Resiling from a Settlement Agreement

In discipline matters, a settlement agreement should be taken seriously. While there may be rare circumstances where a party can resile from such an agreement (e.g., inadequate explanation by legal counsel), for the most part they are binding.

In Law Society of Ontario v. Ejidike, 2020 ONSC 6228 (CanLII), http://canlii.ca/t/jb6nx a practitioner agreed to certain facts being used to support a finding of professional misconduct against her. In return for this agreement the regulator agreed not to pursue the substantial costs ($150,000) that it would otherwise have sought. Shortly after the hearing, the practitioner repudiated the agreement, saying that she had made a terrible mistake, and she brought a motion to withdraw her admissions. The motion was unsuccessful. The regulator then sought and obtained an order for the practitioner to pay the substantial costs.

The practitioner argued that since the agreement was still being relied upon, the regulator should be bound by its commitment not to seek costs. The Court disagreed. What the regulator had bargained for in the settlement agreement was the certainty that the facts would not be disputed. By repudiating the agreement and bringing a motion to withdraw her admissions, the practitioner had taken away that certainty. As such, the regulator had lost the benefit of the agreement and was entitled to seek substantial costs.

Settlement agreements are generally to be taken as final, and attempts to withdraw from them contain significant risks to the repudiating party.

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