Adversary to Ally? Disclosure Required When the Litigation Landscape Shifts

Practitioners must remain attentive to their disclosure obligations. Any settlement agreement (or partial settlement agreement) reached between some parties, but not others, that entirely changes the landscape of the litigation in a way that significantly alters the dynamics of the litigation must be disclosed to the non-settling parties.[1] The obligation to disclose is immediate and unequivocal.

The failure to comply with these disclosure obligations amounts to an abuse of process, with the most serious of consequences – a stay of proceedings or stay of the claim asserted by the defaulting, non-disclosing party. This is because without disclosure of such agreements, the court considers its processes to have been rendered a sham which amounts to a failure of justice.