Offers to Settle
What is an Offer to Settle?
Rule 18 of the Family Law Act governs Offers to Settle.
An Offer to Settle is an optional document which can be served from one party in the case to another. The party creating the document outlines how they propose to resolve all the contested issues in the case: that is to say, one party may propose what they see as acceptable terms to end the case, if the case ends immediately.
Offers can have deadlines: if the offer has no deadline, then the other party may accept it at any point. It can also be withdrawn by the offering party at any time prior to acceptance.
It is important to seriously consider all offers proposed to you in a case, since the consequences of not accepting a favourable offer may result in you having to cover the other party’s legal fees. In Ontario, if the offering party makes an offer which the other party rejects, and the final court decision is either as favourable or more favourable to the offering party than their offer, the other party will have to pay a significant amount of the other party’s legal fees.
There are specific requirements, such as:
- The offer must have been made at least one day before a motion, if it relates to a motion.
- The offer must have been made at least 7 days before a trial or hearing, if it relates to a trial or hearing.
- It is also important that the offer to settle is not withdrawn and does not expire before the commencement of the hearing; Commonly included in the offer is the statement that the offer “remains open until one minute following the commencement” of the hearing of the trial or motion.
Why make an Offer to Settle?
There are two reasons to make an Offer to Settle:
- If the other party accepts, then the litigation will end and the case will be resolved sooner (without going to trial.) Almost all family law cases are resolved before going to trial, so making offers to settle is very normal.
- If the case goes to trial and an offer was previously made which was not accepted, the judge may order the other party to pay the offerer’s legal fees. This will only happen if the judge’s final ruling is as favourable or more favourable to the contents of the offer.
In general, the court tends to reward parties who make reasonable Offers to Settle and penalize those who reject reasonable offers. If your offer was rejected by the other party, and a judge makes a similar final court order, the other party may be ordered to reimburse you for your legal fees. This is why it is important to seriously consider all offers you receive, and to consider making a strategic offer yourself.