New Brunswick Small Claims Settlement

You filed your claim, the defendant showed up, and somewhere between the filing fee and the hearing date both sides realize that settling is cheaper than fighting it out. In New Brunswick Small Claims Court, settlement is not just encouraged — the Adjudicator is required to ask about it before the hearing even begins.

The Mandatory Settlement Check

Under Section 31 of the General Regulation (NB Reg. 2012-103), the Adjudicator must ask both parties before starting the hearing whether they have discussed settlement. If they have not, the Adjudicator must give them an immediate opportunity to do so. This is not a formality — many claims resolve right there, in the hallway outside the hearing room.

Settlement can happen at any point: before filing, after filing but before the hearing, at the courthouse on hearing day, or even partway through the hearing itself.

Formalizing a Settlement (Form 13)

When both sides reach an agreement, they execute a Settlement Agreement (Form 13). This form records the terms: who pays whom, how much, by when, and whether it is a lump sum or installments. Both parties sign it, and the clerk files it with the court.

Form 13 provides a route to judgment if a party defaults. If the other side agrees to pay $6,000 in three monthly installments and then stops paying after the first one, you may apply to the court for an order directing judgment in accordance with the settlement terms. The Adjudicator may direct judgment, and the clerk then enters a Formal Judgment (Form 14).

This is one of the biggest advantages of settling within the court process rather than outside it. A private handshake agreement has no enforcement mechanism beyond filing a new claim. A filed Form 13 lets the non-defaulting party apply for judgment under Section 33 if the agreement is breached.

Payment Agreements (Form 10)

Form 10 is used when the defendant admits they owe the money but cannot pay the full amount at once. A Payment Agreement sets out an installment schedule — for example, $500 per month until the debt is satisfied.

Like Form 13, a filed Form 10 is enforceable. If the defendant misses a payment, the claimant can request judgment for the outstanding balance without a new hearing.

When Settlement Makes Sense

Not every claim should go to a hearing. Settlement is worth serious consideration when:

• The defendant has limited assets — winning a judgment against someone who cannot pay is a hollow victory. A smaller amount paid now may be worth more than a full judgment that requires years of enforcement effort.
• Evidence is uncertain — if your case depends on a witness who might not show up or documents that are ambiguous, a negotiated amount eliminates the risk of walking away with nothing.
• The relationship matters — a contractor you might hire again, a neighbour you see every day, a business partner in another venture. A hearing creates a winner and a loser; a settlement lets both sides move on.
• Speed — hearings can take months to schedule. A settlement today puts money in your hands sooner.

What Settlement Cannot Do

A few things to keep in mind:

• Mediation records are confidential — under Section 30(3) of the General Regulation, documents and notes relating to mediation are confidential and do not form part of the court record.
• Private mediation costs are your own — if you use a private mediator, both parties split the cost as agreed between them. The court does not provide or pay for mediation services.
• Settling does not extend deadlines — settlement talks do not extend the 30-day response deadline or the one-year service window. Filing Form 1 stops the limitation clock for the commenced claim; settlement talks alone do not stop the clock for separate claims that have not been filed.

Withdrawing a Claim After Settlement

If you settle and do not want to keep the case on the court's books, you can file a Notice of Withdrawal (Form 5A) as the claimant, or Form 5B if the defendant is withdrawing a counterclaim. If a response has been filed, withdrawing the claim requires the court's leave or written consent of all parties, attached to the notice.

Be careful about withdrawing before the settlement money is fully paid. If you withdraw the claim and the other side stops paying, you may need to file a brand new action — which means a new filing fee and the limitation period must still be open. Filing a Form 13 settlement and leaving the case on the court registry until full payment is the safer route.

Your Next Step

Whether you settle early or go all the way to a hearing, knowing the process protects you. The New Brunswick small claims filing guide covers settlement mechanics, Form 13 and Form 10 procedures, and what to do when the other side breaks a payment agreement.

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