Client Resources / After the Settlement
Agreeing the number is not the last step. Minutes of settlement, a release you cannot undo, the end of the action, and then the wait for the money to actually arrive.
Reviewed August 2026The moment the number is agreed feels like the end. It is not quite. Documents have to be signed, the action has to be brought to an end, and the money has to move. That usually takes weeks rather than days, and longer where the injured person is a child or an incapable adult.
Knowing the sequence in advance stops the wait feeling like something has gone wrong.
If you settle at mediation or a pre-trial, minutes of settlement are normally signed before anyone leaves the room. That document records the agreement and it is binding. You cannot sleep on it and change your mind.
Which is the reason, said on several pages of this section and worth repeating here, not to sign anything before you have seen what the figure looks like net of everything that comes off it.
A release is the document the paying side requires in exchange for the money, and it is the one clients should read most carefully. In broad terms you are giving up the right to make any further claim arising out of the same events, including claims you do not yet know about.
A release is final. If your condition worsens next year, you cannot go back.
Releases commonly also contain a clause confirming that no party admits liability, a confidentiality clause restricting what you can say about the settlement and its amount, and an indemnity under which you agree to satisfy any subrogated or statutory claims out of the settlement. That last one is why repayment obligations must be identified before you sign, not afterwards.
Ask your lawyer to walk you through the release clause by clause. It is a short document that does a great deal.
Where an action has been started, it has to be formally disposed of, usually by a consent dismissal or a discontinuance. This is administrative and your lawyer handles it, but it is a step, and it takes time.
Where the injured person is a minor or an incapable adult, none of this happens until a judge approves the settlement. See court approval of a settlement for a child or incapable adult, and build the extra weeks into your expectations.
Once the release and dismissal documents are signed and delivered, the paying insurer issues the funds. A period of roughly thirty to sixty days from signed documents is common, though it varies by insurer and by the complexity of the file.
The money is paid into our trust account rather than directly to you. We then prepare a final account statement setting out the gross amount, our fee and HST, the disbursements advanced, any repayment obligations, and the balance payable to you. That balance is released once the accounting is complete.
Rather than taking everything as a lump sum, part of a settlement can be used to purchase an annuity that pays guaranteed amounts over time. This is worth serious consideration in catastrophic injury cases, where the money has to last a lifetime and where managing a large sum is itself a burden.
Where a structure is used, our fees are generally paid before the funds are placed, so the arrangement needs to be discussed early rather than at the point of signing. We usually involve a structured settlement specialist so that the options can be modelled properly.
Damages for personal injury or death are generally not taxable in Canada. That holds even for the portion of an award that compensates lost income, because the Canada Revenue Agency treats the payment as compensation for a loss rather than as earnings.
Canada Revenue Agency, IT-365R2, Damages, Settlements and Similar Receipts (archived).Two qualifications matter. Once you have the money, income you earn by investing it is generally taxable in the ordinary way, though the Income Tax Act exempts investment income on certain personal injury awards where the injured person is under 21. And a properly structured settlement is designed so that the periodic payments reach you tax free.
This is a summary, not tax advice. Where the sum is significant, take advice from an accountant before deciding how to hold it.
Settling the lawsuit does not automatically resolve everything connected to the incident. In a motor vehicle case, an accident benefits claim against your own insurer is a separate matter and may continue or be settled separately. Where a family member has advanced their own claim, that has to be dealt with too.
Be clear with your lawyer about exactly what the release covers, so that you know what is finished and what is not.
No, other than in exceptional circumstances. Minutes of settlement are a binding agreement. This is why the net figure and the terms should be understood before signing rather than after.
A release is final and covers future consequences of the same events. That is precisely why the timing of a settlement matters and why your lawyer will want the medical picture to be as clear as it can reasonably be before you resolve.
It depends on the release. Many contain a confidentiality clause. Ask before you sign if being able to speak about the outcome matters to you.
Tell your lawyer. Delays are usually administrative, but a settlement is an enforceable agreement and there are steps available if payment is not forthcoming.
Generally not on the damages themselves. Income you later earn on the money is a different question, and worth discussing with an accountant if the amount is substantial.
Davidson Cahill Morrison LLP
A release is short, final, and does more than most people realise. If you are being asked to sign one and you are not certain what it covers, that is the moment to ask.
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