Beaverbrook Update: The Value of an Offer to Settle
In a previous blog, I made note of the dispute between the Beaverbrook Foundation ("the Foundation") and the Beaverbrook Art Gallery ("the Art Gallery") located in Fredricton, New Brunswick. At issue was whether a very valuable collection of artwork was gifted or loaned to the Art Gallery by the late Lord Beaverbrook. When that blog was posted on March 1, 2007, the decision of the arbitrator, retired Supreme Court Justice Peter Cory, was pending. The decision was released not long after that blog was posted in favour of the Art Gallery; i.e. the artwork had been gifted, not loaned. Now, the Honourable Mr. Cory has released his decision respecting costs of the arbitration. On October 6, 2007, it was reported in the media that the Arbitrator decided that costs of some $4.8 million were to be paid by the Foundation to the Art Gallery, a record for a costs awards in New Brunswick (interestingly, both parties are represented by Toronto counsel). The Foundation has appealed to a three judge panel in New Brunswick.
This decision highlights the benefits of making offers to settle in the context of any legal dispute. Evidently, the Honourable Mr. Cory was persuaded that a previous offer to settle that had been made by the Art Gallery, but not accepted by the Foundation, would have saved considerable expense.
It is always difficult to make an offer to settle when the objective in any litigated dispute is total victory. Offers to settle are a necessary result of the risk assessment process in which counsel and their clients must engage in the course of litigation. Clearly, offers to settle should not be made unless the party making the offer is prepared to have it accepted. While clients may be prepared to follow the advice of counsel with respect to all other aspects of litigation, the offer to settle is often a decision that the client will adopt as his or her own regardless of the recommendation of counsel. For example, there may often be a reluctance to be the first party to make an offer to settle, or there may be an insistence to include non-monetary terms in any offer to settle. For a more detailed discussion of costs in estate litigation see this blog posting on our website.
Have a great day,
David
