The Benefits of an Offer to Settle

I was recently successful in a Small Claims law suit where our client was sued for alleged damages to a vehicle the plaintiff claimed were caused by our client.

It was obvious after reviewing the Plaintiff’s Claim that the plaintiff had no reason to sue our client. The Deputy Judge at the Settlement Conference had a hard time understanding what the plaintiff’s damages were. We were also confused, and so was the plaintiff! (Helpful hint: if you don’t understand what your paralegal or lawyer has drafted, ask them before they sue on your behalf.)

After the Settlement Conference, we served an Offer to Settle for a nominal amount in an attempt to avoid going to Trial. The nominal amount was based upon our Defence and the Deputy Judge’s thoughts at the Settlement Conference. More importantly, the Offer was served because of the cost consequences for the failure to accept an Offer that is better than the end result.

The Small Claims Court Rules state that if an Offer to Settle is not accepted, but was served before the Trial date, and does not expire before the start of the Trial, the successful party is be entitled to costs that are double the amount that would normally be awarded.
In our case, the claim was in the amount of $25,000.00. The maximum a successful party would be entitled to for representation is 15%, being $3,750.00. With disbursements, our client’s costs ended up being approximately $4,300.00.

During my submissions, I requested that amount, and because our Offer was not accepted and was better than the result (for us at least), I requested double, around $8,600.00.

When the Deputy Judge asked for submissions from the plaintiff’s paralegal representatives (there were two) as to what I was requesting, they asked the Court for leniency. They claimed that the stress caused to their client was worth the Court being lenient when ordering costs against them. As the Court had already found that our client was not responsible for that stress, their request was denied. Our client ended up with a cost order of $7,900.00. Our client was very pleased with this result.

As litigation is never guaranteed, it is always important to consider serving an Offer to Settle, whether you are the plaintiff or defendant, because it may help you in the end, whether it is you paying less in costs if your offer was better than the result, or you getting double costs if you are successful.

Murray S. Brown, Paralegal
mbrown@andriessen.ca

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