Supreme Court of Canada has held that pleasure craft operating on inland waters, whether connected to a body of water used for international shipping, or not, is governed by Federal maritime law and includes the limitation of liability provisions 9. In addition to inland waterways and pleasure craft being subject to the 1976 Limitation of Liability Convention, Canada has also enacted a fixed limitation of liability for vessels of less than 300 gross tons. This includes the vast majority of pleasure craft. The maximum liability of an owner and operator of a vessel less than 300 tons is $1,000,000.00, except where the act is committed "with intent to cause such loss or recklessly and with knowledge that such loss would probably result" 10. This limitation includes all claims arising out of a single incident, regardless of the number of claimants or the quantum of their provable damages. In a multiple severe injury scenario, which is not uncommon in a pleasure craft collision, the $1,000,000.00 limit can be vastly inadequate to meet all claims. With respect to the liability for fare paying passengers on commercial vessels, Canada has enacted the Athens Convention relating to the Carriage of Passengers and their 8 S.C. 2001, c.6. 9 Whitbread v. Walley, [1990] 3 S.C.R. 1273. 10 Convention on the Limitation of Liability for Maritime Claims, Article 4; found in Schedule I to the Marine Liability Act. 8
Luggage by Sea, 1974 which limits liability for death or personal injury to 175,000 Special Drawing Rights with the International Monetary Fund per passenger 11. III. CARGO DAMAGE A) General Rule The principle of restitutio in integrum is the general rule for the measurement of damages in the cases of cargo loss 12. This is also subject to other rules relating to recoverability of damages, the duty to take reasonable steps to mitigate losses and limitation of liability provisions in transportation contracts and relevant statutes. In general, only those damages that are direct and foreseeable as a result of the breach of contract to carry the cargo or the negligence in the handling of the cargo are recoverable. Canadian law applies the propositions laid down in the historic case of Hadley v. Baxendale 13. To be recoverable, damages must either arise naturally from the breach of contract, or in other words, those damages which a carrier would know or should reasonably be expected to know would arise from the breach of contract or be the result from some special circumstance peculiar to the cargo interests, and which was communicated to the carrier at the time of the contract. If there are special or extraordinary circumstances that the cargo interest will suffer should the contract of carriage be breached (i.e. the loss of a particular market or an extraordinary downtime to a factory while it waits for a part) and those circumstances are not communicated to the carrier, they would not be considered to be naturally arising or a direct and foreseeable result at the time that the contract was made. Thus, if the cargo must be delivered by a certain time to meet a certain market, then that must be expressly communicated to the carrier for exceptional damages arising out of a delay to be properly recoverable. In theory, this would give the carrier the option of either choosing to decline to carry the cargo or accepting it for a higher fee. 11 This currently equates to approximately $287,000.00 CDN. 12 William Tetley, Marine Cargo Claims, 3rd Ed., Blais Publications 1988, Chapter 13. 13 (1854), 9 Ex. C. 341, referred to in Tetley, op. cit. 9
With respect to physical damage to the cargo itself, the object of the quantification of damages is to put the claimant back into a position, financially, that it would have been in before the loss occurred. The most commonly employed method of determining damages is to take the Arrived Sound Market Value of the goods at the time in which they should have been delivered and deduct the Arrived Damaged Market Value of the goods on their arrival 14. Again, this is a basic rule, with numerous exceptions and nuances to make the damages fit into the basic proposition of making the plaintiff whole without generating a windfall. For example, if the cargo can be repaired, then the repair costs, assuming they do not outweigh the value of the cargo, would be the proper measure of damages. The Courts have also held that where a cargo which is completely lost is easily replaceable, then the damages will include the cost of replacing the cargo, but only one element of profit by the shipper is recoverable. In other words, the shipper may ship two sets of the cargo, (the one which becomes originally lost and then one to replace it), but is only entitled to the profit margin of one shipment 15. The damages would be the cost of production for 2 shipments, shipping and handling for 2 shipments, but profit for one, only. This makes logical sense as that is all the shipper would have received had the loss not occurred. B) Freight, Taxes and Other Expenses In addition to the value of the cargo which is actually lost, the value of lost freight on goods not delivered as well as customs duties, taxes and other expenses are recoverable. It is common to also include claims for survey expenses and salvage advice as heads of damage in the cargo claim since these expenses would not have been incurred but for the breach of contract or the negligence in handling the cargo. At the same time, any salvage or recovery must be deducted for the credit of the carrier. 14 Redpath Industries Ltd. v. The Cisco, [1992] F.C.J. No. 526 aff d [1994] 2 F.C. 279. 15 Connaught Laboratories Ltd. v. British Airways, [2004] O.J. No. 2445. 10
C) Delay Generally, where the cargo is not physically damaged, but is only delayed in the delivery to the consignee, then a loss of market type claim is only recoverable if there was a specific undertaking to deliver the cargo by a certain date or if the carrier knew or was expected to know the circumstances of the delay, as per the rules in Hadley v. Baxendale. Other losses, such as the loss of business and reputation are also only recoverable pursuant to the rules of Hadley v. Baxendale, meaning that it such consequences must be known to the carrier or within the reasonable expectation of the carrier at the time of contracting. More interesting questions arise when the cargo is damaged and can be sold for salvage, but such sale is prohibited due to commercial reasons, such as exclusive distributor arrangements. What then becomes the true measure of the plaintiff s loss? D) Limitation of Liability The recoverability of damages will also be subject to any provisions in the transportation contract limiting the carrier's liability. In Canada, there are statutory limitation of liability amounts for truck, sea and air carriage. With respect to truck transportation, the Carriage of Goods Regulation 16 under Ontario s Highway Traffic Act 17 (which were formerly part of the Truck Transportation Act) limit the liability of a truck carrier to $2.00 per pound on the total weight of the cargo carried. (Other provinces have similar legislation). There is some case law which suggests that if the motor carrier fails to issue a bill of lading which properly conforms to the requirements of the statute, then it cannot rely on the limitation of liability 18. Likewise, there are cases which suggest that if all parties to the transaction are sophisticated commercial parties familiar in transportation contracts, then the carrier may rely on the 16 O.Reg. 643/95. 17 R.S.O. 1990, c. H-8. 18 See e.g. Corcoran v. Ehrlick Transport Limited (1984), 46 O.R. (2d) 225 (C.A.) and Vandenbrink Farm Equipment Inc. v. Double-D Transport Inc., [1999] O.J. No. 2302 (S.C.J).. 11
limitation in any event 19. The latter point makes reasonable commercial sense based on the expectation of the parties at the time of contracting. It would be opportunistic for a cargo interest (usually an insurer) to recover significantly more than what it may otherwise be entitled to because of a minor document failure, when the reality is that all parties had an expectation of the limitation of liability in the first place. While in a true commercial setting the courts seem to have a greater willingness to uphold a limitation of liability, there have also been cases where the courts will not enforce a limitation. The trend in these cases is appears to lean towards the homeowner or inexperienced shipper who does not regularly deal in transportation contracts 20 when seeking to avoid their harsh effects. The Ontario Court has developed a line of authority to avoid limitation where the limitation of liability is found to be "unconscionable" 21. The definition of "unconscionable" is impossible to define with precision although the Courts will generally be looking for something which is fundamental to the expectations of the parties. For example, where the owners of household goods were assured that their property would be kept secure at all times, but the goods were stolen when the trailer was left out unsecured and unsupervised on a city street, and was subsequently stolen, the Courts found the reliance on the limitation of liability to be "unconscionable". Likewise, the Courts have been willing to not apply limitation of liability provisions in cases of theft of the cargo by the carrier or its employees 22. This is also a reasonable exception to limitation only the carrier can control the actions of its employees and the shipper is obligated to trust the carrier in the selection of its employees. Furthermore, the carrier should properly bear the risk of an internal theft, not an innocent shipper. With respect to marine transportation, Canada has adopted the Hague-Visby Rules into its national legislation (the Marine Liability Act) and cargo damage is subject to the limitation of liability regime set out therein. Cargo claims are also subject to the 19 M.A.N. B&W Diesel v. Kingsway Transports Ltd. (1997), 33 O.R. (3d) 355. 20 e.g. Solway v. Davis Moving & Storage (2002), 62 O.R. (3d) 522 (C.A.), or Corcoran, above cited, which dealt, respectively, with a shipment of household personal effects and show horse purchased by a man unfamiliar with shipping goods. 21 See Solway. 22 Punch v. Savoy s Jeweler s Ltd. (1986), 54 O.R. (2d) 383 (C.A.) and Davis v. Robertson, [2000] O.J. No. 1712 (SCJ). 12
numerous rules of liability and carrier exoneration of that convention, before the issue of damages arises. Assuming a carrier is liable, the Hauge-Visby Rules restricts the cargo claimant to a package limitation of 2 S.D.R. s per kilogram of damaged goods or 666.67 S.D.R. s per package or shipping unit 23. In terms of international carriage of goods by air, Canada s governing legislation is the Carriage by Air Act 24. This statute adopts the Warsaw Convention with respect to the carriage of goods and damage claims. Article 22(2) of that Convention limits the carrier s liability to the sum of 250 Francs per Kilogram, which after conversion into S.D.R. s, amounts to 16.58 S.D.R. s per kilo or $27.19 (CDN) per Kilogram. Article 25 of the Convention denies the carrier the ability to relay on the limitation where the loss is the result of the carrier s willful misconduct. IV. PUNITIVE DAMAGES Punitive damages are not a common and regularly awarded head of damages under Canadian law. The Canadian Supreme Court has considered punitive damages and has held that in order for an award of punitive damages to be made, the conduct in question must form an "independent actionable wrong" 25. This is not to mean that it requires an independent tort, but it can be a breach of a distinct and separate contractual provision or other duties such as a fiduciary obligation 26. The Supreme Court of Canada has held that punitive damages are the exception rather than the rule; should only be imposed where there has been highhanded, malicious, arbitrary or highly reprehensible misconduct that departs to a marked degree from ordinary standards of decent behaviour; should be reasonably proportionate to the harm caused and the degree of misconduct and several other factors which limit the availability and the amount of punitive damages to be 23 At current rates an S.D.R. is worth $1.64 CDN or $1.48 USD, This means that the carrier s liability is limited to $3.28 (CDN) per kilogram or $1.49 per pound. Alternatively this amounts to $1093.34 (CDN) per package. 24 R.S.C. 1985, C.-26. 25 Vorvis v. Insurance Corporation of British Columbia, [1989] 1 S.C.R. 1085. 26 Whiten v. Pilot Insurance Company, [2002] 1 S.C.R. 595. 13
awarded 27. Most commonly, the issue of punitive damages arises in first party insurance litigation where an insured person is suing his/her insurer over the denial of a claim. The insured will allege that the insurance company acted in "bad faith" when evaluating and denying the insured's claim. There have been very limited incidents of punitive damages being awarded in a tort/negligence context. When punitive damages are awarded in a tort context, generally it is in connection with an intentional tort such as an assault or similar morally reprehensible conduct. V. INTEREST In addition to compensatory damages, a claimant is entitled to pre-judgment interest as a part of the overall award of damages following a trial. Interest actually comes in two forms, pre-judgment and post-judgment interest. The Provincial statutes governing the Court proceedings in each Province provide for pre-judgment interest, usually setting a specified rate per quarter. The amount (both in terms of the length of time) and the percentage of the pre-judgment interest that can be awarded also remains in the discretion of the Court. In Ontario, Non Pecuniary General Damages receive a fixed 5% prejudgment interest rate. Damages other than Non Pecuniary General Damages are subject to a rate which is usually reflective of prevailing commercial interest rates and are set in the Rules of Civil Procedure and published each quarter. Pre-judgment interest typically runs from one of three points in time: being the date when the claim arose; the date in which notice of intention to sue was given by the plaintiff; or the date that the Statement of Claim was served. In most personal injury cases, prejudgment interest runs from the date that the accident occurred or the particular expense was incurred for special damages. With respect to cargo claims, pre-judgment interest generally runs from the date of delivery or intended delivery if the cargo was lost. As a matter of Canadian Admiralty law pre-judgment interest is part of overall compensatory 27 Whiten, supra at paragraph 94. 14
damages in an effort to make the claimant whole. The pre-judgment interest forms part of the overall amount that is subject to limitation of liability, when applicable. VI. COSTS Canada maintains the English costs rule, meaning that the successful party is entitled to its reimbursement of some of its legal expenses incurred at the conclusion of the litigation. Costs are also awarded at various interlocutory steps, such as after a motion. Costs always remain in the discretion of the Court and can be awarded or denied to a party based on their conduct in the course of the litigation. Costs are broken down into two scales, one being partial indemnity costs (also previously known as party and party costs) and the other being substantial indemnity costs or (also previously known as solicitor and client costs). The various Provincal Courts as well as the Federal Court of Canada have established "tariffs" which are guidelines for those steps in a lawsuit which attract costs and the amount of costs that can be awarded. Typically, costs follow the event, meaning that if a party is successful at trial or in another pre-trial procedure, they will receive their costs. In most jurisdictions, the failure to accept an offer to settle, which turns out to be as or more favourable than the outcome of a hearing or trial, will result in the party being denied a portion of its costs or having to pay costs on a higher scale, as the case may be. With the increasing cost of litigation generally, the issue of costs, and whether offers to settle should be accepted in light of a potential costs award can often drive settlement decisions. 15