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We all wish that most litigants would settle before trial, and thus save themselves time and money, and save the overburdened courts a trial. The main Rule which encourages settling is R. 4.29. It awards or increases costs where someone betters an offer. But many counsel and even a few judges, have dodged that clearly-worded Rule. Some judges may think that the Rule is acceptable providing that they maintain full power to ignore it when they wish. In the past, some King's Bench judges tried to invent new excuses to ignore R. 4.29.

A very recent Court of Appeal decision is clear on this topic, though the relevant passages are buried toward the end of a long judgment. There the Court of Appeal confirmed a trial judge who followed R. 4.29 and refused to dilute R. 4.29 costs for “proportionality”. First, the Court of Appeal pointed out that costs for bettering an appeal come from a separate Rule (R. 4.29), not from the general costs Rules (¶ʼs 157 and 165). So therefore what R. 4.29 awards (such as double the ordinary costs) should not be weighed to see if it is “proportional”, the way that one would if there had been no offer to settle (¶ʼs 157 ff). That makes sense; by definition double costs are greater than ordinary costs.

The Court of Appeal also held that early offers to settle are proper, and indeed are one of the main aims of R. 4.29 (thus contradicting some King’s Bench decisions a few years ago) (¶ 157). (See also Stevenson & Côté Handbook R 4.29 nn. A, B.1, and F.1, and Droog v. Hamilton (#2) 2025 ABCA 302 (Sep 8) (¶ 5).)

The Court of Appeal also pointed out that ignoring the costs consequences of an offer dictated by R. 4.29, would make formal offers meaningless (quoting an earlier Court of Appeal decision) (¶ 158). Rule 4.29 deliberately makes costs consequences more severe where someone has rejected an identifiable and sufficient compromise (¶ 158).

The judge cannot ignore or bypass R. 4.29 unless offer was tardy, or “special circumstances” exist (subrule (4), Stevenson & Côté Handbook R. 4.29 nn. C, F.1, F.2.). Double costs are not ordinarily such special circumstances (¶ 160).

So, one cannot dodge R. 4.29 when the outcome of the trial is hard to predict. Settling what is unclear is part of the aim of the Rules on offers to settle. Most lawsuits involve some element of unpredictability or luck. The more that is so, the more a trial resembles roulette. Conversely, the party who made and bettered an offer, often saw law or evidence or fairness which the other party did not see or did not fully appreciate. (See also Stevenson & Côté Handbook R. 4.29 n. B.1.)

This recent Court of Appeal decision is Signalta Res. v. Canadian Nat. Resources 2025 ABCA 306 (Sep 12).

– Hon. J.E. Côté

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