The Importance of Knowing the Law Governing Offers

Though the decision of the Ontario Court of Appeal in Rider v Dydyk has been around for over 5 years, it seems that Rule 49 Offers are often unclear and the subject of debate. Often Insurers make their Rule 49 Offer on a net basis for general damages (which, if below $100,000.00 is subject to a $30,000.00 deductible for the main plaintiff and a $15,000.00 deductible for any plaintiffs under the Family Law Act). In order to trigger Rule 49 cost consequences, the Offer must include the gross amount of general damages.

The Court of Appeal in Rider v Dydyk, 2007 On C.A. 687, held that offers of settlement that fairly reflect the plaintiff’s actual damages, without deduction, will encourage settlement. The Court of Appeal found that the Divisional Court’s 2004 decision in Wicken v Harssar was wrong in its interpretation of the interaction between ss. 267.5(7) and 267.5(9) of the Insurance Act and Rule 49 of the Rules of Civil Procedure. It confirmed that “the correct interpretation is in accordance with the clear words used – the statutory deductions from a plaintiff’s assessed damages are not to be considered in determining a party’s entitlement to costs”. In this case, the amount of the award to the Plaintiffs before the statutory deductible was greater than the Defendant’s Rule 49 Offer, so the Defendant was not entitled to costs from the date of its Offer.

It is important that both Defendants and Plaintiffs know the law governing Offers when crafting and considering Offers as they could have considerable cost consequences.

For more information on Offers contact Meghan M. Hull Jacquin (416) 361-7561 or

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