Offers to Settle and Cost Consequences
During a family law matter, one party may make an offer to settle to the other party. Parties may have many questions regarding offers to settle and what it means to the overall case.
One issue that should be discussed with parties is the implication of offers to settle on cost consequences.
Rule 18 of the Family Law Rules discusses offers to settle.
Specifically, Rules 18(11), 18(14), 18(15) and 18(16) discuss the cost consequences of offers to settle.
Rule 18(11) states that if an accepted offer does not deal with costs, either party is entitles to ask the court for costs.
Rule 18(14) states that if a party who makes an offer is, unless the court orders otherwise, entitled to costs to the date the offer was served and full recovery of costs from that date, if the following conditions are met:
1. If the offer relates to a motion, it is made at least one day before the motion date.
2. If the offer relates to a trial or the hearing of a step other than a motion, it is made at least seven days before the trial or hearing date.
3. The offer does not expire and is not withdrawn before the hearing starts.
4. The offer is not accepted.
5. The party who made the offer obtains an order that is as favourable as or more favourable than the offer.
18(15) states with the burden of proving that the order is as favourable as or more favourable than the offer to settle is on the party who claims the benefit of subrule (14).
18(16) states that when the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply.
Parties should be aware of potential cost consequences when offers to settle are presented and be aware of the potential liability for the other parties costs.