Settlements Affecting the Disabled and Minors
Settlements of claims involving the interests of minors and persons under disability, whether or not actual litigation proceedings have been commenced, must be approved by a Judge according to Rule 7 of Ontario’s Rules of Civil Procedure in order to be binding on the minor/disabled.
Although vital to protect the vulnerable, this rule can cause unexpected additional legal fees and delay. Those costs and delays can come at the worst time, since often parties think a matter is settled and they can get on with their lives, only to find that the Court can put the brakes on the entire deal. Sometimes the interests of the incapable person or minor will only come to pass under certain circumstances, for example if an adult beneficiary dies before a specified time or event. Those interests, referred to as contingent interests, can get lost in the shuffle of litigation and settlement negotiations, only to raise their ugly heads after the deal is struck.
It also is not a given that the deal will survive the scrutiny of the Court, and it is not the Court alone which will be reviewing any deal. The Children’s Lawyer (the "OCL") will need to be notified of a settlement affecting a minor, and the Office of the Public Guardian and Trustee ("OPGT") of a settlement affecting an incapable person. Those two officials/offices will deliberately look at any deal only from the perspective of the vulnerable, not at the benefits of the deal as a whole.
The Court often places considerable weight on the positions of the OCL and OPGT, and those positions should never be taken for granted. For that reason, they should be notified at the outset of any proceeding so that they can take part in the negotiations leading to the deal.
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