Construction Litigation Tips: Settlement Checklist

  • May 16, 2022
  • Dan Fridmar, Fridmar Professional Corporation

One misconception I have found about lawyers is that we enjoy going to trial. As I’m sure many of my colleagues would agree, we much more enjoy when cases settle. In contrast to most other civil litigation files, settling construction lien litigation disputes can contain complicated procedural steps.

In the interest of educating more junior lawyers or those practitioners whose central focus is not construction lien litigation, I have put together a checklist of four key points that should be addressed during the settlement process (as applicable).

1) Form of Payment of Settlement Funds

Depending on the type of settlement entered into, chances are that one party will be required to make payment to the other party. As a preliminary matter, it’s always good practice to ensure that payment of settlement funds are made by way of bank draft or certified cheque to avoid any potential clearance issues or other foul play (whether intentional or not). Minutes of Settlement should also reflect a time period for not just delivery of payment, but also receipt to ensure that a party does not rely on payment being “lost in the mail” as an excuse for non-compliance.

Where a lien was vacated, it is also important to clarify whether settlement funds are paid out from the monies posted into Court or whether monies will be paid directly by the payor party. Chances are, if a lien is vacated by way of a lien bond, the party posting the bond will want it returned for cancellation and will prefer to make payment directly. It’s generally good practice to ensure that payment is received before any security is returned for cancellation.