Area of Law: Small Claims Court
Answer # 551
What is an offer to settle?Region: Ontario Answer # 551
Most lawsuits are settled by the people involved before the lawsuit goes to trial. If you are involved in a lawsuit, you may want to try to settle the matter to save time and money.
What is an offer to settle?
An offer to settle usually includes a statement by the plaintiff or defendant about how they are willing to resolve the lawsuit without going to trial. An offer to settle can be made by anyone involved in a lawsuit at any time. An offer to settle can be withdrawn as long as it has not been accepted by the other side. If you make an offer to settle, and the other side accepts it, then a settlement agreement has been made.
What are the consequences if an offer to settle is turned down?
If someone makes you a reasonable offer, and you do not accept it, you may have to pay extra costs after a trial. The consequences of not settling will depend on who made the offer and whether the amount awarded by the judge is more or less than the offer.
If the defendant rejects an offer to settle, but the judge awards the plaintiff an amount that is equal to, or greater than, the plaintiff’s offer, the defendant may have to pay up-to two times the plaintiff’s costs of the lawsuit if:
- the offer was made at least seven days before the trial, and
- the offer was valid at the time of the trial.
If the situation is reversed, and a plaintiff does not accept a reasonable offer to settle made by the defendant, the plaintiff may have to pay up-to two times the defendant’s costs of the lawsuit, starting from the day the offer was made.
How to prepare an offer to settle
If you make an offer to settle it should be in writing. It should include the date, what you are offering, how long the offer will be open, and your signature. Always keep a copy of any offer you make or receive. If you want to accept an offer made by the other party, you should do so in writing and you should keep a copy of the signed offer. Any final agreement to settle a lawsuit should be in writing and signed by everyone involved. You can create your own documents or use the Offer to Settle and the Acceptance of Offer to Settle forms available online.
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