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Episode 8: Offers to Settle

21:41
 
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Why? Toimeton syöte status. Palvelimemme eivät voineet hakea voimassa olevaa podcast-syötettä tietyltä ajanjaksolta.

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Manage episode 309160803 series 3027946
Sisällön tarjoaa The Ontario Small Claims Court Podcast. The Ontario Small Claims Court Podcast tai sen podcast-alustan kumppani lataa ja toimittaa kaiken podcast-sisällön, mukaan lukien jaksot, grafiikat ja podcast-kuvaukset. Jos uskot jonkun käyttävän tekijänoikeudella suojattua teostasi ilman lupaasi, voit seurata tässä https://fi.player.fm/legal kuvattua prosessia.

Twitter PicSHOW RESOURCES: SMALL CLAIMS COURT GUIDES

SHOW NOTES:

Welcome everyone to the Ontario Small Claims Court Podcast. I want to thank you for taking the trouble to download this episode today and I hope that I can help you in some small way.

I’m Simon Brown and this podcast comes to you via iTunes, Stitcher Radio, or by using your favourite podcast app at www.osccpodcast.ca. If you haven’t done so already, you can either subscribe to iTunes or Stitcher Radio to get the latest update from the Ontario Small Claims Court Podcast and have it downloaded automatically to your device.

In this Episode 8 of the podcast, we are going to talk about Offers to Settle.

Offers to Settle are both at once are hard to get and easy to screw up. That doesn’t mean that you should avoid them. The Rules of the Small Claims Court have rules in place that encourage settlement by giving larger costs awards to those who make an offer that is rejected by the other side. As always, certain conditions apply.

Offers to Settle are determined under Rule 14 of the Rules of the Small Claims Court and also Section 29 of the Courts of Justice Act. In a nutshell, Rule 14 says:

  1. The parties can negotiate at any time to settle a claim on terms specified in the offer;
  2. The offer to settle must be in writing;
  3. If the rules for cost consequence are to take effect, then the rejected offer must have been made more than seven days before the trial starts;
  4. Either party can withdraw an offer at any time, but it must be done in writing;
  5. An offer is considered to have been withdrawn on the day after when the date of the offer is set to expire;
  6. A settlement offer cannot be accepted after a judgment that disposes of a claim;
  7. Disclosure of settlement offers or discussions cannot be made to the trial judge until liability has been determined;
  8. An offer to settle can be accepted at any time before the offer is considered withdrawn or the court disposes of it;
  9. The plaintiff can require as a condition of settlement to pay the sum into the court;
  10. If a party fails to comply with an accepted offer, the other party may make a motion to the court for judgment in the terms of the accepted offer, or continue the proceeding as if there was no offer at all.
  11. Failure to accept a reasonable offer has cost consequences for either party; and
  12. Self-represented successful parties may be awarded up to $500 as compensation for inconvenience and expense

So, the parties can negotiate at any time. The courts love settlement offers. You should learn to love them, too, because, in my opinion, there is no down side to making honest offers to settle. If you are making offers that you know would be rejected by any right-thinking person, then you are taking your own chances there. However, I’m not asking you to just roll-over, either.

Coming up with settlement terms can be simple and straight forward and you should endeavor to keep it that way, as most Small Claims Court matters usually concern only one-issue claims. The great thing about settlement offers is that it can address issues of concern for both parties and the methods of getting to that consensus can be creative, including issues that do not directly involve money.

In writing the Offer to Settle, you can either use the forms available on the Small Claims Court Forms website, or you can write a letter that can express all of your terms and conditions. Form 14A is the pre-printed Offer to Settle form that you can use. The top part of the form is easy to fill out. Put in the court location and address along with the court file number assigned to your case. Name the Plaintiff and the Defendant. The line after that begins with, “My name is…”, and funnily enough, that is where you put your name. Paragraph 1 has the checkboxes; identify yourself as the plaintiff or defendant. Paragraph 2 starts with, “I offer to settle this action against BLANK,” and funnily enough, that is where you put in the other party’s name. The paragraph continues, “on the following terms.” Now, look at all that blank space. Lots of things happen here. And all of it is up to you.

Don’t panic. Many a writer has feared the blank page; you’re not the first one and you won’t be the last, either. Here are some suggestions to help get started:

  1. If it is settlement for a monetary amount, name the amount and who gets to pay which party. Be clear on who pays and who gets the money.
  2. Remember when you indicated on the plaintiff’s claim that you had to choose what kind of interest you would be claiming? You know, that pre- and post-judgment interest? You can indicate here whether that interest applies or not.
  3. Remember a brief discussion as to costs? Is the other party going to pay your costs such as filing fees and photocopies? It’s up to you whether they pay that or not.
  4. How long does the other party have to pay you in full? Is it a full amount within a set amount of time? If the other side can’t pay the amount all at once, can they pay in installments? How long? Three months? Six months? How much per month? Can they accelerate payments so they can pay earlier? Is the last payment less than the monthly payments? Put it in writing.
  5. Who gets paid? Is it your company? To you personally? Put it in writing.
  6. What method of payment do you want? Bank draft? Cheque? Certified cheque? E-mail transfer? Cash? Put it in writing.
  7. Do you need to exchange documents? Is there someone holding some document until payment is made? When does this exchange of documents happen? When everyone agrees? When one party is paid in full? You better get that in writing.
  8. Let’s say that it’s not just about the money. Let’s say that there is an issue over a bicycle. One party has it; the other party wants it back. When does the other party get the bike back? In what condition should the bike be in when you get it back? What happens if there is something wrong with the bike after you get it back? Will it be repaired? Will it be replaced? Is the offer dead if the bike is returned to you in pieces?

Overall, you need to think about the results that you want. You also need to think about consequences if the results you want don’t materialize. Don’t forget to number your paragraphs for easy reading and reference.

Paragraph 3 says when the offer is good for. You can give expiry dates on your offers. You can stagger your offers if you wish. You can give new offers after the old one expires, changing whatever terms wish. If it is a final offer and you know when the trial date shall be, I put this phrase in the blank, “This offer to settle is available for acceptance until one minute after trial begins on (the trial date).” The purpose of the phrase is to set a palpable deadline to the other party. It shows two things. First, the offer is the bottom line for you. Second, if the matter is not resolved, you are definitely going to trial. This final offer phrase will be important if you end up going to trial.

There are two very important bold boxes at the bottom of the second page. The first one references Rule 14.06 of the Rules of the Small Claims Court. It says to the person receiving the offer to settle that if they accept the offer and then fail to adhere to the terms of that offer, the party making the offer can do one of two things: ask for a judgment in the accepted terms by way of a motion, or proceed to trial as if the offer was never given. This is to give pause to parties that want to delay proceedings and otherwise frustrate parties acting in good faith. There are consequences to reneging on a deal.

The second bold box refers to Rule 14.04. It says that if the other party refuses to accept the settlement offer, neither side can file the offer until the trial determines the final outcome, especially when there are questions as to who is liable and how much is to be paid as damages. This is to protect the settlement conference negotiations and cannot be used as evidence at trial to say things like, “Why didn’t you accept this offer?”

Sometimes, Offers to Settle can go back and forth between the parties. How does the court deal with multiple offers? The first general rule is that when one party gives the opposing party an Offer to Settle, then gives a second offer to settle for a different amount, either higher or lower, that has the effect of cancelling the first offer. The second general rule is that when Party A sends an offer to settle and Party B does not accept the offer, but Party B provides a counter-offer to settle the matter, both offers are on the table for acceptance by the other, unless one party says that they are withdrawing the previous offer.

So, how does one accept an Offer to Settle? Again, you can use the Ontario Small Claims Court Form 14B. It’s very straight forward.

What about withdrawing an Offer to Settle? Hey, look over here! Form 14C does that for you as well. In both cases, either accepting or rejecting an offer, you can just send a letter with your answer.

If you have noticed, you will see Form 14D on the Ontario Small Claims Court Forms web page. Let’s take a closer look at that one.

This is the Terms of Settlement form that you can use. At the top, as always, is the court location and address portion, along with the court file number assigned to your matter that you will fill in. The names of the parties are to be included. Make sure that the names matches the names found on the Plaintiff’s Claim. Now, the form assumes that the Terms of Settlement is for money damages. It also assumes that the lump sum includes interest and costs. If that doesn’t apply to your case, feel free to put a windshield wiper through the offending words or lines and have each party initial the strikeout. Then there is that huge blank space again. If you have already filled out an Offer to Settle Form, then you just have to transfer that information over to the Terms of Settlement. On the last page, there are some standard terms that are already written for you.

Paragraph 2 says what happens to the court case after settlement. The claims are withdrawn, like it never happened.

Paragraph 3 says, “If a party to these terms of settlement fails to comply, judgment in the terms of settlement may be obtained

against that party on motion to the court or this action may continue as if there has been no settlement.” This is a repetition of those boxes I told you about in the Offer to Settle, just packaged into a single sentence. This paragraph reflects Rules 14.04 and 14.06 of the Rules of the Ontario Small Claims Court.

Paragraph 4 says, “Provided that the terms of settlement are complied with, the parties above fully and finally release one

another from all claims related to the facts and issues raised in this action.” This is a “no comebacks” clause. If all of the terms of the settlement have been met, then all of the parties can expect that everything mentioned in a Plaintiff’s Claim, Defence, and Defendant’s Claim have been addressed, satisfied, and that the matter is truly over and done with. If one of the parties decides to sue for the same reasons again, that’s considered a no-no. That new action will be considered as an attack against the Terms of Settlement, an agreement that was meant to finalize things. As always, there are exceptions to the rule: the first being that there was some sort of bad faith bargaining done by one of the parties; the second, a new breach that happens after the signed agreement.

After that paragraph, there is the signature block. The parties don’t have to be in the same room at the same time for the agreement. One party can sign on one day, and then the other party can sign on the next day. The important thing is that the Terms of Settlement is signed by all of the parties. Everyone gets a copy of the Terms of Settlement.

When the Terms of Settlement is signed, everyone should also sign Form 11.2A Request for Clerk’s Order on Consent. On page 3, mark the checkbox that includes confirmation that the Terms of Settlement has been satisfied. File both the Terms of Settlement and the Request for Clerk’s Order on Consent with the court office.

That sort of completes this section on when Terms of Settlement are agreed to and all of the parties, well, they don’t feel happy, but definitely relieved that their ordeal is over. But what happens when no one can agree and you end up going to trial? Did you waste time trying to settle the matter? No you didn’t. Here’s why.

Let’s remember the rules for a moment here. Take a look at Section 29 of the Courts of Justice Act first. And I quote:

An award of costs in the Small Claims Court, other than disbursements, shall not exceed 15 percent of the amount claimed or the value of the property sought to be recovered unless the court considers it necessary in the interests of justice to penalize a party or a party’s representative for unreasonable behavior in the proceeding.

Now, let’s take a look at Rule 14.07, subrule (1):

When a plaintiff makes an offer to settle that is not accepted by the defendant, the court may award the plaintiff an amount not exceeding twice the costs of the action, if the following conditions are met:

  1. The Plaintiff obtains a judgment as favourable or more favourable than the terms of the offer.
  2. The offer was made at least seven days before the trial.
  3. The offer was not withdrawn and did not expire before the trial.

Rule 14.07, subrule (2) says:

When a defendant makes an offer to settle that is not accepted by the plaintiff, the court may award the defendant an amount not exceeding twice the costs awardable to a successful party, from the date the offer was served, if the following conditions are met:

  1. The plaintiff obtains a judgment as favourable as or less favourable than the terms of the offer.
  2. The offer was made at least seven days before trial.
  3. The offer was not withdrawn and did not expire before the trial.

So, what does this all mean?

Like I said before, the Ontario Small Claims Court loves Offers to Settle. They love them so much, in fact, the court is prepared to give additional costs to a party that had a similar or better offer than what the plaintiff gets at the end of the trial. The Courts of Justice Act sets a baseline cap of 15 percent of what is claimed for costs and representation fees. The Rules of the Small Claims Court says that a Deputy Judge can raise that cap up to 30 percent of what is claimed for costs and representation fees. If you have a $10,000.00 claim, you can claim as costs up to $1,500.00 which is the 15 percent cap. If you get a judgment for $10,000.00 and have a settlement offer that is equal to or less than what you got at trial, that 15 percent cap of $1,500.00 can double up to thirty percent or $3,000.00. And, get this, you add that $3,000.00 on top of the $10,000.00 that you already have proven. That’s if you are represented by a lawyer or a paralegal. Now, the bad news. If you are self-represented, your costs can be capped to $500.00 because of Rule 19.05. Sorry. That’s just how it is. I’m only telling you this because, if the other side is represented by a paralegal or a lawyer, their cost considerations are going to be just as important to them as it will be to you. Just remember that if you lose, you might be paying more than $500 in costs, on top of whatever damages they prove.

Now, we have to take the worst-case scenario. What happens when everyone thought that there was a settlement, but one side reneges on the deal?

The party who thought that they had a deal can bring a motion to the Small Claims Court. That party will also need a supporting affidavit that says that:

  1. One side made an Offer to Settle;
  2. The offending side accepted the offer; and
  3. That the offending side breached a term of the Offer to Settle or withdrew their acceptance of the offer at some point.

Remember when I told you that Settlement Conferences are supposed to be secret between the parties? When it becomes clear that a party breaks the agreement, the first thing that the court will look at is was there an agreement in the first place? So, this is the only time when all of those negotiations open up and are presented to the court before a trial. Not an easy process.

There are two remedies that you can have when someone reneges on an Offer to Settle. The first remedy is to get a judgment in the amount that was agreed on in the Offer to Settle. Therefore, the Offer to Settle is elevated from a private agreement to a court order. Now, all of the mechanisms for court enforcement become available, like garnishment, the seizure and sale of land, and the seizure and sale of personal property. The second remedy is to throw everything out the window and request to return to the trial process. A word of warning, though: make sure you have such a strong case that there can almost be no doubt that you could win. Judges are capable of doing anything, and even the most straightforward case may end up sideways in a ditch. This is not an indictment against judges, but it can also mean that in presenting your case, you make a mistake that the judge has to right by denying your claim or defence. Also, bringing a case to trial opens up the cost consequences again. Consider yourself warned.

That wraps up this podcast. Your comments and questions are always invited. There are guides written by the Ministry of the Attorney General that are available at most Small Claims Court locations or on line at www.attorneygeneral.jus.gov.on.ca/english/courts/guides. There you will find the Guide to Getting Ready for Court.

Thank you for listening and I hope you join me again soon.

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iconJaa
 

Arkistoidut sarjat ("Toimeton syöte" status)

When? This feed was archived on September 17, 2023 00:53 (6M ago). Last successful fetch was on July 31, 2022 14:12 (1+ y ago)

Why? Toimeton syöte status. Palvelimemme eivät voineet hakea voimassa olevaa podcast-syötettä tietyltä ajanjaksolta.

What now? You might be able to find a more up-to-date version using the search function. This series will no longer be checked for updates. If you believe this to be in error, please check if the publisher's feed link below is valid and contact support to request the feed be restored or if you have any other concerns about this.

Manage episode 309160803 series 3027946
Sisällön tarjoaa The Ontario Small Claims Court Podcast. The Ontario Small Claims Court Podcast tai sen podcast-alustan kumppani lataa ja toimittaa kaiken podcast-sisällön, mukaan lukien jaksot, grafiikat ja podcast-kuvaukset. Jos uskot jonkun käyttävän tekijänoikeudella suojattua teostasi ilman lupaasi, voit seurata tässä https://fi.player.fm/legal kuvattua prosessia.

Twitter PicSHOW RESOURCES: SMALL CLAIMS COURT GUIDES

SHOW NOTES:

Welcome everyone to the Ontario Small Claims Court Podcast. I want to thank you for taking the trouble to download this episode today and I hope that I can help you in some small way.

I’m Simon Brown and this podcast comes to you via iTunes, Stitcher Radio, or by using your favourite podcast app at www.osccpodcast.ca. If you haven’t done so already, you can either subscribe to iTunes or Stitcher Radio to get the latest update from the Ontario Small Claims Court Podcast and have it downloaded automatically to your device.

In this Episode 8 of the podcast, we are going to talk about Offers to Settle.

Offers to Settle are both at once are hard to get and easy to screw up. That doesn’t mean that you should avoid them. The Rules of the Small Claims Court have rules in place that encourage settlement by giving larger costs awards to those who make an offer that is rejected by the other side. As always, certain conditions apply.

Offers to Settle are determined under Rule 14 of the Rules of the Small Claims Court and also Section 29 of the Courts of Justice Act. In a nutshell, Rule 14 says:

  1. The parties can negotiate at any time to settle a claim on terms specified in the offer;
  2. The offer to settle must be in writing;
  3. If the rules for cost consequence are to take effect, then the rejected offer must have been made more than seven days before the trial starts;
  4. Either party can withdraw an offer at any time, but it must be done in writing;
  5. An offer is considered to have been withdrawn on the day after when the date of the offer is set to expire;
  6. A settlement offer cannot be accepted after a judgment that disposes of a claim;
  7. Disclosure of settlement offers or discussions cannot be made to the trial judge until liability has been determined;
  8. An offer to settle can be accepted at any time before the offer is considered withdrawn or the court disposes of it;
  9. The plaintiff can require as a condition of settlement to pay the sum into the court;
  10. If a party fails to comply with an accepted offer, the other party may make a motion to the court for judgment in the terms of the accepted offer, or continue the proceeding as if there was no offer at all.
  11. Failure to accept a reasonable offer has cost consequences for either party; and
  12. Self-represented successful parties may be awarded up to $500 as compensation for inconvenience and expense

So, the parties can negotiate at any time. The courts love settlement offers. You should learn to love them, too, because, in my opinion, there is no down side to making honest offers to settle. If you are making offers that you know would be rejected by any right-thinking person, then you are taking your own chances there. However, I’m not asking you to just roll-over, either.

Coming up with settlement terms can be simple and straight forward and you should endeavor to keep it that way, as most Small Claims Court matters usually concern only one-issue claims. The great thing about settlement offers is that it can address issues of concern for both parties and the methods of getting to that consensus can be creative, including issues that do not directly involve money.

In writing the Offer to Settle, you can either use the forms available on the Small Claims Court Forms website, or you can write a letter that can express all of your terms and conditions. Form 14A is the pre-printed Offer to Settle form that you can use. The top part of the form is easy to fill out. Put in the court location and address along with the court file number assigned to your case. Name the Plaintiff and the Defendant. The line after that begins with, “My name is…”, and funnily enough, that is where you put your name. Paragraph 1 has the checkboxes; identify yourself as the plaintiff or defendant. Paragraph 2 starts with, “I offer to settle this action against BLANK,” and funnily enough, that is where you put in the other party’s name. The paragraph continues, “on the following terms.” Now, look at all that blank space. Lots of things happen here. And all of it is up to you.

Don’t panic. Many a writer has feared the blank page; you’re not the first one and you won’t be the last, either. Here are some suggestions to help get started:

  1. If it is settlement for a monetary amount, name the amount and who gets to pay which party. Be clear on who pays and who gets the money.
  2. Remember when you indicated on the plaintiff’s claim that you had to choose what kind of interest you would be claiming? You know, that pre- and post-judgment interest? You can indicate here whether that interest applies or not.
  3. Remember a brief discussion as to costs? Is the other party going to pay your costs such as filing fees and photocopies? It’s up to you whether they pay that or not.
  4. How long does the other party have to pay you in full? Is it a full amount within a set amount of time? If the other side can’t pay the amount all at once, can they pay in installments? How long? Three months? Six months? How much per month? Can they accelerate payments so they can pay earlier? Is the last payment less than the monthly payments? Put it in writing.
  5. Who gets paid? Is it your company? To you personally? Put it in writing.
  6. What method of payment do you want? Bank draft? Cheque? Certified cheque? E-mail transfer? Cash? Put it in writing.
  7. Do you need to exchange documents? Is there someone holding some document until payment is made? When does this exchange of documents happen? When everyone agrees? When one party is paid in full? You better get that in writing.
  8. Let’s say that it’s not just about the money. Let’s say that there is an issue over a bicycle. One party has it; the other party wants it back. When does the other party get the bike back? In what condition should the bike be in when you get it back? What happens if there is something wrong with the bike after you get it back? Will it be repaired? Will it be replaced? Is the offer dead if the bike is returned to you in pieces?

Overall, you need to think about the results that you want. You also need to think about consequences if the results you want don’t materialize. Don’t forget to number your paragraphs for easy reading and reference.

Paragraph 3 says when the offer is good for. You can give expiry dates on your offers. You can stagger your offers if you wish. You can give new offers after the old one expires, changing whatever terms wish. If it is a final offer and you know when the trial date shall be, I put this phrase in the blank, “This offer to settle is available for acceptance until one minute after trial begins on (the trial date).” The purpose of the phrase is to set a palpable deadline to the other party. It shows two things. First, the offer is the bottom line for you. Second, if the matter is not resolved, you are definitely going to trial. This final offer phrase will be important if you end up going to trial.

There are two very important bold boxes at the bottom of the second page. The first one references Rule 14.06 of the Rules of the Small Claims Court. It says to the person receiving the offer to settle that if they accept the offer and then fail to adhere to the terms of that offer, the party making the offer can do one of two things: ask for a judgment in the accepted terms by way of a motion, or proceed to trial as if the offer was never given. This is to give pause to parties that want to delay proceedings and otherwise frustrate parties acting in good faith. There are consequences to reneging on a deal.

The second bold box refers to Rule 14.04. It says that if the other party refuses to accept the settlement offer, neither side can file the offer until the trial determines the final outcome, especially when there are questions as to who is liable and how much is to be paid as damages. This is to protect the settlement conference negotiations and cannot be used as evidence at trial to say things like, “Why didn’t you accept this offer?”

Sometimes, Offers to Settle can go back and forth between the parties. How does the court deal with multiple offers? The first general rule is that when one party gives the opposing party an Offer to Settle, then gives a second offer to settle for a different amount, either higher or lower, that has the effect of cancelling the first offer. The second general rule is that when Party A sends an offer to settle and Party B does not accept the offer, but Party B provides a counter-offer to settle the matter, both offers are on the table for acceptance by the other, unless one party says that they are withdrawing the previous offer.

So, how does one accept an Offer to Settle? Again, you can use the Ontario Small Claims Court Form 14B. It’s very straight forward.

What about withdrawing an Offer to Settle? Hey, look over here! Form 14C does that for you as well. In both cases, either accepting or rejecting an offer, you can just send a letter with your answer.

If you have noticed, you will see Form 14D on the Ontario Small Claims Court Forms web page. Let’s take a closer look at that one.

This is the Terms of Settlement form that you can use. At the top, as always, is the court location and address portion, along with the court file number assigned to your matter that you will fill in. The names of the parties are to be included. Make sure that the names matches the names found on the Plaintiff’s Claim. Now, the form assumes that the Terms of Settlement is for money damages. It also assumes that the lump sum includes interest and costs. If that doesn’t apply to your case, feel free to put a windshield wiper through the offending words or lines and have each party initial the strikeout. Then there is that huge blank space again. If you have already filled out an Offer to Settle Form, then you just have to transfer that information over to the Terms of Settlement. On the last page, there are some standard terms that are already written for you.

Paragraph 2 says what happens to the court case after settlement. The claims are withdrawn, like it never happened.

Paragraph 3 says, “If a party to these terms of settlement fails to comply, judgment in the terms of settlement may be obtained

against that party on motion to the court or this action may continue as if there has been no settlement.” This is a repetition of those boxes I told you about in the Offer to Settle, just packaged into a single sentence. This paragraph reflects Rules 14.04 and 14.06 of the Rules of the Ontario Small Claims Court.

Paragraph 4 says, “Provided that the terms of settlement are complied with, the parties above fully and finally release one

another from all claims related to the facts and issues raised in this action.” This is a “no comebacks” clause. If all of the terms of the settlement have been met, then all of the parties can expect that everything mentioned in a Plaintiff’s Claim, Defence, and Defendant’s Claim have been addressed, satisfied, and that the matter is truly over and done with. If one of the parties decides to sue for the same reasons again, that’s considered a no-no. That new action will be considered as an attack against the Terms of Settlement, an agreement that was meant to finalize things. As always, there are exceptions to the rule: the first being that there was some sort of bad faith bargaining done by one of the parties; the second, a new breach that happens after the signed agreement.

After that paragraph, there is the signature block. The parties don’t have to be in the same room at the same time for the agreement. One party can sign on one day, and then the other party can sign on the next day. The important thing is that the Terms of Settlement is signed by all of the parties. Everyone gets a copy of the Terms of Settlement.

When the Terms of Settlement is signed, everyone should also sign Form 11.2A Request for Clerk’s Order on Consent. On page 3, mark the checkbox that includes confirmation that the Terms of Settlement has been satisfied. File both the Terms of Settlement and the Request for Clerk’s Order on Consent with the court office.

That sort of completes this section on when Terms of Settlement are agreed to and all of the parties, well, they don’t feel happy, but definitely relieved that their ordeal is over. But what happens when no one can agree and you end up going to trial? Did you waste time trying to settle the matter? No you didn’t. Here’s why.

Let’s remember the rules for a moment here. Take a look at Section 29 of the Courts of Justice Act first. And I quote:

An award of costs in the Small Claims Court, other than disbursements, shall not exceed 15 percent of the amount claimed or the value of the property sought to be recovered unless the court considers it necessary in the interests of justice to penalize a party or a party’s representative for unreasonable behavior in the proceeding.

Now, let’s take a look at Rule 14.07, subrule (1):

When a plaintiff makes an offer to settle that is not accepted by the defendant, the court may award the plaintiff an amount not exceeding twice the costs of the action, if the following conditions are met:

  1. The Plaintiff obtains a judgment as favourable or more favourable than the terms of the offer.
  2. The offer was made at least seven days before the trial.
  3. The offer was not withdrawn and did not expire before the trial.

Rule 14.07, subrule (2) says:

When a defendant makes an offer to settle that is not accepted by the plaintiff, the court may award the defendant an amount not exceeding twice the costs awardable to a successful party, from the date the offer was served, if the following conditions are met:

  1. The plaintiff obtains a judgment as favourable as or less favourable than the terms of the offer.
  2. The offer was made at least seven days before trial.
  3. The offer was not withdrawn and did not expire before the trial.

So, what does this all mean?

Like I said before, the Ontario Small Claims Court loves Offers to Settle. They love them so much, in fact, the court is prepared to give additional costs to a party that had a similar or better offer than what the plaintiff gets at the end of the trial. The Courts of Justice Act sets a baseline cap of 15 percent of what is claimed for costs and representation fees. The Rules of the Small Claims Court says that a Deputy Judge can raise that cap up to 30 percent of what is claimed for costs and representation fees. If you have a $10,000.00 claim, you can claim as costs up to $1,500.00 which is the 15 percent cap. If you get a judgment for $10,000.00 and have a settlement offer that is equal to or less than what you got at trial, that 15 percent cap of $1,500.00 can double up to thirty percent or $3,000.00. And, get this, you add that $3,000.00 on top of the $10,000.00 that you already have proven. That’s if you are represented by a lawyer or a paralegal. Now, the bad news. If you are self-represented, your costs can be capped to $500.00 because of Rule 19.05. Sorry. That’s just how it is. I’m only telling you this because, if the other side is represented by a paralegal or a lawyer, their cost considerations are going to be just as important to them as it will be to you. Just remember that if you lose, you might be paying more than $500 in costs, on top of whatever damages they prove.

Now, we have to take the worst-case scenario. What happens when everyone thought that there was a settlement, but one side reneges on the deal?

The party who thought that they had a deal can bring a motion to the Small Claims Court. That party will also need a supporting affidavit that says that:

  1. One side made an Offer to Settle;
  2. The offending side accepted the offer; and
  3. That the offending side breached a term of the Offer to Settle or withdrew their acceptance of the offer at some point.

Remember when I told you that Settlement Conferences are supposed to be secret between the parties? When it becomes clear that a party breaks the agreement, the first thing that the court will look at is was there an agreement in the first place? So, this is the only time when all of those negotiations open up and are presented to the court before a trial. Not an easy process.

There are two remedies that you can have when someone reneges on an Offer to Settle. The first remedy is to get a judgment in the amount that was agreed on in the Offer to Settle. Therefore, the Offer to Settle is elevated from a private agreement to a court order. Now, all of the mechanisms for court enforcement become available, like garnishment, the seizure and sale of land, and the seizure and sale of personal property. The second remedy is to throw everything out the window and request to return to the trial process. A word of warning, though: make sure you have such a strong case that there can almost be no doubt that you could win. Judges are capable of doing anything, and even the most straightforward case may end up sideways in a ditch. This is not an indictment against judges, but it can also mean that in presenting your case, you make a mistake that the judge has to right by denying your claim or defence. Also, bringing a case to trial opens up the cost consequences again. Consider yourself warned.

That wraps up this podcast. Your comments and questions are always invited. There are guides written by the Ministry of the Attorney General that are available at most Small Claims Court locations or on line at www.attorneygeneral.jus.gov.on.ca/english/courts/guides. There you will find the Guide to Getting Ready for Court.

Thank you for listening and I hope you join me again soon.

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