Settlement of Civil Litigation Is Good

Technology has not been the panacea to delays in the court system. Ontario has announced $72 million to tackle the backlog, but even then it will likely focus on criminal proceedings, while civil cases continue to languish.

In Innocon Inc. v. Daro Flooring Constructions Inc., Justice Myers of the Ontario Superior Court of Justice indicated at para 80 that motions are being scheduled at least 8 months out in late 2021. Those delays are only expected to get longer in 2022.

The only reasonable and client-focused response to this is for counsel to find practical and effective solutions.

Justice Myers again emphasized this in a recent decision in Performance Analytics Corporation v. McNeely, where he reviewed the terms of settlement where a party to the litigation switches sides. The claim involved several employees who resigned in 2017, and allegedly breached obligations by creating a competitive business.

One of the minor players of the lawsuit entered a settlement in 2020, to let them out of the action, on the basis that he would provide further disclosure of documents.

However, this only happened after the parties were involved in a convoluted and extensive motion in 2019 for further and better affidavit of documents. One of the main issues in this motion was the formatting of the affidavit of documents in an Excel spreadsheet. Both parties only experienced partial success on the motion, and no costs were awarded.

The settlement in 2020 was not disclosed to the other parties, and Justice Myers explained the importance of settlement privilege as follows,

 [1] Settlement of civil litigation is good.

[2] The law strongly favours settlements of civil litigation. The policy is so strong that efforts to settle and resulting settlement agreements are protected from disclosure by a special form of privilege. Justice Abella explained in Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37 (CanLII)

[1] The justice system is on a constant quest for ameliorative strategies that reduce litigation’s stubbornly endemic delays, expense and stress. In this evolving mission to confront barriers to access to justice, some strategies for resolving disputes have proven to be more enduringly successful than others. Of these, few can claim the tradition of success rightfully attributed to settlements.

[2] The purpose of settlement privilege is to promote settlement. The privilege wraps a protective veil around the efforts parties make to settle their disputes by ensuring that communications made in the course of these negotiations are inadmissible.

[3] However, as the Supreme Court of Canada also explained, there are exceptions to settlement privilege under which settlement terms must sometimes be disclosed.

Justice Myers found this was not the kind of abuse of process described in Handley Estate v. DTE Industries Limited that would warrant dismissal of a proceeding, or where further disclosure of terms of settlement privilege may be disclosed as outlined in Sable Offshore Energy Inc. v. Ameron International Corp. In any case, the full settlement was provided as part of the motion, and did not reflect the adversarial orientation of the litigation.

Settlement of civil litigation is almost always good, for the parties, the lawyers, and the justice system. It’s the only way out of this backlog from the pandemic.

Perhaps afterwards everyone can go back to being “trial lawyers.”

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