In the realm of wills and estates, solicitors’ negligence claims often focus on estate planning and the execution of testamentary instruments and the corresponding standard of care.[1] However, such claims can also arise from estate litigation and even the settlement of estate claims. This danger is aptly demonstrated by Wiener v. Strickland,[2] a recent solicitor’s negligence case in which a client alleged that his former lawyer did not follow his instructions during estate mediation. Inspired by the Court of Appeal’s decision in this case, this article focuses on minimizing the risk of negligence claims arising from assisting clients in the settlement of estates disputes. First, the article reviews the test for solicitor’s negligence applicable to settlements; then it identifies some precautions that lawyers can take when assisting clients with the settlement of estate litigation, to minimize the risk of future negligence claims.
The Test for Solicitor’s Negligence
Historically, lawyers could only be held liable for their conduct during settlement negotiations in clear and exceptional cases of “egregious error” due to public policy considerations, including the desire to “discourage suits and encourage settlement.”[3]
Today, however, there is no justification for holding lawyers to a lower standard when assisting with the settlement of litigation than in other aspects of their role,[4] particularly in light of a lawyer’s obligation to otherwise act with reasonable care, skill and knowledge.[5] Accordingly, proof of an egregious error is no longer required to establish solicitors’ negligence arising from a settlement.[6] Instead, counsel are required to meet the reasonableness standard,[7] meaning that the advice counsel gives must be within the range of reasonable choices, and that counsel must exercise the “effort, knowledge and insight of a reasonably competent lawyer.”[8] The reasonableness or prudence of a settlement and of a lawyer’s advice is to be assessed in light of the circumstances and information that was available when the settlement was reached, “and not with the benefit of hindsight or after acquired information.”[9]
On a related note, an error of judgment will not give rise to actionable negligence as long as the lawyer exercised their judgment with “the effort, knowledge and insight of a reasonably competent lawyer … even if the decision proves to be disastrous.”[10]
Meeting the Reasonableness Standard
There are a plethora of factors that may be considered when assessing the reasonableness of a settlement, depending on the nature of the underlying claim, the specific facts of the case, and the risks inherent to proceeding with the litigation.[11] Even the quality of evidence expected from witnesses and anticipated views as to their credibility may be pertinent.[12] While it would be impossible to address all factors which may be relevant to ensuring that a settlement meets the reasonableness standard here, a few considerations that are relatively universal in nature, which can be applied to a variety of types of litigation, are addressed below.
Exercise Caution When Recommending Making/Accepting an Early Offer
When providing advice for the purpose of settling an estate claim, counsel ought to be mindful of the stage of the litigation. Accepting a settlement too early during negotiations may be considered negligent, particularly if it is probable that another, better offer may be made later, or if taking further steps in the litigation would strengthen the client’s bargaining position.[13]
In estate litigation, other factors may also make it unwise for a client to take an early settlement. Consider a will challenge, for example – it can be imprudent for any of the parties to settle before the court determines whether the minimal evidentiary threshold has been satisfied. Looking first to the propounder of the will, settlement negotiations will not be justified unless it would be reasonable to alter the distribution of the testator’s estate and stray from the instructions under the will. If the threshold is met, meaning there is “some evidence which, if accepted, would call into question the validity of the testamentary instrument,”[14] negotiations will be merited, whereas if the threshold is not met and the will challenge is dismissed, there would be no reason to negotiate. On the flip side, it may also be unwise strategically for a will challenger to settle before the threshold has been met, as passing the threshold, if likely based on the evidence they have advanced, can strengthen the challenger’s bargaining position and would also likely yield disclosure from the estate and/or third parties.[15]
Discuss Settlement Without Pressuring the Client
Discussing settlement with a client can be stressful. As noted by Justice Martin, “[o]ffers of settlement often generate stress as they force parties to consider their positions based on imperfect information,” in circumstances where there may be costs consequences should the litigation continue.[16] While counsel has a duty to disclose all information pertinent to settlement to the client and advise them during this stressful time,[17] it is imperative that counsel make it clear that it is ultimately up to the client to choose whether to accept a settlement offer, or alternatively, extend an offer or counter-offer. If this is not clear, a disgruntled client may subsequently bring a claim against the lawyer, alleging that counsel breached their fiduciary duty by pressuring the client to settle, thereby protecting the lawyer’s financial interests over the client’s (assuming that the lawyer also benefitted financially from the settlement).[18] One practical precaution that lawyers can take to undermine such claims is communicating information regarding settlement negotiations with the client in writing, and also summarizing all in-person settlement discussions in writing so they can be put on the file.
Confirm the Client’s Instructions
During settlement negotiations, counsel may only settle a claim in accordance with the client’s instructions, making it essential to fully understand the terms upon which the client is prepared to settle. To prevent ambiguity, it is advisable to ensure that the client’s instructions are recorded in writing, including the amount the client would be willing to accept plus any other essential terms, and are affirmed by the client, preferably with a signature, before settlement negotiations conclude.[19] If the client does end up bringing a negligence claim against counsel, the nature of the instructions given to counsel may be relevant to the outcome.[20]
Explain the Reach of a “No Claims Over” Clause
It is also advisable to explain to the client that typically a settlement will only bind the parties to the litigation. While it is possible that third parties could also be protected by a “no claims over” clause in a standard form release, the reach of such a clause ultimately ought to be interpreted in light of the objective intentions of the parties to the settlement when the settlement was entered. This point is especially salient if the client’s instructions make it clear that the client will only settle if the ability to commence a related proceeding against a specific third party or parties is preserved. Under such circumstances, counsel ought to take care that none of the terms of the settlement documents could be construed as precluding litigation against that third party, in order to undermine any potential future solicitor’s negligence claim.[21]
Closing
There is no guaranteed way to prevent a solicitor’s negligence claim from arising following the settlement of estate litigation. Thankfully, perfection is not required when assisting clients; rather, the advice given must meet the reasonableness standard. To try to prevent or undermine subsequent negligence claims, counsel may want to keep the strategies discussed above in mind. More specifically:
- Counsel should refrain from recommending a settlement prematurely; such a recommendation may be negligent.
- While advising a client regarding settlement, a lawyer should be careful not to pressure the client and should create a record indicating that the client was advised that settlement decisions were theirs alone.
- The client’s instructions regarding settlement should be affirmed in writing.
- For most settlements, it will not be necessary to carve out third parties that the client still wants to sue from a “no contest clause” in a standard form release, but counsel should be careful to ensure nothing in the settlement documents would preclude the client from pursuing such claims if that is their intention.
[1] See, for example, Hall v Bennett Estate, 2003 CanLII 7157 (ON CA); Graham v Bonnycastle, 2004 ABCA 270, leave to appeal refused 2005 CarswellAlta 493; Johnston Estate v Johnston, 2017 BCCA 59. See also Kimberly A. Whaley, “Solicitor’s Negligence: Estates and Trust Context” (2016) 45 Adv. Q. 102, online: WEL Partners .
[2] Wiener v Strickland, 2024 ONCA 394 [Wiener].
[3] See Karpenko v Paroian, Courey, Cohen & Houston, 1980 CanLII 1988 (ON SC).
[4] Folland v Reardon, 2005 CanLII 1403 (ON CA) [Folland] at paras 41-42.
[5] Central Trust Co. v Rafuse, 1986 CanLII 29 (SCC) at para 58; see also Ristimaki v Cooper, 2006 CanLII 12415 (ON CA) [Ristimaki] at para 59.
[6] Ristimaki, ibid at paras 60-61.
[7] See Hopkins v Murphy, 2024 ONSC 3698 [Hopkins] at paras 20-21.
[8] Basandra v Guerette, 2018 ONSC 582 at para 8; Hopkins, ibid at para 21.
[9] Adeshina v Litwiniuk & Company, 2010 ABQB 80 [Adeshina] at para 335. This case was determined by Justice Martin, who now sits on the Supreme Court of Canada.
[10] Folland, supra note 4, at para 44. See also Adeshina, ibid, at para 112.
[11] Adeshina, ibid, at paras 334, 336. Justice Martin notes that determining the standard of care applicable to a negligence claim arising from a settlement entails “a complex and multifactorial assessment involving estimates of the range of risk and evaluations based on necessarily incomplete information.”
[12] Ibid, at para 334.
[13] Ristimaki, supra note 5, at paras 62-63. As noted by the Court, in most cases it would be unusual for a first settlement offer to also be the last.
[14] See Neuberger v York, 2016 ONCA 191 at para 89.
[15] Johnson v Johnson, 2022 ONCA 682 at para 16-17.
[16] Adeshina, supra note 9, at para 378.
[17] Ibid, at para 374. For example, as noted at para 317, it is important to advise the client of any outstanding costs and disbursements which they will be responsible to pay if the litigation settles.
[18] See Adeshina, ibid, at para 385.
[19] For example, counsel had the terms upon which the client was willing to settle their lawsuit recorded in writing and signed by the client in Adeshina, ibid: see para 315.
[20] See 1483677 Ontario Ltd. v Howard, 2015 ONSC 6217 at para 55; Bari v Ahuja, 2017 ONSC 7693 at para 64.
[21] See Wiener, supra note 2, at paras 20-22. In this case, the client argued, unsuccessfully, that counsel’s settlement precluded him from being able to pursue a claim against the lawyer who represented one of the other parties.
