Our readers may recall we previously wrote about the dangers of failing to disclose partial settlement agreements to non-settling parties (that initial post is linked here). In that post, we reviewed jurisprudence from Ontario where parties are subject to the "Immediate Disclosure Rule". The immediate disclosure rule states there is a clear and unequivocal obligation to disclose agreements that change the landscape of the litigation. In Ontario, failure to disclose such agreements can constitute an abuse of process, resulting in serious remedies such as a stay of proceedings of the defaulting party. There may also be cost consequences.
There is now recent jurisprudence on this issue from the Alberta Court of Appeal. The Alberta Court of Appeal has taken an approach that is similar to Ontario's immediate disclosure rule of settlement agreements, provided they "drastically alter the litigation landscape." This rule is discussed in the recent case of Ball v. 1979927 Alberta Ltd., 2024 ABKB 229 (here). The Court of Appeal held that disclosure is an absolute requirement and any delay in doing so, event absent prejudice, will result in an abuse of process and the potential for a permanent stay of the action.
This represents a cautionary tale for litigants and signals the importance of the disclosure obligations regarding settlement agreements to non-settling parties, and the consequences if the disclosure obligations are not adhered to.
In B.C., the same duty to disclose has not been as clearly articulated (yet). We will keep our readers apprised of this area of law as it develops.
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