Ruling on enforceability of a Rule 49 settlement

In Wilson v John Howard Society ( 2020 ONSC 5531) Bondy J. ruled that the defendants’ Rule 49 offer which was accepted by the plaintiff was enforceable even though there were some minor issues not covered in the offer as follows:

1. The plaintiff wanted the $2,221.50 characterized as retiring allowance whereas the defendant wanted to treat it as wages. This made a tax withholding difference of about $363.
2. The plaintiff wanted the entire amount allocated to legal fees. The defendant refused because that is not what the Rule 49 offer said.
3. The offer was not clear as to would pay for the dismissal order.

The Judge rejected al these arguments.

1. The characterization was agreed to in the Rule 49.
2. The amounts were properly characterized in the Rule 49 offer and thus could not be changed unilaterally.
3. The implication from the Rule 49 offer was that the defendant would take out and pay for the dismissal order.

The Plaintiff got a judgement for $4,037. The Defendant was awarded costs to be determined.

Question: At the end who won?

What this case was really about was a plaintiff who wanted to back out of a deal that she had originally agreed to. This case reinforces the idea that “settlements are sacred” and any attempt to weasel out of a deal made when both parties are represented by lawyers is basically a fools’ game.

This case reminds us of the importance of making sure that settlements should be fully documented and signed on the spot. In my mediations, I strongly encourage the parties execute full settlement agreements, including releases, at the end of the mediation. To do otherwise allows either one reluctant party to try to back out or the realization that the parties had not really agreed on important issues like allocation, confidentiality, non disparagement clauses and the like.

Experienced counsel come to a mediation with draft settlement documents that can serve as a basis for the finalized documents.

Original title of blog post: Great Ruling on Enforceability of a Rule 49 Settlement

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Barry B. Fisher LL.B.

Barry B. Fisher, LL.B., is a mediator and arbitrator of both employment and labour relations matters. He offers three forms of ADR based on clients’ needs: Mediation, Arbitration and Med/Arb. Barry is from the evaluative school of mediation and brings his over 30 years' experience as an employment lawyer and legal author to the dispute. In addition to his knowledge of the legal issues involved in these disputes, he also has a deep understanding of the psychological factors that motivate both employees and employers. By combining these two skills, Barry is able to achieve a settlement rate of over 80% of the disputes that he mediates.

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