New Family Law Rules on Dispute Resolution in Newfoundland

Family law disputes have traditionally been resolved by litigation. Recently the provincial government has introduced measures to try and reduce the number of cases that end up before the Supreme Court of Newfoundland.

As of March 30, 2015, changes relating to costs in family law proceedings came into effect. With new rules on entitlement to costs, the Court has set up a regime that strongly encourages parties to make settlement offers, while still allowing for judicial discretion. The presumption is that a successful party is entitled to costs in a family law proceeding. The new rules also deal with related costs issues such as allowing a party to apply for security for costs in certain family law proceedings, and setting out the cost consequences in a situation where both parties have made an offer to settle.

New Offer to Settle Rules

Under the new rules, either or both parties can make an offer to settle one or more claims. The offer can relate to claims for custody, access, support (child, spousal, partner, or parental), or the division of matrimonial or common law property by delivering an offer to settle in a prescribed form to the other party. The offer must be signed by the person making the offer or his or her solicitor, and it may be delivered at any time after the proceeding has started. The terms of an offer to settle cannot be referred to in any court document dealing with the matter and cannot be used against the issuing party in the court process. After the matter has been resolved, a judge will review the offer. If the judge decides the offer was reasonable, there will likely be cost consequences for the person who rejected it.

At any time before the offer to settle is withdrawn or deemed rejected, a party can accept it but must also use a specific form to do so. Even if the person has previously rejected the offer or made a counteroffer, he or she can still accept it later provided that the offer hasn’t been deemed to be rejected according to the rules. Once an offer is accepted, it constitutes an effective and binding agreement between the parties. If one of them fails to comply with the terms of the agreement the other can apply to court to enforce the agreement or request other relief.

An offer is considered to be rejected if it is not accepted within the time set out in the offer to settle or before commencement of the application or trial to which the offer relates. An offer may be withdrawn at any time before it is accepted but must be done by using the proper prescribed form.

New Cost Consequences for Failing to Accept Reasonable Offers to Settle

Even with the new rules the judge still has discretion regarding whether to award costs even in a case where an offer to settle was rejected. Under the new rules, the judge will consider things such as whether the offer was as favourable, or more favourable, than the court’s decision on the matter.

The person who seeks costs must prove to the judge that he or she received an Order that was as good, or better, than the offer that he or she presented to the opposing party.

To trigger cost consequences, an offer to settle must be delivered at least 2 days before an application is to be heard or at least 7 days before a trial is to commence. In order to trigger costs consequences, a successful party that delivered the offer to settle must apply to the court within 15 days of the Order having been filed.

Existing Rules Remain on How Costs are Determined
In addition to introducing new provisions in the Rules, existing laws continue to apply. Combining both existing and new rules, the following factors apply in establishing the basis for a party’s ability to recover costs:
  • The success of a party who has behaved unreasonably or acted in bad faith;
  • The behaviour of each of the parties, including their reasonableness or unreasonableness;
  • The importance, urgency, complexity and difficulty of the issues;
  • Any conduct of a party which unnecessarily delayed the proceeding;
  • Any improper steps taken by a party;
  • A party’s denial or refusal to admit anything that should have been admitted;
  • Whether the parties made an offer to settle and the reasonableness, and length of time, of such offers;
  • If a party failed to appear at a family law proceeding or appeared unprepared or without making the required disclosure;
  • The lawyer’s rates, if a party is represented by a lawyer;
  • The time properly spent on the family law proceeding (including discussions with parties, drafting documents, attempting to settle the matter, preparing for and attending any application or hearing and preparing an order);
  • The expenses paid or payable; and any other relevant matter.

New Rules on Ordering Security for Costs in Newfoundland

A judge may also make an order for security for costs in relation to a proceeding, other than on issues of custody or access. A judge will consider the following in determining whether security for costs will be ordered:

  • If a party resides outside Newfoundland;
  • If a party already has an order against the other party for costs that remains unpaid;
  • If the party is a corporation and there is good reason to believe it does not have enough assets in Newfoundland to pay costs;
  • If there is good reason to believe that the case is frivolous, improper, vexatious or unnecessary and the party does not have enough assets in Newfoundland pay costs;
  • If a party has assets which are the subject of the family law proceeding that he or she is attempting to dispose of, hide or waste; and
  • Any other relevant reason.

If a party does not provide security for costs as ordered, the judge may make an order to dismiss the party’s case, strike out the party’s pleadings, note the party in default, provide relief as the court deems appropriate.

Anticipated Impact of the New Dispute Resolution Rules on Families

The new changes were introduced as a further means to encourage families to try and resolve matters on their own without the need for court involvement. The high volume of family law litigation causes lengthy delays and backlog for more critical litigation as well as resulting in higher costs to taxpayers. While sometimes going to court is unavoidable, it is hoped that the new rules will assist parties in negotiating settlements.

Negotiation allows both parties to have a say and stay involved in the decision-making process. While accepted offers to settle typically do not provide all that a litigant is seeking, in most cases the Court itself does nor Order everything that a party is seeking. Even when costs are awarded to a wholly-successful party, they are normally not in line with the actual costs incurred by the litigant to go through the trial process. In addition to legal expenses and disbursements, litigants must take time off work and the trial process is usually highly stressful for all parties involved.

When you have a family-law matter in Newfoundland, it is highly recommended that you retain a qualified and experienced family law lawyer. Your lawyer can help you in all areas of the dispute including preparing an offer to settle, reviewing offers from the opposing party, and making and reviewing counter offers. To protect your interests, if you’re in need of legal services, contact a family-law lawyer at Gittens & Associates today.

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