Rule 7.08 of the Rules of Civil Procedure states that no settlement of a claim involving a person under disability is binding on that person unless the settlement is approved by a judge. Why court approval of settlements is necessary is succinctly summarized in Wu Estate v Zurich Insurance Co.: “The purpose of court approval is plainly to protect the party under disability and to ensure that his or her legal rights are not compromised or surrendered without proper compensation.”
Approval of a settlement is obtained by way of motion to a judge (or, less common, by way of an application). Rule 7.08 also sets out the material to be filed in support of the motion for approval of the settlement, which includes supporting affidavits from the litigation guardian and solicitor for the litigation guardian.
Given that mediation is mandatory in Toronto, Ottawa, and Essex County for estates, trusts, and guardianship matters (for a detailed list of the types of proceedings which require mediation, see rule 75.1.02), and that these types of proceedings often involve a party under disability (be it a minor or an adult who lacks the mental capacity to participate in litigation), motions to approve settlements are standard fare for estates litigators. However, Justice Dunphy’s recent decision in Geisler (Litigation Guardian of) v Boochoon reminds lawyers that just because a motion is routine does not mean that the same routine suits all motions.
In Geisler, the plaintiff was a 92 year old woman who was hit by a car while out walking. The plaintiff was represented by her daughter as litigation guardian. The daughter, through her counsel, reached a settlement of the woman’s claim – $49,800.00 all in. The lawyer brought a motion to approve the settlement.
The judge held that the evidence provided on the motion was insufficient to allow the Court to exercise its discretion to approve the settlement. The judge held that the material submitted was too “summary” in nature, consisting of little else than the proposed terms of settlement and a breakdown of how the settlement payment was to be allocated. In particular, no information was provided about the extent of the woman’s injuries or what medical treatment(s) she required after the accident. The affidavit evidence also did not explain whether the woman’s cognitive decline was related directly to the accident, or was a pre-existing condition. As a result, it was impossible for the Court to decide whether the settlement amount would adequately protect her needs.
In addition, the Court criticized counsel for providing no evidence to justify the legal fees charged. Rather pointedly, the Court held: “Counsel should be quite confident that fees that are not justified will be fees that are not approved.”
While counsel in this case clearly did not submit enough evidence, the judge was careful to note that he was not requesting minute details of the litigation either. The Court held: “These applications need not turn into telephone directory-sized motions to approve relatively routine settlements. The court is not interested in adding expenses to the process or in discouraging counsel from representing parties under disability on smaller-level cases. However, “phoning it in” with a bare-bones application will not do the trick either. A reasonable level of detail enabling the judge to appreciate the facts … is needed. From our end, we [the court] will ensure that our demands and our review adhere to the principles of proportionality enshrined in Rule 1.04(1.1) of the Rules of Civil Procedure.”
In the result, the judge adjourned the motion and directed the plaintiff to provide a further affidavit addressing the deficiencies noted in his materials.