GOOD CHANGE: AMENDMENTS TO THE RULES FOR SETTLEMENT APPROVAL MOTIONS FOR PARTIES UNDER DISABILITY

Sep 5, 2025

On June 16, 2025, important amendments to the Rules for obtaining court approval of settlements involving parties under disability came into force.[1] These amendments preserve the open court principle to the greatest extent possible while ensuring that incapable parties are not prejudiced by processes designed to protect them.

Under Rule 7.08 any settlement involving a party under disability[2] is not binding on that party without a judge’s approval of the settlement. A judge must find that the settlement is in the best interests of the incapable party, considering the benefit received under the settlement, litigation risk, proportionality, and the desire to settle.[3] This safeguard is built into our judicial system to ensure that parties under disability are not taken advantage of.

To obtain settlement approval, the incapable party’s litigation guardian must bring a motion to the court, supported by an affidavit from the litigation guardian explaining the reasons in support of the settlement, as well as an affidavit from the litigation guardian’s lawyer providing a position in respect of settlement.

Under the previous rules, it was necessary to serve the motion for settlement approval on all parties to the litigation. In some cases, to show a judge why a settlement is justified and in the incapable party’s best interests, it is necessary to disclose weaknesses of the incapable party’s case. This created a risk: if the settlement were not approved, the other parties could potentially benefit from prejudicial information disclosed in the approval motion. Counsel were required to carefully consider what information was necessary to provide the court without undermining the party’s position if the settlement was not approved.

The new amendments contain key changes that ensure parties under disability are not prejudiced by these motions.

Rule 7.08(3.1) now allows settlement approval motions to be brought without notice to other parties and without requiring service of the supporting materials (unless a judge orders otherwise).

Pursuant to Rules 7.08(4.2) and 7.08(4.3) counsel are required to redact or omit any information subject to solicitor-client privilege or that could prejudice the person under disability prior to filing the motion materials. Now, only the judge hearing the motion is provided with a copy of the complete and unredacted version of the materials.

Rule 7.08(4.4) requires that settlement approval motions be determined in writing, without the attendance of the parties, and dispenses with the requirement to file a factum. This prevents opposing parties from hearing oral submissions on evidence that was redacted or omitted from the written materials.

These amendments helpfully and thoughtfully ensure that the court receives fulsome information about a party’s litigation risk, weaknesses in the case, and any other factors that support settlement, without risking prejudice to the incapable party’s position if the settlement is not approved.

 

[1] This blog focuses on Rules 7.08(3.1), 7.08 (4.2), 7.08(4.3), and 7.08(4.4). For a review of all amendments that came into force on June 16, 2025 please review O.Reg 50/25.

[2] Parties “under disability” include minors and adults who lack the mental capacity to engage in litigation.

[3] Spicer v Wawanesa Mutual Insurance Company, 2023 ONSC 3221

 

Rebecca Suggitt 

Nothing contained in this post constitutes legal advice or establishes a solicitor-client relationship. If you have any questions regarding your legal rights or legal obligations, you should consult a lawyer.

WHEN BONDS AREN’T WORTH IT: SEEKING TO DISPENSE WITH BONDS IN GUARDIANSHIP APPLICATIONS

Mar 11, 2025

A guardianship application involves applying to the court to be appointed as an incapable person’s substitute decision maker for property management and/or personal care decisions.

When a party applies to the court to be named a guardian, this usually means that the incapable party did not have a power of attorney in place. The process can be stressful and regularly arises when family members realize they need to begin making financial decisions for the incapable party but are unable to do so without a power of attorney for property in place.

To complicate matters further, applicants seeking to be a loved one’s guardian of property are regularly required to obtain expensive bonds as security to ensure the safety of the incapable party’s assets.

The judge hearing the guardianship application will determine whether or not it is appropriate to forgo the requirement that a guardian obtain a bond (see: Grant v Robinson, 2024 ONSC 1558 and Connolly v. Connolly and PGT, 2019 ONSC 4148).

It is important to discuss with a lawyer the information a judge will need to determine whether a bond is necessary in the case at hand. Every situation is different, but it is often helpful to provide evidence on the following:

  1. The proposed guardian’s relationship to the incapable party. For example, a court may be less inclined to order that the spouse of an incapable party obtain a bond, especially where assets have always been jointly held between the proposed guardian and the incapable party.
  2. Whether the proposed guardian resides in and has assets in Ontario that could be used to repay the incapable party in the event funds are mismanaged or misappropriated.
  3. Information on the incapable party’s assets and the funds required to meet the incapable party’s care needs.
  4. Information on the estimated cost of a bond and whether the cost will be burdensome for the incapable party or is disproportionate to their assets.
  5. Whether the incapable party has made any specific gifts in their will.
  6. The proposed guardian’s intention to continue relationships with or retain professionals such as accountants and financial advisors to provide advice on investment strategy and the incapable party’s financial obligations.
  7. A plan to seek an order that the proposed guardian shall bring an application within two to three years to “pass their accounts”. A passing of accounts application requires the guardian to show the court all transactions related to the incapable party’s funds during the accounting period. The need for a bond can be reassessed on each passing application.
  8. A clear, common sense management plan that shows how the proposed guardian intends to manage the incapable party’s funds.

Overall, when bringing a guardianship application, it is critical to provide evidence on the proposed guardian’s honesty, integrity and their dedication to acting in the incapable party’s best interest. These factors and the specific examples above may militate against a finding that a bond is necessary.

 

Rebecca Suggitt 

Nothing contained in this post constitutes legal advice or establishes a solicitor-client relationship. If you have any questions regarding your legal rights or legal obligations, you should consult a lawyer.