$13,500 settlement in limbo as plaintiff refuses to sign
The Ontario Superior Court of Justice has confirmed that a "no admission of liability" clause is a standard inclusion in settlement agreements, specifically in cases involving personal injury claims. The ruling came after a dispute over the terms of a release document required to finalize a settlement.
The case involves Maria Godoy, who was injured after walking into a glass wall. The parties settled the matter during a mediation session on November 22, 2022, with the defendants' insurers agreeing to pay $13,500. However, the settlement was contingent on Godoy signing a release, the terms of which were to be agreed upon by both sides.
Godoy refused to sign the release because it contained a "no admission of liability" clause. To resolve the issue, the parties attended a case conference, where the court was asked to rule on the matter rather than move to a formal motion. The court found that there were no factual disputes requiring further examination.
The Superior Court found that the "no admission of liability" clause was a standard component of settlement agreements, particularly in insurance-related cases. The judge noted that while the specific terms of the release were not discussed during mediation, the inclusion of such a clause is standard practice.
Godoy argued that the clause was unusual and supported her claim with extensive research. However, the court disagreed, referencing the case Churchill Inc. v Teti Transport Ltd., 2020 ONSC 7577, which established that when a settlement agreement does not specify the content of a release, a standard form release is implied. This standard form is consistent with the settlement terms, including a "no admission of liability" clause when the defendants deny liability throughout the proceedings.
The court also cited Bouzanis v. Greenwood, 2022 ONSC 5262, which clarifies that a standard form release can be implied in settlement agreements if not explicitly detailed.
As a result, Godoy is now required to sign the release with the "no admission of liability" clause, in accordance with the original settlement agreement. No costs were awarded in this decision.
