Simon looking earnest in Preveza, Greece
Simon Shields, LLB

Advising Self-Representing
Ontario Litigants
Since 2005

tenant / small claims / welfare (ontario works) / odsp / human rights / employment / consumer /
collection agencies / criminal injuries compensation / sppa (admin law)
/ line fences / animal cruelty / dogs & cats / wild animal law (all Canada) / war / conditions of guide use

home / about / client testimonials / areas of practice / about self-representation

Your
Self-Representation
Service Options

Simon Shields, LLB




























Small Claims Court (Ontario) Law
(01 January 2015)

Chapter 13 - Settlement


  1. Overview
  2. Settlement Terms
    (a) Overview
    (b) Performance
    . Overview
    . Non-Monetary Performance
    . Monetary Performance
    (c) Releases
    . Overview
    . Tucci Construction v Lockwood
    . Release Included in Offer or Settlement Document
    (d) Default
  3. Offer and Acceptance
    (a) Overview
    (b) Mechanics of Offer/Acceptance
    (c) Drafting Offers and Acceptances
    . "Conditional Acceptances"
    . Contents of an Offer and an Acceptance
    . CAUTION
  4. Minutes of Settlement
  5. Settlement and the Court
    (a) Overview
    (b) Unaccepted Offers
    (c) Advising the Court of Settlements
    (d) Settlement of Part of Proceeding Only
  6. Settlement Where Party "Under Disability"
  7. Cost Consequences of Refusing a Reasonable Offer
  8. Satisfaction of Settlement
________________________________________
Note:
For "Settlement Conferences", see Ch.11: "Pre-trial Proceedings: Settlement Conferences".

1. Overview

This chapter deals with the mechanics and terms of "settling" a proceeding, thus avoiding the need for a trial.

It also deals with the cost consequences of refusing to accept offers that in hindsight turn out to have been reasonable, a method the courts have developed to encourage settlements (see the section below "Cost Consequences of Refusing a Reasonable Offer"). The courts also encourage settlement by bringing the parties together in supervised settlement conferences where they are encouraged to openly and frankly discuss the case prospects (see Ch.11: "Pre-trial Proceedings: Settlement Conferences").

There is a common misconception amongst non-lawyers (and even some lawyers) that all settlement documentation is somehow "standard issue" and merely a formality to be signed and filed away. This is quite wrong. Think of a settlement, regardless of form, as a contract. It should always be done in writing and its terms should be certain, specific and complete. Unless it is flawed by poor drafting or unforeseen external circumstances - it is a done deal and should be honoured by the court like a contract.

There are two main "techniques" or styles used to settle a case: firstly by the exchange of written "offer" and "acceptance", or secondly by the joint execution (signing) of written "minutes of settlement" (there is now a court form for this: "Terms of Settlement", see below). Generally, the Small Claims court Rules operate in terms of "offer/acceptance", while the use of "minutes of settlement" tends to be a practice amongst lawyers.

Sometimes these techniques are mixed together, particularly by lawyers who want further executed "minutes of settlement" and/or "consent judgments" after an offer and acceptance have been entered into. Such complications can be confusing and risky for unrepresented parties, and are discussed in the sections on "Offer and Acceptance" and "Minutes of Settlement", below.

Regardless of the type of settlement process used, the terms of a settlement need to be in writing and need to address a number of key common sense issues to ensure that the matter is truly "settled". These are discussed below in the section "Terms of Settlement".

There is much to be said for settlement: avoiding expense, time loss, and stress. Reasonable people should explore this possibility fully. However Small Claims cases often involve people not inclined to be reasonable, being "grudge matches" between people who may have had a close working or other relationship beforehand. In such a case settlement is more than a matter of money and terms, it is a matter of allowing each of the parties to save "face". In such situations treating the other side with respect - avoiding pointless digs and comments, and resisting the temptation to respond to them - will go a long way to facilitating settlement.


2. Settlement Terms

(a) Overview

Typically, the following terms should be addressed in any settlement:
  • Performance
  • Release/s
  • Default
On some of these issues (as discussed below in the section "Offer and Acceptance") the Small Claims court Rules establish automatic outcomes on when a case is settled by means of offer and acceptance. Parties need to be familiar with these Rules.

(b) Performance

. Overview

"Performance" refers to the acts that must be performed by the parties to finalize a settlement.

Keeping in mind the point made earlier that settlements are contracts, parties should keep in mind the principle of contract law: "promises are consideration". That is, the making of a promise of future performance is as adequate "consideration" to make a binding contract (or settlement) as is actual and immediate performance.

For instance, settlement terms requiring a party to make payment of $1,000 "within six months" only requires promised performance, but make a binding settlement nonetheless. On the other hand, settlement terms requiring immediate receipt of an immediately-negotiable certified cheque for $1,000 - received simultaneously with a returned acceptance document call for actual and immediate performance. Obviously the immediate payment is more satisfactory for a party as otherwise they might be exchanging one promise (which they initially sued on) for another promise (probably for a lesser amount of money).

The Small Claims Rules address this problem to some extent (see "FORM OF PAYMENT", discussed below.

. Non-Monetary Performance

"Performance" is usually money payment (or a promise of same) in an amount within the monetary jurisdiction of the Small Claims court, either in lump sum or periodically.

Occasionaly however a party may wish for a non-monetary element in settlement such as an apology, return of property or other acts. Unrepresented parties should be careful with such requests as the Small Claims court can only enforce settlement terms that are within its remedial jurisdiction (see the chapter: "Jurisdiction"). These are money payments for up to $25,000 or recovery of personal property to that value. So if such non-monetary things are desired in a settlement then special attention is merited.

Keeping in mind the distinction made above between promised performance and immediate performance, the way of achieving performance of non-monetary acts would be state in the settlement offer that acceptance is complete on actual performance -not promised performance - of these terms. Otherwise default in performance of the these terms may be beyond the jurisdiction of the Small Claims court and may require further proceedings in another court.

Two cautionary notes are merited when seeking non-monetary performance. First, vindictive parties may try to demand settement terms which are designed to embarrass or shame other litigants. Courts dislike these and will normally do little to assist in their enforcement. Secondly, the cost rules discussed in section 7 below ("Cost Consequences of Refusing a Reasonable Offer") are primarily designed to operate on monetary settlement terms. A court faced with an unaccepted offer involving a non-monetary component (such as an apology) would likely be forced back into its discretionary jurisdiction regarding cost consequences. To the extent that the court views the non-monetary performance as unreasonable then the party requiring it can expect little sympathy from the court on this issue.

. Monetary Performance

OVERVIEW

The first thing here is to keep in mind the distinction between promised and actual performance (see the discussion above), although this concern may be dealt with by a plaintiff settling a case under the Rules discussed below in "FORM OF PAYMENT".

Otherwise, payment terms are usually fairly simple and involve payment of a fixed, lump sum amount. Other times the settlement calls for periodic payments over time which necessarily involve accepting some element of promise as a settlement term).

The key issues when setting out payment terms then are amount, date of payment, and manner of payment.

AMOUNT OF PAYMENT

The amount of monetary payment of course is a matter generated by the nature of the claims, the evidence and the inclination and means of the parties.

An essential thing to remember when thinking about settlement amount is that the parties must address not only the damage issues between the parties, but also interest, legal costs and disbursements (see the chapter "Trial") that may have accumulated to the date of the settlement. Often these amounts can be quite significant in a proceeding.

If the offer/acceptance manner of settlement is used (see section below) then the Rules automatically provide that, where the issue of costs is unaddressed, the plaintiff gets R14.05(4):
  • in the case of a defendant's offer, their disbursements assessed to the date of that the defendant's offer was served;

  • in the case of the plaintiff's offer, their disbursements assessed to the date that the acceptance was served.
That said, a settlement - in whatever form - can of course address the issue of disbursements within it and avoid the above rule. In any type of settlement, the issues of legal costs and accumulated interest should be embodied within a party's settlement reasoning and documentation. The typical way of doing this in documentation is by using the phrasing "inclusive of costs and interest" when setting out the payment duties in the settlement.

DATE OF PAYMENT

Where future payments are promised as a term of settlement, date of payment should always be addressed - even where only a lump sum is involved. Complicated date structures (ie. periodic payments) can be addressed in a written schedule, with dates and amounts addressed in detail.

In any case, be careful that your settlement offer specifies the dating (ie. negotiability date) of the negotiable instrument/s (ie. cheque or money order) to ensure that you are not fobbed off with post-dated cheque/s. Including in the offer a phrase that "all instruments must be immediately negotiable when due and tendered" should suffice for this purpose. Of course, it is common and acceptable to receive a series of post-dated cheques - negotiable AT the due dates - as a convenience for both parties where terms call for periodic payments.

FORM OF PAYMENT

It is common for lump sum payments to be made by certified cheque or money order, whereas periodic payments are made by regular cheque. Cash is rarely a wise form of payment as it leaves no proof of payment record.

If a defendant makes an offer to settle the case for the payment of money, the plaintiff may accept the offer and unilaterally add a provision that such payment be made into court [R14.05(3)].

Similarly, where a plaintiff offers to settle a case by the payment of money from the defendant, the plaintiff may include in the offer a condition that the defendant pay the money into court. In this case the Rules provide that such an offer may only be accepted by actual payment into court and notification to the plaintiff of the payment [R14.05(2)].

(c) Releases

. Overview

A release is a promise, or exchange of promises, by the settling parties, as to what claims between them are being settled. Any settlement should include a written statement that the parties grant each other full (or partial, as the case may be)release of liability from all (or specified, as the case may be) claims alleged in the proceeding.

. Tucci Construction v Lockwood

This may seem so obvious that it doesn't require stating expressly in a settlement -but it does. In M Tucci Construction Ltd v Lockwood [2002] O.J. No. 440 (Ont CA) despite the settlement of a small claims action the same plaintiff brought a later similar action against the same defendants. The defendants claimed res judicata (that the action was barred as having been previously resolved). While commenting that in fact there may have been a new and separate cause of action advanced in the most recent proceeding, the court ALSO dismissed the defendant's argument of res judicata because - while there had been a settlement - there was no judgment of the court nor release of liability exchanged between the parties. While this very formalistic ruling that places a surprising burden on Small Claims litigants, the case is strong authority for the proposition that a settement should be either (1) embodied in a consent judgment of the court or (2) be tied down by the exchange of written releases of liability between the parties - or both.

While this additional "release" is standard in Superior Court practice with its use of minutes of settlement, the wisdom of their requirement in Small Claims court is dubious given the further procedural duties and tasks this imposes on often unrepresented litigants. Release documents alone - at least as drafted by most lawyers - are extensive, complicated documents that often try to ensnare a party into overbroad liability releases and obscure third party indemnities. Nonetheless, Tucci is a Court of Appeal case and as such clearly binding on Small Claims court practice.

. Release Included in Offer or Settlement Document

Short of getting involved in these additional and often confusing procedures, unrepresented parties would be smart to include in the text of their offer/s some phrasing to the effect that:
The parties hereby agree to release each other from any and all claims set out in and related to this
proceeding.
Note in particular that the new (01 July 2006) "Offer to Settle" (Form 14A) and "Terms of Settlement" (Form 14D) forms DO NOT include within their text such releases, and they should be added by the parties as specific terms of the offer and/or settlement.

Common sense modification may be required where there are multiple claims (ie. Defendant's claim) involved - or where the parties only wish specified claims to be settled, with the balance to go to trial for judgment. Whenever anything other than a full release is sought, special care must be taken to set out in the offer clearly which claims are being settled and which are not.

Including a properly-drafted release in an offer should, when the offer is accepted, give the degree of security and finality to the settlement that most people expect, and that the court in Tucci requires.

(d) Default

Where a settlement involves promises of future performance, the issue of "default" arises. That is, what happens if the other party does not comply with their settlement promises?

Where the offer/acceptance method is used, if the terms of an accepted offer are violated the court will allow the offended party the options of either converting the settlement terms into an enforceable judgment (on motion), or continuing the proceeding as though no settlement was made [R14.06].

Typically, default is proven by filing with the court an affidavit setting out the default by the other party. If the court has not been previously advised of the settlement terms (eg. by the filing of the offer and acceptance or other settlement documentation) then such additional documentation should also be included in the affidavit to give the court the background it needs to either make the enforcement order or to justify setting the matter back down for trial.

Sometimes parties will try to incorporate "penalty clauses" in a settlement, such that in the event of default (often a very slight default) the amount of money due increases automatically - usually quite significantly. It is a general principle of contract law that the courts will not enforce such "penalty clauses" or that they will only enforce them to the extent that the amount of the penalty constitutes a "reasonable pre-estimate" of the actual damages that are caused to the party by the default. The law of penalty clauses is more extensive than this, but that is generally what it holds.


3. "Offer" and "Acceptance"

(a) Overview

If done with proper attention to detail, the offer/acceptance method of settlement -which involves the exchange of separate documents [offers to settle, acceptances and withdrawals must all be IN WRITING: R14.01.1(1)] between the parties - is simpler for unrepresented parties, affords them much more control over the process, and avoids the complexities of the "minutes of settlement" method of settlement, discussed below.

Further, the offer/acceptance method of settling a case invokes a number of automatic rules regarding the settlement process, and as well invokes the cost consequences (discussed below) on refusal of a reasonable offer.

(b) Mechanics of Offer/Acceptance

At any time before final judgment [R14.05(1)] (even if it is after trial while waiting for a reserved judgment) a party may serve an offer to another party to settle matters between them on terms set out in the offer [R14.01, R14.03]. Similarly, any such offer may be accepted up to, but not after, the court issues its judgment in the matter [R14.03(3)].

Note however that offers served less than seven days before start of trial do NOT invoke the costs consequences discussed below (see "Cost Consequences of Refusing a
Reasonable Offer" [R14.02(2)]).

An offer may be withdrawn before acceptance by service of a Withdrawal [R14.03(1)] -or if the offer itself contains an expiry date [R14.03(2)] which has since passed IMPORTANT: time-limited offers are deemed to be withdrawn on the day AFTER the specified date). However such withdrawal or expiry will likely terminate any positive cost consequences associated with the making of the offer, which operate only if the offer is kept open until the trial commences (see s.7 below: "Cost Consequences of Refusing a Reasonable Offer").

In uncommon situations, when withdrawals and acceptances "cross in the mail", withdrawals can also involve important issues of timing and service of documents (see Ch.7: "Time Limits" and Ch.6: "Service of Documents").

As noted in the discussion above on defaulting on terms of settlement, if the terms of an accepted offer are violated the court will generally allow the offended party the options of either enforcing the settlement terms as a judgment (on motion), or continuing the proceeding as though no settlement was made [R14.06].

Also as noted in the discussion on determing the amount of a settlement, where an offer does not address the issue of legal costs as a term of the settlement, then the Rules [R14.05(4)] entitle the plaintiff automatically to:
  • in the case of a defendant's offer, to the plaintiff's disbursements made to the date of the offer being served; or

  • in the case of a plaintiff's offer, to the plaintiff's disbursements made to the date of the acceptance being served.
As noted above, because offers to settle, acceptances and withdrawals are important things, the law requires that they be made in writing [R14.01.1(1)]. As well, they should be served in accordance with the normal rules (see Ch.6: "Service of Documents") and affidavits of service prepared for use at trial at the costs issue stage (see "Settlement and the Court", below), if necessary.

(c) Drafting Offers and Acceptances

. "Conditional Acceptances"

There is a general legal (and common sense) rule that "conditional acceptances" (ie. that add new terms to an offer) do not constitute a binding settlement. This makes sense as such an "acceptance" in fact constitutes a new counter-offer, which in turn calls for a "new" acceptance.

An exception to this general rule exists when a defendant makes an offer to settle the case for the payment of money. In that case the plaintiff may accept the offer and unilaterally add a provision that such payment be made into court [R14.05(3)]. Except in this one case however, it is much safer to re-do a counter-offer in a fresh "offer" document. Thus it is that the "offer" is usually the more detailed of the two documents.

. Contents of an Offer and an Acceptance

The "guts" of any offer are of course the Terms, which are discussed at length in section 2 above "Terms of Settlement" and must be drafted by the party making the offer. These must be studied and addressed carefully (especially the Tucci case discussion).

However it is also necessary that the offer and acceptance documents contain basic indentifying information within them - and desirable they be structured in a coherent and clear manner. Until recently, the Small Claims Court Rules did not set out any particular form to be used when making offers, acceptances and withdrawals. However this was changed by amendments effective 01 July 2006 [Reg 78/06], which now provide that the following forms MAY be used [R14.01.1(2)]. Other forms of settlement documentation may also still be used, but these court forms are quite suitable for most situations:

Form 14A: Offer to Settle

Form 14B: Acceptance of Offer to Settle

Form 14C: Withdrawal of Offer to Settle

. CAUTION

Care must also be taken by unrepresented parties when receiving offers from other parties, particularly lawyers. Sometimes such offers have terms that call for the execution (ie. signing) of further documentation ("eg. release in the standard form", "minutes of settlement", etc) in supposed final settlement of the case. Such further documentation is not just a formality.

Such provisions open the door for the other side to present (effectively impose)additional terms in the settlement which are not part of the "deal" as has been understood to that point. A properly done offer/acceptance settlement should require no additional documentation being signed and exchanged.

If an unrepresented party is mostly content with the terms of an offer they have received - but has residual concerns about such clauses - they can always re-draft a new offer removing the clauses of concern and send it back to the other side.


4. Minutes of Settlement

A technique commonly used amongst lawyers in the higher courts is the "Minutes of Settlement" document. These are documents drafted by either party, typically after negotiation and perhaps the exchange of several drafts. They are executed (with copies for all and extras for the court) by the parties and should embody all the terms of the settlement, including the consequences of violation of the terms of settlement. Minutes of settlement are usually more thorough with respect to terms of settlement than offer/acceptance are, and they do not trigger the automatic Rules (discussed above) that offer and acceptance do, such as the cost consequences associated with unaccepted offers (see section 7 below).

Problems can arise however when "minutes of settlement" documents are presented to unrepresented parties by other, more experienced, parties or representatives. Typically the document is extensive and includes a number of obscure provisions dealing with "indemnities" and such like that are both confusing and - in the vast majority of cases - unnecessary.

Often the use of Minutes of Settlement is associated with an expectation that the terms of the settlement will become embodied in a consent judgment of the court, a further complexity for the unrepresented party.

Such is the expectation (some would say arrogance) of the legal profession that they will present their drafts of Minutes of Settlement and order consent forms to another party even though the matter has been already settled by use of the offer/acceptance technique discussed at length above.

If an unrepresented party has been careful and ensured that the offer/acceptance has included adequate releases of liability (see the discussion of the Tucci case, above), then there is normally no requirment that they execute these additional forms. The lawyers may have sent them out hoping that unrepresented party just thinks that they are required and signs and returns them. It is usually not to the advantage of the unrepresented party to do this as these forms normally contain additional terms favourable to the other side.

Minutes of Settlement can sometimes "sneak" into an offer/acceptance settlement. As noted above, care must also be taken by unrepresented parties when using the offer/acceptance method of settlement to avoid terms that call for the execution further documentation ("eg. release in the standard form") in final settlement of the case. These provisions open the door for the other side to present additional terms in the settlement which are not part of the "deal" as has been understood to that point. A properly done offer/acceptance settlement should require no additional documentation being signed and exchanged.

If however parties - particularly with the help of the court obtained in a settlement conference - feel comfortable in the joint drafting of a single document to contain the terms of a settlement, court rule amendments effective 01 July 2006 have provided a useful form for this purpose:

Form 14D: Terms of Settlement


5. Settlement and the Court

(a) Overview

While this section discusses settlement done in the offer/acceptance style, its principles apply to most settlement negotiations. Generally, nothing about offers or negotiations should be communicated to the trial judge until they have made their ruling on liability and damages [R14.04].

(b) Unaccepted Offers

If settlement efforts are unsuccessful and the matter is proceeding to trial, the interplay between settlement offers and costs rules (discussed below), makes it essential that no disclosure of unaccepted offers "or any related negotiations" be made to the trial judge until AFTER they have issued their judgment on the substance of the case. Therefore unaccepted offers should not be filed with the court.

Once judgment has been issued the court will address the issue of costs, and it is at this time that copies of unaccepted offers should be produced to the judge. Accompanying such offers with sworn affidavits of service will go a long way to countering any claim by the other side that they did not receive the offer.

Similarly, no mention of any other settlement efforts should be made to the judge. This is to avoid the terms of negotiations "prejudicing" the judge's mind, the theory being that knowledge of the offers gives the court some idea of how the parties weigh their chances [R14.04].

(c) Advising the Court of Settlements

The court should be advised of any settlements as soon as possible so that they can free their resources and time for other cases. There are several ways in which the court can be advised so that it knows to cancel any trial date or further proceedings.

The Tucci case indicates that the acceptance of an offer (or the execution of Minutes of Settlement) which contains a well-drafted release should be adequate to prevent re-litigation of the issues. In that case a simple letter to the court from the plaintiff advising of the settlement and including copies of the settlement documents should be adequate for the court's purposes.

As noted in the discussion of the Tucci case above, certainty can also be given to a settlement when its terms are embodied in a judgment of the court. Such a judgment would be "on consent" and provides the defence of res judicata (issue already adjudicated) should one party decide to try to re-litigate the matter. For this purpose see s.8 "Satisfaction of Settlement", below.

(d) Settlement of Part of Proceeding Only

Where only some claims are settled and the rest must go to trial, it is preferrable - for the same reasons outlined above regarding unaccepted offers and unsuccessful settlement negotiations - that the TERMS of settlement (as opposed to the fact of partial settlement and what claims are now off the table) should not come the court's knowledge until after it has adjudicated on liability and damages on the balance of issues.

Note however that typically parties and the court will not be that be sensitive to this concern, and as well that a consent judgment entered into the court record effectively "lets the cat out of the bag" on the terms of settlement. Parties should exercise their best judgment in this situation. One solution, if the documents are filed, may be to ask the court clerk to ensure that they are not given to the trial judge when the file is forwarded to them for trial preparation.

In any event, the court must be advised in writing as to which portions of the Claim have been settled and no longer require adjudication. Some courts may require that the Claim be formally amended (see the chapter: "Pleadings") to reflect this, others may be satisfied with a letter from the plaintiff. Inquire as to local practice.

When settling part of a proceeding only, it is essential that the settled claim issues be clearly delineated and described both in any settlement documents and when the court is advised. Failure to do this will likely result in a (or another)settlement conference being scheduled to clarify any uncertainty.


6. Settlement Where Party "Under Disability"

Parties to a proceedings who are "under disability" include minors (under 18 years old), absentees ("missing persons"), and those who are "mentally incapable" (see Ch.4: "Parties" for a fuller explanation of these).

Because such parties have limited abilities to assert their interests in a case, no settlement of a "claim" made by or against a person "under disability" is binding on that person without the approval of the court [R4.07]. The court's interest of course is to make sure the terms are fair and that any benefit flowing to the party under disability is properly applied to their benefit.

Such approval is sought from the court by motion of one of the parties. See Ch.12: "Motions and Procedural Changes". The burden on a court hearing such a motion is onerous and the court must fully explore the merits of the settlement, calling evidence as necessary: Poulin v Nadon [195] OR 219 (Ont CA).

Where a settlement involving a party under disability is made BEFORE a Claim is filed (and thus before a proceeding or action is commenced) it is questionable whether R4.07 applies to require court approval of the settlement. However such a settlement - perhaps even where the party under disabled is represented by counsel -would constitute a contract and be subject to challenge and rescission as unconscionable. The best procedural route in such circumstances might be to make a motion to the court (assuming appropriate remedial jurisdiction) for such approval. Note that s.1 of the Courts of Justice Act reads in part:
"motion" means a motion in a proceeding or an INTENDED proceeding;
Thus motions may be made before a proceeding is commenced. This route is also consistent with R7.08 of the Rules of Civil Procedure, which govern the practice in the Superior Court. See Ch.12: "Motions and Procedural Changes: Pre-Commencement Motions".

Note also the requirement that any settlement monies flowing to a person under disability be paid into the court, subject to distribution only on court order [R4.08(1)](see Ch.4 "Parties").


7. Cost Consequences of Refusing a Reasonable Offer

As noted above, Small Claims Court Rules have integrated settlement and cost rules to create an incentive for early settlement of cases, avoiding the need for a trial. These incentive rules are premised on parties using the offer/acceptance method of settlement.

If a plaintiff's offer to settle is made at least seven days before trial starts, is not withdrawn and is not accepted, then the court may award the plaintiff up to twice the costs of the action, if the judgment is as or more favourable to the plaintiff as the offer [R14.02(2); R14.07(1)].

If a defendant's offer to settle is made at least seven days before trial starts, is not withdrawn and is not accepted, then the court may award the defendant up to twice the costs awardable to a successful party, if the judgment is as or less favourable to the plaintiff as the offer [R14.02(2); R14.07(2)].

In addition, if the court awards a self-represented party costs under these cost consequences rules [ie. R14.07(1) or (2)], they may also award them an additional amount up to $500 for "inconvenience and expense" [R14.07(3)].

Note that these Rules say that "the court may award". This means that the court has a general discretion to disregard the application of the rule as they see fit. For a fuller discussion of "costs" principles see Ch.14: "Trial: Costs".

Remember that unaccepted offers should not be made known to the court until it has ruled on the main issues of liability and damages first. Only after judgment are offers disclosed and these cost rules applied.

While a party hoping to use these cost rules should follow the "offer/acceptance" format described earlier in this chapter, the court may take into account other settlement efforts regarding costs if it wishes. That said, most courts will not want to hear disputed "he said"/"she said" evidence on this issue, so copies of letters at least should be provided.

Further, courts do not like offers that change depending upon passage of time or external circumstances. For instance, an offer of settlement by a defendant which decreases in amount as the trial date approaches creates difficulties in applying the cost consequence rules and generally complicates matters. Courts tend to view these changes as withdrawals of previous offers, terminating the above cost consequences - which only attach "if the offer was not withdrawn and did not expire before the trial" [R14.07(1)(2)].

8. Satisfaction of Settlement

An order may be obtained confirming that a settlement debt has been paid. See Ch.16, s.6: "Collection: Satisfaction of Debts").
Lawyer License #37308N / Website © Simon Shields 2005-2017