Costs Considerations of Informal Settlement Offers - "Without Prejudice" privilege expires once dispute is resolved

The ABQB concludes in Chisholm v Lindsay  that informal offers to settle, in whatever form, may be considered when assessing costs. The offers need not conform to the Rules of Court or state that the offeror intends to refer to the offer when arguing costs (commonly called a Calderbank Offer).

The court considered only the last two of several offers. The parties appear not to have argued for consideration of an offer made about 3 months earlier during a mediation.

Justice Kenny stated that without prejudice privilege ends upon judgment or settlement of the claim, so perhaps parties are well-advised to specifically state that offers made during a mediation will never be referred to in court. My standard form mediation agreement says the mediation will be strictly confidential. Mediation  communications “shall not be admissible in any court proceeding.” 

Complete preservation of confidentiality permits the parties to freely explore all potential avenues of resolution without fear of unintended costs consequences.

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