diff --git a/crates/driver/src/domain/competition/mod.rs b/crates/driver/src/domain/competition/mod.rs
index 869d51d683..6355119ccb 100644
--- a/crates/driver/src/domain/competition/mod.rs
+++ b/crates/driver/src/domain/competition/mod.rs
@@ -239,6 +239,7 @@ impl Competition {
                     .user_trades()
                     .map(|trade| trade.order().uid)
                     .collect();
+                let has_haircut = solution.has_haircut();
                 observe::encoding(&id);
                 let settlement = solution
                     .encode(
@@ -248,10 +249,10 @@ impl Competition {
                         self.solver.solver_native_token(),
                     )
                     .await;
-                (id, orders, settlement)
+                (id, orders, has_haircut, settlement)
             })
             .collect::<FuturesUnordered<_>>()
-            .filter_map(|(id, orders, result)| async move {
+            .filter_map(|(id, orders, has_haircut, result)| async move {
                 match result {
                     Ok(solution) => {
                         self.risk_detector.encoding_succeeded(&orders);
@@ -261,8 +262,11 @@ impl Competition {
                     Err(_err) if id.solutions().len() > 1 => None,
                     Err(err) => {
                         self.risk_detector.encoding_failed(&orders);
-                        observe::encoding_failed(self.solver.name(), &id, &err);
-                        notify::encoding_failed(&self.solver, auction.id(), &id, &err);
+                        observe::encoding_failed(self.solver.name(), &id, &err, has_haircut);
+                        // don't notify on errors for solutions with haircut
+                        if !has_haircut {
+                            notify::encoding_failed(&self.solver, auction.id(), &id, &err);
+                        }
                         None
                     }
                 }
@@ -362,6 +366,7 @@ impl Competition {
         // gets picked by the procotol.
         if let Ok(remaining) = deadline.remaining() {
             let score_ref = &mut score;
+            let has_haircut = settlement.has_haircut();
             let simulate_on_new_blocks = async move {
                 let mut stream =
                     ethrpc::block_stream::into_stream(self.eth.current_block().clone());
@@ -369,19 +374,22 @@ impl Competition {
                     if let Err(infra::simulator::Error::Revert(err)) =
                         self.simulate_settlement(&settlement).await
                     {
-                        observe::winner_voided(block, &err);
+                        observe::winner_voided(self.solver.name(), block, &err, has_haircut);
                         *score_ref = None;
                         self.settlements
                             .lock()
                             .unwrap()
                             .retain(|s| s.solution().get() != solution_id);
-                        notify::simulation_failed(
-                            &self.solver,
-                            auction.id(),
-                            settlement.solution(),
-                            &infra::simulator::Error::Revert(err),
-                            true,
-                        );
+                        // Only notify solver if solution doesn't have haircut
+                        if !has_haircut {
+                            notify::simulation_failed(
+                                &self.solver,
+                                auction.id(),
+                                settlement.solution(),
+                                &infra::simulator::Error::Revert(err),
+                                true,
+                            );
+                        }
                         return;
                     }
                 }
diff --git a/crates/driver/src/domain/competition/solution/mod.rs b/crates/driver/src/domain/competition/solution/mod.rs
index 46404cc955..0fedc4b27b 100644
--- a/crates/driver/src/domain/competition/solution/mod.rs
+++ b/crates/driver/src/domain/competition/solution/mod.rs
@@ -517,6 +517,16 @@ impl Solution {
                 )
             })
     }
+
+    /// Returns true if any trade in this solution has a non-zero haircut fee.
+    /// Used to determine if simulation failures should suppress solver
+    /// notifications.
+    pub fn has_haircut(&self) -> bool {
+        self.trades.iter().any(|trade| match trade {
+            Trade::Fulfillment(fulfillment) => !fulfillment.haircut_fee().is_zero(),
+            Trade::Jit(_) => false, // JIT orders don't have haircut
+        })
+    }
 }
 
 /// Given two solutions returns the factors with
diff --git a/crates/driver/src/domain/competition/solution/settlement.rs b/crates/driver/src/domain/competition/solution/settlement.rs
index 63bf90be3c..c7ad4a33d7 100644
--- a/crates/driver/src/domain/competition/solution/settlement.rs
+++ b/crates/driver/src/domain/competition/solution/settlement.rs
@@ -339,6 +339,11 @@ impl Settlement {
             .map(|(token, amount)| (token, amount.into()))
             .collect()
     }
+
+    /// Returns true if this settlement's solution has any trades with haircut.
+    pub fn has_haircut(&self) -> bool {
+        self.solution.has_haircut()
+    }
 }
 
 /// Should the interactions be internalized?
diff --git a/crates/driver/src/infra/observe/mod.rs b/crates/driver/src/infra/observe/mod.rs
index 07e1b06a12..8ee025539e 100644
--- a/crates/driver/src/infra/observe/mod.rs
+++ b/crates/driver/src/infra/observe/mod.rs
@@ -122,11 +122,26 @@ pub fn encoding(id: &solution::Id) {
 }
 
 /// Observe that settlement encoding failed.
-pub fn encoding_failed(solver: &solver::Name, id: &solution::Id, err: &solution::Error) {
-    tracing::info!(?id, ?err, "discarded solution: settlement encoding");
+pub fn encoding_failed(
+    solver: &solver::Name,
+    id: &solution::Id,
+    err: &solution::Error,
+    has_haircut: bool,
+) {
+    tracing::info!(
+        ?id,
+        ?err,
+        has_haircut,
+        "discarded solution: settlement encoding"
+    );
+    let reason = if has_haircut {
+        "SettlementEncodingHaircut"
+    } else {
+        "SettlementEncoding"
+    };
     metrics::get()
         .dropped_solutions
-        .with_label_values(&[solver.as_str(), "SettlementEncoding"])
+        .with_label_values(&[solver.as_str(), reason])
         .inc();
 }
 
@@ -164,8 +179,27 @@ pub fn score(settlement: &Settlement, score: &eth::Ether) {
 
 // Observe that the winning settlement started failing upon arrival of a new
 // block
-pub fn winner_voided(block: BlockInfo, err: &simulator::RevertError) {
-    tracing::warn!(block = block.number, ?err, "solution reverts on new block");
+pub fn winner_voided(
+    solver: &solver::Name,
+    block: BlockInfo,
+    err: &simulator::RevertError,
+    has_haircut: bool,
+) {
+    tracing::warn!(
+        block = block.number,
+        ?err,
+        has_haircut,
+        "solution reverts on new block"
+    );
+    let reason = if has_haircut {
+        "SimulationRevertHaircut"
+    } else {
+        "SimulationRevert"
+    };
+    metrics::get()
+        .dropped_solutions
+        .with_label_values(&[solver.as_str(), reason])
+        .inc();
 }
 
 pub fn revealing() {