Revoking a Rule 49 Offer to Settle

July 9, 2015 Noah Weisberg Litigation Tags: , , , , , , 0 Comments

Throughout the course of litigation, it is often the case that counsel exchange offers to settle in accordance with Rule 49 of the Rules of Civil Procedure.  Should counsel decide to withdraw such an offer, proper steps must be taken to ensure that the offer is in fact withdrawn, and does not improperly linger.

The general rule with respect to revoking an offer can be found under the statute.  The Rules at Rule 49.04(1) – (4), provide three ways to revoke an offer: (i) by serving written notice of withdrawal of the offer on the party to whom the offer was made; (ii) by specifying a time within which it may be accepted whereafter, if not accepted, it is deemed to be revoked; or (iii) by disposition of the claim by the Court prior to acceptance of the offer.

Importantly, an offer to settle is not terminated by a counter-offer or rejection as indicated in Rule 49.07(2).  As such, even if the offeree rejects the offer to settle, it may thereafter be accepted, unless it has been properly withdrawn or the court has disposed of the claim.

According to the common law, a written offer can only be withdrawn in writing, and cannot implicitly be withdrawn by a subsequent oral offer.  However, a subsequent offer may constitute the withdrawal of the prior offer.  According to Justice Gray in Desforge v. E.D. Roofing Ltd., “…a decreasing offer by a plaintiff, without reference to the earlier offer, is by implication a withdrawal of the earlier offer”.  Therefore, the common law appears to impose an additional means to withdraw an offer to settle.  A further offer to settle, which is less generous than the previous offer, acts to withdraw the prior offer even if it is not specifically referenced.

Noah Weisberg

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