Disclosing a Settlement within a Litigation - Mandatory

Settlements between Parties in Multi Party Litigation Must be Disclosed Immediately, Court of Appeal Ruled.

In following the reasoning in the case of Aecon Buildings v. Stephenson Engineering Limited, 2010 ONCA 898, where it was held that “any failure to do so will amount to [an] abuse of process and must result in consequences of the most serious nature for the defaulting party.”, the court recently ruled in Hamilton-Wentworth District School Board v. Zizek, 2022 ONCA 638, that where the parties, in a portion of the litigation settle and do not disclose the settlement to the other parties and to the court, this conduct may be an abuse of process, and the entire proceeding may be stayed. The disclosure must be immediate.

It is unclear if the court contemplated disclosing settlement potential or negotiations, prior to actual settlement, but it would follow that if the completed settlement must be disclosed to the other parties, then counsel should be aware that they should be communicating that discussions are occurring towards the potential for settlement, to other counsel.