The Ontario Court of Appeal recently grappled with the enforceability of Pierringer agreements in Cadieux v. Cadieux, 2025 ONCA 405.
The appeal concerned an action in the Ontario Superior Court of Justice on behalf of two children who were injured in a motor vehicle collision. The claim was brought against the parties involved in the collision and the City of Ottawa.
During the litigation, the Plaintiffs and the City of Ottawa entered a Pierringer agreement. The agreement provided that the Plaintiffs would amend their claims such that the non-settling defendants would remain jointly and severally liable to the degree of their collective fault. The trial judge was given full authority to apportion liability among all of the defendants.
The clause at issue provided as follows:
[T]he claims advanced by the Plaintiffs against the Remaining Defendants will only be in respect of any collective joint and several liability of the Remaining Defendants and the Plaintiffs shall only seek recovery of damages as against the Remaining Defendants to the extent of the Remaining Defendants' degree of fault for any damages that may be adjudged to have been sustained by the Plaintiffs.
The motion judge approved the Pierringer agreement, but the non-settling defendants appealed the motion decision, alleging that it could result in them paying a disproportionate share of damages.
The Court stated that a Pierringer agreement should be upheld unless it prejudices a non-settling defendant, and that this prejudice outweighs the public interest in upholding the agreement. The Court described this principle as follows at paragraph 17:
The prejudice must be more than the disadvantages to a non-settling defendant that are inherent in the basic form of a Pierringer agreement, such as their defence no longer being assisted by the settling defendant or the settling defendant no longer sharing in any joint and several liability.
The Court reviewed the agreement in the context of section 1 of the Negligence Act, R.S.O. 1990, c. N. 1, as amended, which provides that a successful plaintiff is entitled to receive their full damages from any of the tortfeasors, and that severally liable co-tortfeasors can in turn seek contributions from each other based on their respective degrees of fault.
The Court stated that the alleged prejudice needs to be assessed in the context of section 1 of the Negligence Act, the policy objective of which is to ensure successful plaintiffs receive full compensation, and observed there to be a strong public interest in upholding Pierringer agreements. In so doing, the Court referenced the Supreme Court of Canada decision in Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 36, noting that Pierringer agreements contribute to "reducing litigation's stubbornly endemic delays, expenses and stress."
The non-settling defendants argued that they would suffer prejudice as a result of the Pierringer agreement because it resulted in them being incapable of sharing the risk of co-defendant insolvency with the City of Ottawa.
The Court concluded that this concern was insufficient grounds for not upholding the Pierringer agreement in light of the policy importance of upholding settlement agreements. The Court stated as follows at paragraph 31:
When there is an insolvent or impecunious co-defendant, there is always a risk of having to pay more than one's proportionate share. This was a risk to Ottawa, as well as the appellants, from the start of the litigation. And if the objective is indeed to encourage settlements, as the Supreme Court puts it in Sable, at para. 29, "someone has to go first", and in this case Ottawa did. The ability to avoid joint liability with an insolvent or impecunious co-defendant is an incentive to settle and should not give rise to prejudice.
Accordingly, the Pierringer agreement at issue was upheld and the Court dismissed the appeal.
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