Offers to Settle in family law matters are a key step in the litigation process and derive their authority from Rule 18 of the Family Law Rules. Rule 18(1) defines offer as “an offer to settle one or more claims in a case, motion, appeal or enforcement, and includes a counter-offer.”
An Offer to Settle may be made by any party and at any time during a family law proceeding as stated in Rule 18(2). Generally however, Offers to Settle are more often made after disclosure has been completed, before or after a settlement conference or before trial.
Incentives to Making an Offer to Settle
There are two overarching incentives to making an Offer to Settle. The first is a party’s drive to dispose of the matter before it goes to trial through early settlement. Often times, parties start negotiating with their heels dug in the ground, not willing to budge from their bargaining position. As time goes on and significant legal fees are spent, parties begin to realize that little progress has been made and belabouring the matter further will actually be detrimental to both of them. The time and legal fees incurred most often outweighs the net gains. A strong incentive to making an Offer to Settle is the desire to settle all the outstanding issues in the matter. It forces the offering party to narrow down the contested issues, evaluate their position and move towards a middle ground.
A second incentive to making an Offer to Settle is costs. If a party makes an Offer to Settle that is rejected, but was equal to or better than the final determination of the matter, then the court may make a costs award in their favour. In the best case, if the Offer to Settle is accepted it will dispose of the matter entirely. In this way, the court rewards parties who make reasonable offers and penalizes parties that reject them.
Finally, making an Offer to Settle can be seen a strategic move forcing the other party to consider settling the matter and thereby create an awareness of the potential costs award that could be made against them.
Preparation and Time Frame for Acceptance
An Offer to Settle is prepared by one party proposing a resolution to all outstanding issues in the matter. It is then served on the opposing party with a timeframe for acceptance. According to Rule 18(5), an Offer to Settle may be withdrawn any time before the offer is accepted. The withdrawing party is required to file a Notice of Withdrawal.
Rule 18(6), states that an Offer to Settle is time barred. An offer that is not accepted within the specified time is considered to be withdrawn. What this means is that once the time has passed for accepting the offer, the party receiving the offer cannot thereafter change their mind and accept the offer. In addition, an offer cannot be accepted once the court begins disposing of the matter by judgment. One important point to note, is that a party still has the right under Rule 18(10), to accept an offer that they previously rejected or counter-offered so long as the time for acceptance has not expired.
Offers to Settle are Without Prejudice
Another benefit to Offers to Settle is that they are considered to be “without prejudice”. What this means is that offers cannot be disclosed to the court in order to prejudice the offering party. As a result, offers to settle cannot be discussed or mentioned in any court pleadings or appearances. Offers to Settle are only disclosed after a final decision has been made disposing of the matter. This will usually be done to support a party’s submissions regarding the awarding of costs.
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Disclaimer: The above article is not a legal opinion as every case is different and is only for general awareness. Please contact us for specific questions and legal advise.