Offers to Settle in Small Claims Court
Most Small Claims Court cases end in a settlement, not a trial. A formal written offer to settle is one of the tools the rules give each side to bring that about, and it can matter later when the judge decides who pays costs.
- Either side can make an offer to settle, in writing, and serve it on the other side.
- A clear offer states the amount, how and when it will be paid, and how long the offer stays open.
- If the other side turns down an offer and then does no better at trial, the offer can affect the costs the judge awards.
- The judge does not normally see offers to settle until the case has been decided and costs are being considered.
What an offer to settle is
Rule 14 of the Small Claims Court Rules sets out how a party can make a formal offer to settle all or part of a claim. The court has a form for it (Form 14A). A formal offer is different from a casual conversation or an email, because the rules give it specific effects, especially on costs.
What a good offer includes
- The exact amount, and whether it covers interest and costs or is inclusive of everything.
- When and how it will be paid, for example by certified cheque or e-transfer by a stated date.
- Any non-money terms, such as a retraction, a return of property or a repair.
- A full and final release of the claim, so that the matter cannot be brought again.
- How and by when the offer can be accepted, and the date it expires.
Timing
The rules set the time by which an offer must be served for it to have the costs effect described below, and they also set out when an offer can be withdrawn or accepted. Offers made well before the trial date are the most useful, because they give the other side time to think and to reconsider the risk.
How an offer affects costs
In Small Claims Court, costs are limited and are mostly about disbursements, with a modest allowance for fees and a cap related to the amount of the claim (see the costs guide). If you made an offer that the other side did not accept, and you then do as well or better at trial, the judge can take your offer into account when deciding costs, and may award you more than would otherwise be usual. This is a discretion, not a guarantee.
If you receive an offer
- Read it carefully and write down the deadline.
- Compare it with a realistic outcome at trial, after the risk of losing and the cost of time off work.
- Consider whether you can accept, counter-offer, or ask a question.
- If you accept, do it in the way the offer requires, and make sure the settlement is written down and the case file is closed as the terms say.
- Do not ignore it. An unanswered offer can still matter later.
Common questions
Will the judge see my offer?
Generally no. Offers to settle are kept from the judge until the case has been decided and the question of costs comes up.
Can I make an offer for less than my full claim?
Yes. Offers are often a compromise. Think about the cost and risk of trial when choosing the number.
Does accepting an offer end the case?
Once you accept, the terms bind both sides. Make sure there is a written settlement with a release, and that the court file reflects it, so that the claim does not continue.
Who can help. Licensed paralegals can represent people in Ontario's Small Claims Court, including at settlement conferences and trials.
This guide is general information for people in Ontario, not legal advice. Rules, forms and deadlines change, and every situation is different. Check the current rule or speak to a licensed legal professional before you act.
Not sure where you stand? A licensed paralegal can look at your documents and tell you your options.
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