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| Feb 28, 2014
As counsel, are you confident in knowing when an offer to settle is no longer on the table? What conduct by one or the other party will be enough to revoke it? Although Rule 9-1(8) of the British Columbia Supreme Court Civil Rules states that an offer to settle does not expire by reason that a counter offer is made, it does not specifically address the issue of revocation of a "formal" settlement offer when an "informal" settlement offer is made by the same party. When this occurs, is there a revocation of the original formal offer?
Such an issue was addressed in Arsenvoski v. Boden, 2014 BCSC 199, where the Plaintiff was hurt in a motor vehicle collision, and consequently advanced a claim. At one point during litigation proceedings, ICBC’S lawyer made a formal offer to settle, which was rejected. Counsel for the Plaintiff then made a formal offer to settle, which was rejected, which was later followed by another formal offer to settle by the Plaintiff in a lower amount, which was again rejected.
Counsel for the Defendant then made an informal offer to settle for a consent dismissal order in exchange for a waiver of the Defendant‘s costs, which was not surprisingly rejected. The Plaintiff then attempted to accept the Defendant‘s first formal offer, which was rejected by counsel for the Defendant. The Plaintiff brought an application to enforce the Plaintiff‘s purported acceptance of the original formal settlement offer, however the Court ruled that the original formal settlement offer had indeed been revoked by the Defendant‘s subsequent informal offer.
In essence, the Court ruled that in the absence of language in Rule 9-1 with respect to revocation of a formal settlement offer, the common law would apply.
 … I agree with the following statement of the law by Wilson J. in Sidhu v. Sekhon,  B.C.J. No. 102 (S.C.) at para. 8:
I think interpretation of the rule contemplates the application of principles of contract law. And that those principles must be implemented before resort is had to policy considerations. In my view, those principles establish a number of precepts. First, an offer may be withdrawn before acceptance. It is sufficient for that purpose, if the offeree has actual knowledge that the offeror has done some act inconsistent with the continuance of the offer. Further, the addition of a new term or condition, to an earlier offer, before acceptance, is the withdrawal of the earlier offer, and the submission of a new offer, of which the new condition or term is a part. From the time the new condition is submitted, the earlier offer is withdrawn, and is no longer open to acceptance or rejection, by the party to whom it was presented. Finally, there can be only one offer outstanding at a time. A later offer to the same offeree, on the same subject matter, has the effect of cancelling the prior offer.
The case is significant in that Rule 9-1 is different from its predecessor Rule 37 in the sense that, with the latter, it may have been possible that a formal settlement offer would not have been revoked by an informal settlement offer. The Court made it clear, however, that this is no longer the case with respect to Rule 9-1.
In light of judicial pronouncement on this issue, counsel would be wise to note the distinction between the old and new Rules, and not automatically assume that the settlement and negotiation process is so liberal as to permit formal and informal settlement offers to exist at the same time.