Updates to the Ontario Rules of Civil Procedure

As of June 16, 2025, the Ontario Rules of Civil Procedure have been updated in two areas affecting settlement notice and partial settlements: 

1. A change to requirements to bring court approval motions under Rule 7.   

2. Amendments to Rule 49 which affects partial settlement agreements, and is now titled, “Settlement”. 

Two major changes to the court approval process: notice & redaction 

Now, a motion or application for settlement no longer needs to be on notice to any other party. Similarly, motion or application materials do not have to be on notice to any other party (7.08(3.1)). 

In addition to the change in notice requirements motion materials must also be redacted with respect to any information subject to solicitor-client privilege, or any information that could prejudice the person under disability (7.08(4) and (4.2)).  

Additional care required 

Lawyers will have to take care in redacting privileged information or documents, in addition to discussions of litigation strategy or vulnerabilities in the party under disability’s case. Virtually all of the affidavit evidence tendered in support of an approval motion is meant to inform the court of the strengths, weaknesses, and strategies at play on a given case.  

Once redacted materials are filed as required, lawyers will provide the unredacted materials exclusively to the Court (7.08(4.3)). In some cases, judges may want the motion materials served on the Children’s Lawyer or on the Public Guardian and Trustee, and the Rules empower the judge to do so (7.08(5)(a)). 

New Rule 49 – codifying partial settlement agreement requirements 

Historically, Rule 49 related to the cost consequences of formal offers to settle in the context of ongoing litigation. Additional rules will now cover partial settlements—that is, settlements between some, but not all, of the parties, even as the proceeding continues between some remaining parties. Rules discussing formal offers remain in place. 

Partial settlements have been in use for a long time in two typical forms: 

1. “Mary Carter” agreement, where the settling Defendant remains invested in an action but agrees to a pay the Plaintiff some amount of money, up to a specified maximum, subject to a future reduction if other Defendants are found to share higher proportions of liability.  
2. “Pierringer” agreement, where the settling Defendant is released from the accident entirely in exchange for a specific amount. Liability is severed as between settling and non-settling Defendants, and legal principles kick in to prevent a double recovery. 

Those familiar with the case law on partial settlements will know that parties who enter this type of agreement must immediately disclose all terms, except the settlement amount, to all other parties to the action. This requirement is now codified in Rule 49.14(4), which provides that the terms of the agreement must be disclosed within seven days, or prior to “the taking of any further step in the agreement”, whichever is earlier.  

New form required for non-settling parties 

After disclosure, a new Form 49E must be filled out, served on the non-settling parties, and filed with the Court “as soon as possible after the disclosure, and in any event no later than seven days before the parties appear in court.” (49.14(5)). Subrule 49.14(7) states that the court may respond to non-compliance by doing any of the following: 

(a)  make an order for costs, regardless of the outcome of the proceeding; 

(b)  order or permit further examinations for discovery, to be conducted at the plaintiff’s expense; 

(c)  order additional disclosure or production of documents; 

(d)  strike out all or part of a party’s evidence, including any affidavit made by the party; 

(e)  adjourn a hearing or other step that permits or requires the attendance of the parties; 

(f)  stay the proceeding; or 

(g)  make such other order as is just. 

The new rules expressly state that nothing in Rule 49 limits any requirement to disclose the amount of a partial settlement for any purpose, including to avoid double recovery (49.14(9)).