A recent Ontario decision offers a cautionary lesson for dentists dealing with insurers: not every “accepted” settlement is binding. When the scope of a release is unclear—or worse, broader than what was agreed—courts may refuse to enforce it.
The Battle With Insurance
The case of Obeid v. Sun Life Assurance Company of Canada involved a dentist whose practice had been delisted by an insurer following allegations of billing irregularities. The dentist commenced a lawsuit challenging that decision. While the litigation moved slowly, the landscape shifted: the federal government introduced the Canadian Dental Care Program (CDCP), and the same insurer was tasked with administering it. The dentist was then excluded from participating in the CDCP, creating a new and separate dispute.
Here Comes The Offer To Settle
In an effort to resolve the original lawsuit, the insurer made a time-limited offer to settle. The terms were straightforward: the dentist would execute a full and final release and consent to dismissing the action, each party bearing its own costs. The dentist accepted the offer by email within the deadline. On its face, this looked like a deal.
The problem arose when the insurer delivered its “standard form” release. The language was broad—broad enough that it could be used to bar not only the existing lawsuit, but also any future claims, including the dentist’s challenge to the CDCP exclusion. The dentist’s counsel raised concerns immediately and refused to sign the release as drafted. In parallel, the dentist commenced a judicial review proceeding relating to the CDCP decision.
Sunlife brought a motion asking the court to enforce the settlement and compel execution of the release. The argument was familiar: there had been a valid offer and an unequivocal acceptance; therefore, a binding settlement existed, and the remaining step—signing the release—was a formality.
Was There A Settlement? No.
The court disagreed with Sunlife.
Applying the objective test for contract formation, the court asked what a reasonable businessperson would conclude the parties had agreed to. The offer referred specifically to settling “the Action.” At the time of the offer, the CDCP dispute was not part of that action. The release, however, was drafted broadly enough to capture that new dispute. In the court’s view, this mismatch mattered. A settlement requires agreement on all essential terms, and the scope of the release is one of those essential terms. Because the parties had not agreed on that scope, there was no true “meeting of the minds.”
Even if a settlement could be said to exist, the court went further and held that it would not enforce it in the circumstances. This was one of those rare cases where enforcing the deal would not be in the interests of justice. The dentist had clearly been willing to settle the existing lawsuit, but not to give up the right to challenge a separate, later decision affecting participation in a national program. The insurer’s motion was dismissed, and costs were awarded to the dentist (17.5k!)
Conclusion
For dental professionals, the takeaway is practical and immediate. Settlement language matters—especially the release. If you are resolving a dispute with an insurer, be clear about what you are settling and what you are not. If the intention is to achieve a global peace, that must be stated expressly in the offer. Conversely, if you intend to preserve rights relating to other issues—such as participation in government programs, audit findings, or future billing disputes—those carve-outs should be explicit.
For insurers and other counterparties, the lesson is equally clear. You cannot rely on a generic “full and final release” to expand the deal after acceptance. If you want a release that covers more than the specific lawsuit, the offer itself must say so in plain terms.
In short, a settlement is only as strong as its clarity. For dentists navigating complex relationships with insurers—often across multiple programs and regulatory frameworks—precision at the settlement stage can be the difference between finality and further litigation.
