How this Rule Works

This Rule consolidates and expands on the previous R.41A and Practice Memoranda 5 and 27. Rule 10 applies to any type of proceeding and addresses three aspects of settlement:

1. enforcement of settlement agreements;
2. formal settlement offers affecting costs; and
3. judge-assisted settlement conferences.

Judicial approval of settlements is dealt with in Rule 36 - Representative Party.

Highlights of Changes

Enforcement of Settlement Agreements

Enforcement of settlement agreements is dealt with in R.10.02 and 10.04.

Rule 10.02 provides that settlement with one party does not release any other party unless expressly agreed. It allows third parties to enforce settlement agreements affecting them, even where no privity exists.

Rule 10.04 creates a simple enforcement mechanism for settlements of pending litigation, whether the settlement was reached through negotiation, mediation, arbitration, or at a settlement conference. Rule 10.04 does not extend to enforcement of mediated settlements or arbitration awards except in the context of pending litigation.

By motion, a party can seek an order giving effect to a settlement agreement. A novel aspect of R.10.04 is that where the alleged settlement was reached at a settlement conference, the motion will generally be heard before the settlement conference judge, who is expressly permitted to consider his or her own knowledge of what took place.

Formal Offers to Settle Affecting Costs

Formal offers to settle are addressed in R.10.03 and R.10.05-10.10. Rule 10.05 creates four separate forms of offers to settle, depending on which party is making the offer, and whether the offer is entirely monetary or not.

While the previous R.41A.02 allowed for partial settlements of “any claim,” to comply with R.10.05(4) a formal offer to settle must now include terms “that would settle all claims in the proceeding between the party making the offer and the parry to whom it is made,” including costs, though it is acceptable to simply include costs to be determined.

Rule 10.08 deals with determination of costs after acceptance of a formal offer to settle. Where the defendant’s offer is accepted, the Rule builds in an incentive for early acceptance, as the defendant is entitled to disbursements and a contribution towards expenses while the offer is outstanding.

Rule 10.03 gives the court broad discretion when determining costs to consider written offers made under R.10 or otherwise, but specifically excludes from consideration any offers made at settlement conferences or under agreement that they would not be admissible in relation to costs.

The previous R.41A.04 permitted time-limited offers. Rule 10.06 eliminates deemed revocation and requires that an offer be withdrawn in writing. Presumably, a party could still indicate in the offer an intention to withdraw it on a particular date, but the wording of R.10.06 suggests that a party must now take the step of actually withdrawing the offer in writing when that date arrives.

Breaches after acceptance of a formal offer are dealt with in R.10.07 and provide an aggrieved party with broad remedies in addition to enforcement of the settlement, including damages and expenses of attempting or seeking performance.

The formula for assessing costs has changed. Under the previous R.41A, the successful plaintiff was entitled to disbursements plus double party and party costs from the date of service of the offer to settle, while a successful defendant limited the plaintiff’s costs to the date of service of their offer, and became entitled to their own party and party costs and disbursements thereafter.

Rule 10.09 continues different treatment for late settlement offers received less than seven days prior to trial and defines a “favourable judgment” for costs purposes. Rule 10.09 also rewards early settlement offers by increasing tariff costs by a percentage that decreases steadily as the litigation progresses: 

Some aspects of the previous R.41A are not dealt with in R.10. For example, R.41A.05 confirmed the usual without prejudice status of offers and limited a party from referring to offers before the matter was decided, but there is no similar provision in R.10, nor does R.10 contain a provision similar to the previous R.41A.10 dealing with multiple defendants.

Judge-assisted Settlement Conferences

Settlement conferences remain voluntary and confidential under the new Rules, but R.10 shifts the judge’s role in the conference away from mediation and towards expression of a candid opinion of the merits of the case.

Timing of Settlement Conferences

The Rules provide wide discretion to hold the conference “at any stage of a proceeding” (R.10.11(1)). Settlement conferences fixed through the Date Assignment process will generally be held no later than 10 days before the trial readiness conference (R.4.16(6)(e)), which in turn is held at least 40 days prior to trial. Rule 4.19(3) expressly provides for late settlement conferences after the trial readiness conference, if warranted.

Types of Settlement Conferences

Counsel may choose between two different types of settlement conference:

Ordinary – in which the parties request the judge to express opinions on the issues in dispute after preparing by reading excerpts from discoveries, other documentary evidence, briefs, and hearing submissions (R.10.13). As a general rule, ordinary settlement conferences will continue to be held in a conference room and will not be on the record or open to the public. The Rule allows for caucusing with the judge. A template agenda is contained in R.10.13(4).

Trial-like – like an ordinary settlement conference, with one added feature: counsel may question a witness or witnesses (R.10.14). Trial-like settlement conferences are not unlike the mini-trials referenced in Practice Memorandum 5, but there are significant differences. Rule 10 suggests that the court intends trial-like conferences to be more widely available than mini-trials. There is no need to prepare a statement of agreed facts, but a list of witnesses with will-says is required and the Rule contemplates that the judge will hear from one or more witnesses. The questioning can include direct examination (or will-say), and cross-examination, but is not done under oath, as its purpose is only to permit the judge to better assess whether the testimony is likely to be accepted. As a general rule, trial-like settlement conferences will be held in a courtroom, off the record, and closed to the public. A template agenda is contained in R.10.14(4).

Procedures Common to all Settlement Conferences

Default procedures for both types of settlement conference are set out in R.10.12, but the parties may agree, or the judge may adopt, other procedures. Rule 10.12 provides for an organizing conference to address procedure, if necessary.

Rule 10 settlement conferences demand a high level of preparation and participation from counsel, clients, and the court. Parties must prepare and submit a brief, book of authorities, and a book of evidence. The contents of each party’s books of authorities and evidence must be carefully chosen and edited. They must disclose their case or defence in written submissions (including the party’s position on all settlement proposals to date – R.10.13(2)). The filing deadline is 5 days before the conference for ordinary conferences, and 14 days for trial-like settlement conferences. The client or an agent with authority to bind the party must attend the conference, unless the judge grants permission to have that person available by phone instead (R.10.12).

If a settlement conference is cancelled due to a party’s failure to comply with R.10.12, the judge may order the unprepared party to indemnify another party for their expenses. If a judge is unable to formulate an opinion after reviewing the parties’ material and hearing from them, he or she will explain why he or she is unable to do so (R.10.13(4)(f)).

If a settlement is reached, the judge will ensure there is a written or electronic record of the settlement provisions, assign responsibility for preparation of an order, and advise the prothonotary regarding changed requirements for trial or hearing dates.

The confidentiality provisions of R.10.16 govern all settlement conferences and ensure that conference-related documents and correspondence are kept separately from the court file, and are returned to the parties, or destroyed when they are no longer required. Unlike Practice Memorandum 5, R.10 does not specify that the settlement-conference judge may not sit as the trial judge, though the confidentiality provisions of R.10.16 suggest that the practice of assigning a different judge to hear the trial will continue.