Offers to Settle in Nova Scotia Personal Injury Claims
I have been a personal injury lawyer in Nova Scotia for 23 years, and throughout this time I’ve helped my clients with high-quality legal advice and the guarantees of favorable settlement agreements. Settlement negotiations have always been an important aspect within the civil procedures of my countless cases, and it’s been a general rule of the common law to at the very least attempt to get all involved parties to settle their claims and avoid the costly consequences of going to trial.
But settlement offers can also have a significant legal impact even if a case doesn’t settle before trial. That’s why this article by Matt Maurer was of interest to us because it provides a perfect illustration of the strategic use of settlement discussions and the art of the counter-offer.
If you have any questions or concerns in terms of the offer within your personal injury claim, contact us for a free consultation so we can review the details of your claim and put you in the right direction towards your most favorable settlement offer.
Formal Offer to Settle
During any litigation, there are usually informal “without prejudice” settlement discussions designed to try to resolve the civil procedure, which takes place during the litigation process.
However, most provinces’ court rules will have a specific standard basis that governs formal settlement offers.
What exactly is a settlement offer? A simple example would be if two parties are involved in a personal injury lawsuit in which Party A was a pedestrian who was hit by Party B’s car.
A sues B for $100,000 to cover pain and suffering, loss of income and cost of medical treatment (this sum of money is completely arbitrary because each settlement agreement is always unique!)
B defends the lawsuit and the claim that his/her negligence was the cause of the accident by saying that A stepped on to the street before the light changed.
At any time before the trial begins either party can make a formal offer to settle. B might execute a defendant’s offer to pay $50,000 in order to conclude the proceedings. The offeror may also want certain conditions to go with the sum of money, for example, A may be required to keep the amount paid confidential.
Offers to settle are an alternative to the “winner-take-all” court order route. Through settlement discussions, the parties can negotiate the outcome and achieve certainty without leaving the final result in the hands of a judge or jury.
What happens if a settlement is not accepted?
A settlement offer can cause favorable results even if it’s not accepted. If a party obtains a “favorable judgment” meaning that, following the rejection of a settlement offer, the Court gives a result that finds the rejecting party in no better position than they would have been if they accepted the offer, the Court will award certain costs to the offering party.
To apply this to the example above: If Party A rejects Party B’s offer of $50,000 and the matter goes to trial and the judge orders B to pay A $50,000 (or less), then B will have some of his litigation costs paid for by A.
According to the Civil Procedure Rules in Nova Scotia the following guidelines respecting costs apply:
A judge may award costs to a party who starts or who successfully defends a proceeding and obtains a favourable judgment, in an amount based on the tariffs increased by one of the following percentages:
- one hundred percent, if the offer is made less than twenty-five days after pleadings close;
- seventy-five percent, if the offer is made more than twenty-five days after pleadings close and before setting down;
- fifty percent, if the offer is made after setting down and before the finish date;
- twenty-five percent, if the offer is made after the finish date.
Essentially the rules try to allow the offeror to recover the legal costs that they were forced to spend as a result of the other side not accepting a reasonable offer. They also serve to encourage parties to make reasonable offers instead of low-balling.
I have written about the importance of making a reasonable settlement offer: How Can You Win Your Trial But Still Lose? Cost Awards and Formal Offers to Settle
Back to Mr. Maurer’s article, in the case he reviewed, the plaintiff was injured in a car accident. The plaintiff was successful at trial winning on both the issue of liability (who was at fault for the accident) and damages (being awarded compensation).
- The defendant lost both the main action and the counterclaim and was ordered to pay $12,875 to the plaintiff.
- However, back in 2011, the defendant offered to settle the lawsuit by paying $13,500 plus legal costs to the date of the offer. This offer was left open until the start of the trial and was not accepted by the plaintiffs.
- The result is that even though the plaintiffs were completely successful on liability in both their claim and in defending the counterclaim, they had to write a cheque for over $12,000 to the defendant.
Won the battle but lost the war
This case is a perfect example of how a plaintiff can win the battle (trial) but lose the war (adverse cost award). It also teaches plaintiffs to carefully consider every offer to settle received in advance of trial.
Contact us for a free consultation so we can support your settlement negotiations
Having a well-respected and experienced legal team will always go a long way in terms of coming to a favorable settlement agreement because defense firms and judges know us and our track record very well.
If you or a loved one is currently planning on undergoing with a personal injury or family law lawsuit, it’s crucial that you’re well-represented throughout the entirety of your civil procedure.
Contact us today for a free consultation so we can review the evidence and facts within your situation, and begin putting you or your family member in the right direction towards your most favorable settlement agreement.