In a previous blog post, we discussed certain circumstances where an accepted ICBC settlement offer can be overturned and rejected.

The question then is whether you can also reject an accepted offer from a private non-ICBC insurance company relating to medical malpractice injury claims, slip and fall injury claims and private property injury claims.

Overturning an accepted settlement offer was discussed in Wannan v Hutchison, 2020 BCSC 1233.

In this medical malpractice claim, the injured claimant suffered injuries from a naturopathic doctor.  The insurance company defending the claim on behalf of the naturopathic doctor offered to settle the claim in exchange for a signed release and a consent dismissal order.  The release included a confidentiality and non-disparagement clause which read as follows:

…The Releasor further agrees that she will in no way disparage, criticize, or otherwise negatively comment in any public matter on the Releasee, the Treatment, the Action or handling of same, or the Release between the parties. If it is proven that the Releasor has in any way breached the terms of this paragraph, then the Releasee will have the right to recover the consideration paid to the Releasor pursuant to this Release

In an email, the injured claimant’s lawyer accepted the offer on her behalf.  Almost 24 hours after, the injured claimant’s lawyer emailed the insurance adjuster and asked that the release be amended by removing the confidentiality clause.  The insurance company refused to amend the release and argued that the settlement was binding because it had been accepted.  The injured claimant brought an application to overturn the settlement offer as the confidentiality clause in the release was not agreed to.

The issue for the trial judge to decide was “whether in the circumstances of this case the court should exercise its discretion to refuse to enforce [the Settlement Agreement]” where a lawyer accepts a settlement offer on behalf of his or her client without instructions OR under a misapprehension as to what the actual instructions were.

The trial judge noted that there are 4 grounds to exercise this limited discretion to overturn an accepted settlement offer:

  1. There was a limitation on the instructions of the solicitor known to the opposite party;
  2. There was a misapprehension by the solicitor making the settlement of the instructions of the client or of the facts of a type that would result in injustice or make it unreasonable or unfair to enforce the settlement;
  3. There was fraud or collusion;
  4. There was an issue to be tried as to whether there was such a limitation, misapprehension, fraud or collusion in relation to the settlement.

Absent these very limited grounds, the accepted settlement will be binding pursuant to the principles of contract.

After considering these 4 factors along with the fact that the settlement offer was accepted by the injured claimant’s lawyer without obtaining instruction on the release from her, the trial judge concluded that “it would be unjust to enforce the agreement” and the settlement was overturned.

Interestingly, the trial judge took the COVID-19 Global Pandemic and Contract Law into account writing:

[20] I am satisfied that plaintiff’s counsel entered into the settlement under a misapprehension – both on her part and the part of her client. In these unusual times counsel are doing business differently. Instead of meeting face to face with clients, they are now forced to communicate electronically. It is a new way of doing business. That counsel inadvertently failed to attach the release to the offer to settle is not out of the realm of possibilities. I accept that counsel did not realize that she had failed to provide the release to her client until after she sent the acceptance email, and that her client did not understand the scope of the release when she instructed counsel to accept the offer.

[21] I further accept that the non-disparagement clause in this case is unusually broad and that it is reasonable that the plaintiff failed to appreciate from simply reading the offer to settle, that the non-disparagement clause would include the treatment.

If you have accepted a settlement offer from ICBC or another insurance company that you are having second thoughts about, it is important to seek legal advice as soon as possible and without delay.  If you delay, this may impact your ability to overturn the settlement.  Contact us for a free no obligation legal consultation to learn more about your legal rights and options.