The Plaintiff, Sable, sued a number of Defendants with respect
to its purchase of paint that was allegedly capable of preventing
corrosion on Sable's offshore structures and onshore
facilities. Among the Defendants were not only suppliers of the
paint, but also contractors and applicators who prepared surfaces
and applied the paint. The paint allegedly failed to prevent
corrosion as promised.
Sable later entered into "Pierringer Agreements",
perhaps better known as "Proportionate Share Settlement
Agreements", with a number of Defendants prior to trial.
Proportionate Share Settlement Agreements are a useful tool in
allowing for pre-trial settlements to occur. Typically, the
Plaintiff settles with one or more Defendants ("Settling
Defendants") in exchange for being released from the
The Non-Settling Defendants, by the very nature of the
Agreement, are pursued by the Plaintiff only for the Non-Settling
Defendants' proportionate share of liability (several liability
as opposed to joint and several liability). The Settling Defendants
are insulated from being brought back into the lawsuit by the
Non-Settling Defendants. The Non-Settling Defendants in the
Sable case sought disclosure of the amount of the
settlements that Sable entered into with the Settling Defendants.
Sable refused to provide those settlement figures on the grounds
that such amounts were privileged and that the Non-Settling
Defendants would not be prejudiced by not having access to those
The Supreme Court of Canada agreed with Sable and endorsed the
fact that Courts encourage settlement and settlement privilege
protects the efforts of parties attempting to settle their disputes
by ensuring that communications made in the course of settlement
negotiations are not discoverable. The protection is afforded to
settlement negotiations, whether or not a settlement is reached,
and that means that successful negotiations are entitled to no less
protection than negotiations that yield no settlement.
Based on the fact that the Non-Settling Defendants would only be
liable for their several share of liability, and that once
liability had been determined at the end of the trial, Sable would
disclose to the trial judge the amounts it settled for with the
Settling Defendants, Justice Abella, speaking for the Court, found
It is therefore not clear to me how knowledge of the settlement
amounts materially affects the ability of the Non-Settling
Defendants to know and present their case. The Defendants remain
fully aware of the claims they must defend themselves against and
of the overall amount that Sable is seeking. It is true that
knowing the settlement amounts might allow the Defendants to revise
their estimate of how much they want to invest in the case but
this, it seems to me, does not rise to a sufficient level of
importance to displace the public interest in promoting
Later in her decision, Justice Abella indicated that:
A proper analysis of a claim for an exception to settlement
privilege does not simply ask whether the Non-Settling Defendants
derive some tactical advantage from disclosure, but whether the
reason for disclosure outweighs the policy in favour of promoting
settlement. While protecting disclosure of the settlement
negotiations and their fruits has the demonstrable benefit of
promoting settlement, there is little corresponding harm in denying
disclosure of the settlement amounts in this case.
Prior to the decision in Sable, some judges, including judges of
the Court of Queen's Bench of Alberta, were inclined to require
disclosure of settlement amounts to Non-Settling Defendants. That
practice will likely now cease based upon the Supreme Court of
Canada decision although counsel will want to be certain, as was
the case in Sable, to offer to disclose the settlement
amounts to the trial judge at the conclusion of trial.
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