CANADA Law and Practice Contributed by: Craig Ferris, Marko Vesely, Shannon Hayes and Catherine Whitehead, Lawson Lundell LLP
about delay, some courts are requiring the parties to obtain court orders early in the process committing them to deadlines for certain steps, and to obtain trial dates within a few years of the action commencing. The rules of procedure will provide mechanisms for the dismissal of proceedings for long delay (typically several years where no material steps are taken) or delay giving rise to prejudice. These orders for dis- missals are not automatic and require an application with supporting evidence. There may also be a limited power for a court registrar to dismiss an action for delay in limited circumstances. In general, court approval is not required to settle a lawsuit of a commercial matter other than class actions. However, if a settlement involves a minor or a disabled person, court approval may be required. The rules of procedure or a provincial statute will contain the restrictions and any applicable procedure. For commercial matters, the party receiving funds may request, as a term of the settlement, that the mon- etary amounts be incorporated into a consent judg- ment, which will assist that party with enforcement if the amount is not paid. While this requires a judge’s approval, since the order is entered by consent, the judge is unlikely to inquire into the terms. 8. Settlement 8.1 Court Approval 8.2 Settlement of Lawsuits and Confidentiality The Supreme Court of Canada has recognised set- tlement privilege as one of the classes of privilege. Settlement privilege protects the confidentiality of information and communications exchanged in the process of settling a dispute. There are exceptions to settlement privilege, and a court may order that certain information relating to settlement be disclosed. For example, in multiparty litigation where the plaintiff settles with one or more of the defendants, the court may order the disclosure of certain details of the set- tlement to the defendants remaining in the action. Offers to settle may be exchanged under the common law and through the rules of procedure. The rules of
procedure may contain specific forms and require- ments for a “formal” offer to settle, which if refused may result in cost consequences if the party sending the offer beats the offer at trial. This offer to settle may not be disclosed until after a decision is made on the merits. 8.3 Enforcement of Settlement Agreements If a settlement agreement is reached, it is enforced just like any other contract. If there is a breach, the innocent party will commence another action against the defaulting party to obtain any remedies available for that breach. If a formal offer to settle has been accepted in accord- ance with the rules of procedure and there is a default in performance, there may be a mechanism to have the formal offer to settle converted into a judgment through application within the existing action. If the settlement amount has been incorporated by the parties into a consent judgment, then that judgment may be enforced as any other judgment of the court. 8.4 Setting Aside Settlement Agreements As a contract, a settlement agreement may be set aside on the basis of duress, unconscionability, mis- take, fraud or breach of fiduciary duty. The bar to set- ting aside any contract is high. 9. Damages and Judgment 9.1 Awards Available to the Successful Litigant A successful party may obtain one or more of the fol- lowing remedies at trial: • declaration of rights or interests in property; • an order for specific performance or permanent injunction; • common law damages; • equitable compensation or damages; • orders under statutory schemes, such as those governing corporations or partnerships; or • pre-judgment and post-judgment interest on mon- etary awards.
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