Oct 4, 2021

Every lawyer knows that full and final releases (FFRs) are great tools for conclusively resolving matters. However, FFRs aren’t all created equal and you can quickly find yourself in hot water if you don’t consider these 3 things before agreeing to give or have your client sign one.

1. Is the Scope of the Release global or just in relation to the Issues at hand?

The presumption amongst many lawyers in Ontario is that by simply agreeing to enter into a FFR everything and anything is naturally going to be covered by the release. But, this simply isn’t the case. The courts will not help you fix this mistake after settlement is reached, unless you were specific in your communications with opposing counsel regarding what type of release your client was seeking in the first place.[1]

Therefore, before agreeing on behalf of your client to give or provide a FFR, consider whether your client would be better served by a global all-encompassing one, that covers all possible matters (known and unknown), or, whether your client should agree to only resolve the particular matter at hand. In the absence of specificity, it will be the latter, and not the former, that is presumed by the courts.

2. Is there a Need for a Confidentiality Clause?

When parties resolve litigation matters some want to scream about it from the top of a tall building while others want to pretend the whole thing never happened.

It is therefore important to consider before agreeing to a FFR which type of litigant your client is, and what they will want the parties to do (scream or be quiet) once the matter is finally resolved. Again, the court’s will not fix this for you after the settlement is reached, and there is no presumption that matters will be kept confidential once resolved. If your client is a private person, or has personal or business reputational capital that could be put at stake, ensure you clearly communicate the need for a broad confidentiality clause prior to agreeing to a FFR.

3. Is there a Need for a Noncompetition or Non-solicitation Clause?

Employees and businesses sometimes come in to conflict, so when the resolution of these conflicts finally happens lawyers should be mindful of the business and competitive needs of their clients. There is no general presumption against competition and solicitation, so again, consider and speak to your client about including clauses in relation to these issues before you agree to a FFR.

Concluding Thoughts

It is sometimes so routine for lawyers to offer a Full and Final Release as part and parcel of attempting to resolve any legal matter for their clients that we often forget what is and isn’t, and what should and shouldn’t be, included in one. Simply stating your client will agree to provide a release to be drafted by counsel “acting reasonably” isn’t enough. And, like most things in the practice of law, the offering of FFRs will require a lawyer to spell it out, in detail, at the time of making the offer – not after.

So, speak to your client about what they need to get out of a full and final release and then specify those needs in your client’s offer to settle. Otherwise, your client may be stuck with something that doesn’t meet their needs and doesn’t provide the protection they require, and you will be the one in hot water!

T. David Marshall is a litigator with Marshall Law Group, a firm focused on complex litigation and tribunal matters. Contact David by email at david@marshalllawgroup.ca.

[1] While parties may use language that releases every claim that arises, both known and unknown, clear language will be required to demonstrate that a party intended to release all claims. In the present case…they precisely restricted the release to the subject matter of the prior proceedings… The instant case is exactly the type of case the Court had in mind when it stated “in the absence of clear language [the court] will be very slow to infer that a party intended to surrender rights and claims of which he was unaware and could not have been aware”. Biancaniello v. DMCT LLP, 2017 ONCA 386