Declaratory judgment

A declaratory judgment is an authoritative and binding decision made by a court that sets out the rights and other relevant legal relations of the parties to a justiciable dispute, without providing for relief or ordering enforcement of those rights. A declaratory judgment aims to resolve legal uncertainties for the litigants before a final judgment or action on their matter is made, and as such are a form of preventative justice. While declaratory judgments border on prohibited advisory opinions (In re Judiciary Act), they are allowed so that they may be used to prevent cases from escalating to trial, and prevent abuses of contractual or legal rights. Examples of situations where declaratory judgments may be sought include:

  • A party to a contract may seek interpretation of the contract to determine the parties’ rights
  • A corporation may ask a court to decide whether a new tax is applicable to them before they pay it
  • An insurance company may seek a determination as to whether a policy covers a particular customer’s claim