In recent years, mediation has seen a growing role in litigation, especially in estates cases commenced in Toronto, Ottawa, and the County of Essex, where, under Rule 75.1 of the Rules of Civil Procedure, mediation is mandatory. This shift encourages negotiated settlements, which may take shape through more informal discussions as opposed to the rigorous formality of court proceedings.
The relative informality of a mediated settlement does not, however, preclude the necessity of adhering to fundamental principles of contract law, and the formation of binding agreements.
A recent matter, Estate of K.D.F. v.TD General Insurance Company, before the Ontario Licence Appeal Tribunal, dealt with the issue of whether a settlement agreement, which was not fully signed and finalized by the applicant prior to her death, was valid and enforceable.
The facts involve a series of tragic circumstances. The applicant, who was involved in two automobile accidents in short succession, was seeking benefits from TD Insurance pursuant to the Statutory Accident Benefits Schedule. The matter proceeded to mediation, where the parties came to an agreement on terms concerning a settlement for both accidents. Minutes of the settlement concerning this agreement were circulated to all parties. Shortly after this, the applicant died at the hands of her mother, never having signed the releases for any of the four settlements that were agreed upon at the mediation. Further, between the time of the meeting at which the settlement was agreed upon and the applicant’s death, discussions had been ongoing as to how the settlement would be structured.
Three of the four settlement releases were signed by the applicant’s sister, who was acting as her Litigation Administrator; however, the fourth was disputed by TD Insurance, who claimed that there was no enforceable agreement.
The Tribunal ultimately decided that there was a binding settlement agreement despite the fact that the deceased applicant had not personally provided how the settlement would be structured nor signed the final release. The Tribunal cited in support of this decision Riggs Estate v Intact, in which the court stated: “while there is a presumption that the insured person will sign the document, it is not uncommon for a recipient of accident benefits to be under the age of majority or be suffering from a physical or mental disability that legally prevents them from signing the document without the assistance of a representative. The court opined that there is no distinction between an insured under disability who cannot sign an SDN and a deceased insured …”.
On this basis, the sister of the applicant, who was an authorized person to act on behalf of the applicant’s estate, had clear authority to sign off on the settlement agreement, including the releases.
TD Insurance also raised an alternative argument that, as the parents of the applicant were the beneficiaries of her estate, and the mother was involved in the death of the applicant, payment should not be made under the slayer rule. The Tribunal dismissed this argument citing affidavit evidence that the applicant’s sister and aunt, who were assisting with the administration of the estate, were taking active steps to ensure that the estate would flow to the sister, and further, that the mother had confirmed she did not wish to be part of the settlement, and would sign renunciation papers as soon as possible.
This was an interesting look into the enforceability of settlements and the weight mediation and agreements reached therein can have. While mediators themselves may not produce any binding decisions, the agreements reached between parties can be binding.
Thank you for reading and have a great day!
Suzana Popovic-Montag & Raphael Leitz