Knowledge Centre

Sharing the Blame: Joint and Several Liability

August 2017 CBM Lawyers, Alberta

A person may be injured by the shared act of two or more joint tortfeasors or by the independent acts of several, concurrent tortfeasors. Defendants in a civil suit can be held jointly and severally liable if their combined actions brought about the harm to the plaintiff. When defendants are jointly and severally liable they are each liable to the plaintiff for the full amount of the damage suffered.

In this article, we examine:

  1. Joint Tortfeasors
  2. Several, Concurrent Tortfeasors
  3. Several Liability
  4. Joint Liability
  5. Claims for Contribution or Indemnity
  6. Settlement
  7. Conclusion

 Introduction

A person may be injured by the shared act of two or more joint tortfeasors or by the independent acts of several, concurrent tortfeasors. Defendants in a civil suit can be held jointly and severally liable if their combined actions brought about the harm to the plaintiff. When defendants are jointly and severally liable they are each liable to the plaintiff for the full amount of the damage suffered.

 Joint Tortfeasors

There are two circumstances which will give rise to a joint tortfeasor. The first is where one person is vicariously liable for the torts committed by another. This type of joint tortfeasor is frequently seen in situations with employers/employees or owners/drivers.

A joint tortfeasor will also come about when two or more people act together in furtherance of a common design or plan for a wrongful purpose and during the course of this, a tortious act occurs (Freyberg v Fletcher Challenge Oil & Gas Inc., 2007 ABQB 353 at para. 153).

An example of this is found in Martin v Martin (1996), 176 N.B.R. (2d) 178 (C.A.).  In this case, four defendant brothers went to the Plaintiff’s house to retaliate against the Plaintiff for knocking down their other brother. Three of the defendants left and were walking toward their vehicles. However, the fourth began repeatedly striking the Plaintiff. The trial judge found the fourth defendant had deliberately and intentionally committed battery on the Plaintiff and the other brothers were not liable for this act. The Plaintiff appealed, arguing the three other brothers had been acting in concert as joint tortfeasors. The Court of Appeal agreed with the Plaintiff. It held the brothers were at all times trespassers and aggressors. They acted in concert for a common end of retaliating against the Plaintiff as indicated by the chain of events leading up to the ultimate battery. As such, they were jointly and severally liable for the damages awarded to the Plaintiff.

Another example is found in Newcastle (Town) v Mattatall (1988), 87 N.B.R. (2d) 238 (C.A.). This case involved three youths who illegally entered a town rink with the intention of committing theft. While they were inside, one of them started a fire. Since the tort had been committed in direct furtherance of the common purpose of stealing from the rink, the three youths were found jointly and severally liable for the damages which resulted from the fire.

There is a distinction drawn by the courts between two or more persons engaging in a common action for a wrongful purpose and those who engage in a common action for lawful purpose. This was discussed in Keough v Royal Canadian Legion, Henderson Highway Branch 215 (1978), 91 D.L.R. (3d) 507 (Man. C.A.). In this case, a number of individuals were participating in a snowmobile race. The Plaintiff was injured when a snowmobile crashed through a rope barrier. The owner of the snowmobile claimed contribution from the driver and owner of another snowmobile stating their participation in the race was negligent. The court rejected this argument and concluded merely participating in a race, a lawful pursuit, did not implicate all drivers in the wrongful acts of some of the drivers or the race’s organizers. There would have been a different conclusion if the race itself was unlawful and dangerous.

Several, Concurrent Tortfeasors

When two or more people cause the same injury to another as a result of their separate tortious acts, this gives rise to several, concurrent tortfeasors. Even where successive injuries are caused, the parties remain several, concurrent tortfeasors as long as the negligence of each is both a factual and proximate cause of each injury.

One example of this would be a situation where a plaintiff is sitting at a light when two vehicles collide in the intersection and get propelled into the stopped Plaintiff. Several, concurrent tortfeasors will also arise in a chain collision situation, as described in the case of Rutter v Allen, 2012 BCSC 135. In Rutter, the Plaintiff stopped his vehicle behind a truck which had come to a sudden stop. The Plaintiff was then struck from behind by a vehicle driven by Defendant A which was struck by a vehicle driven by Defendant B. The exact sequence of the collisions was not able to be determined with certainty since they all occurred within a very short time frame. Despite this, it was concluded the impacts to the Plaintiff’s vehicle were caused by the negligence of both defendants and both of these impacts caused the Plaintiff’s injuries. As a result, the Defendants were several, concurrent tortfeasors and were jointly and severally liable for the damages caused by their negligence.

If a plaintiff suffers multiple accidents, the individual tortfeasors from each accident can also be several, concurrent tortfeasors. For example, in Hutchings v Dow, 2007 BCCA 148, the Plaintiff suffered injuries in a motor vehicle accident. Approximately 18 months later, he was further injured in an assault. It was determined the Plaintiff was suffering from serious and ongoing depression which was a result of both the motor vehicle accident and the assault. At para. 24, the court stated the defendants from the motor vehicle accident and the perpetrator of the assault were “several tortfeasors whose acts combined to produce the same damage, i.e. the depression”. It went on to explain the following:

Several concurrent tortfeasors are independent tortfeasors whose acts concur to produce a single damage. The damnum is single, but each commits a separate injuria. … [Example omitted.]

Several concurrent torts are of two kinds. There are those, as in the above examples, where each of the two causes is necessary in order to effect the consequence. And there are those where either cause would be sufficient of itself to produce the consequence, as where two persons independently shoot at another at the same time, both shots being fatal. No legal consequences follow from the distinction, which is made here merely in order to indicate the scope of the concept of several concurrent torts.

When two defendants are classified as several, concurrent tortfeasors rather than joint tortfeasors, the legal implications will be different. When dealing with joint tortfeasors, if it can be proven at least one of the two defendants has caused the damage and the acts of each are attributable to the other, they will each be liable for the full amount of the plaintiff’s damages. Several, concurrent tortfeasors will also each be liable to the plaintiff for the full amount of his or her damages, but it must first be established each defendant was negligent and each act of negligence was a factual and proximate cause of the damages. If a causal link is not established which may occur in a case where it is not clear which of the defendants has caused the damage, it may even lead to the claim against both defendants being dismissed.

Several Liability

Several liability is when a defendant is liable only for its respective share of the judgment. For example, if a court determines a plaintiff is 25% responsible; the first defendant is 10% responsible; the second defendant is 45% responsible; and the third defendant is 20% responsible; each defendant is only responsible to pay their respective percentage of the judgment even if one of the others cannot pay their share.

There is no several liability in Alberta except through a Pierringer Agreement. A Pierringer Agreement, also known as a “proportionate share settlement agreement” is named after the American case of Pierringer v Hoger, 124 N.W.2d 106 (Wis. S.C. 1963) the case in which this type of agreement was first considered. It is a contract between a plaintiff and one or more, but not all, of the defendants in an action. Once the agreement made, the settling defendants are able to withdraw from the litigation and the plaintiff will amend the Statement of Claim to limit the recovery sought against the non-settling defendants to several liability – their proportionate degree of fault. After a Pierringer Agreement is in place, “Third Party proceedings for contribution cannot survive against the non-settling defendants” (CCS Corp. v Secure Energy Services Inc., 2016 ABQB 94).

The general principles of this type of agreement were set out by the Supreme Court of Canada in Sable Offshore Energy Inc. v Ameron International Corp., 2013 SCC 37, starting at para. 6, where it stated:

… [A] Pierringer Agreement allows one or more defendants in a multi-party proceeding to settle with the plaintiff and withdraw from the litigation, leaving the remaining defendants responsible only for the loss they actually caused. There is no joint liability with the settling defendants, but non-settling defendants may be jointly liable with each other.

. . .

As for any concern that the non-settling defendants will be required to pay more than their share of damages, it is inherent in Pierringer Agreements that non-settling defendants can only be held liable for their share of the damages and are severally, and not jointly, liable with the settling defendants.

A Pierringer Agreement is not subject to the usual settlement privilege. The existence of the Agreement should be disclosed to the non-settling parties and its terms should also be disclosed to the court (Amoco Canada Petroleum Co. v Propak Systems Ltd., 2001 ABCA 110 at para. 41). However, unless there is a strong public interest to reveal the amount of the settlement in a Pierringer Agreement, this will be kept confidential until the end of the litigation. It will then be disclosed to ensure there is no double recovery on the part of the plaintiff.

The procedural impact of one or more defendants removing themselves from litigation is an issue which frequently arises when Pierringer Agreements are granted. One such issue is whether or not a non-settling defendant has any right of disclosure or discovery from a settling defendant.

Although judges are given wide discretion when dealing with a Pierringer Agreement to assure the trial process is fair (Canadian Natural Resources Ltd. v Wood Group Mustang (Canada) Inc., 2017 ABQB 106), the general approach is set out in Murphy Canada Exploration Co. v Novagas Canada Ltd., 2009 ABQB 455 starting at para. 60:

Where a party will suffer procedural prejudice through none of its own doing, the Courts should generally consider steps to remedy the prejudice. The objectives of the Rules of Court are to ensure that matters proceed to be determined on their merits, in a timely, efficient, cost-effective and fair manner. These objectives often conflict, and the Courts are often faced with balancing these objectives. Of those objectives, however, the most important is fairness.

In my view, there is a mid-ground with respect to Pierringer agreements. When faced with an application to approve and give effect to such an agreement, the Court must consider if there is substantial prejudice to the non-settling defendant, whether the prejudice can or should be mitigated, and whether the settlement agreement should be approved but on terms or conditions. Otherwise, the Court becomes merely the affixer of a rubber stamp.

Thus, on an application to approve and implement a Pierringer settlement agreement, the Court may:

1. Approve and implement the agreement on its terms;

2. Refuse to approve the agreement on its terms if there is significant prejudice to the non-settling parties that cannot be reasonably mitigated; or

3. Approve and implement the agreement, but on terms or conditions aimed at mitigating the prejudice to the non-settling parties.

Obviously, where the prejudice to the Non-Settling Parties is procedural, such as limitations on discovery rights, approval will be the general rule and refusal of approval or the imposition of terms and conditions will be the exception, as confirmed in Amoco Canada Petroleum Co. v Propak Systems Ltd.

Paragraph 41 of Amoco, emphasized there are strong public policy reasons to encourage settlement. The mere “fact that a non-settling defendant has restricted rights of third party disclosure… does not justify refusing to give effect to a proportionate share settlement agreement”.

Keeping the potential procedural impacts in mind, Pierringer Agreements can be a useful tool to settle issues of liability between some but not all of the parties to an action, simplifying and expediting the litigation process.

Joint Liability

Defendants who have joint liability are each liable up to the full amount of the judgment awarded to a plaintiff.  A successful plaintiff has the option of collecting the entire judgment from any one of the defendants or jointly from all defendants until the judgment is paid in full.

For example, if Defendant A is found to be 80% at fault and Defendant B is 20% liable, the Plaintiff would have the right to recover 100% of the damages from Defendant B. Defendant B could then attempt receive indemnification from Defendant A. However, depending on Defendant A’s insurance and financial situation, Defendant B may not be able to recoup all or even most of the disproportionate amount it paid out.

The structure of joint liability is beneficial to a plaintiff. If one defendant has insufficient funds to pay its share of a judgment, the plaintiff will not be penalized and will still be able to recover its loss in full. It also allows the plaintiff to avoid the difficulty and inconvenience of having to collect a judgment from multiple parties.

In Alberta, when a plaintiff is found to have been contributorily negligent for the tortious act, the damage award will be reduced by the proportionate amount of liability attributed to the Plaintiff. Once the damage award is reduced, liability is apportioned between the defendants as usual and the Plaintiff can collect the entirety of the outstanding amount from either or both defendants.

Although joint liability protects the interests of a plaintiff, it can result in one defendant paying damages disproportionate to their contributory negligence. This is often seen in cases where there are insured and uninsured defendants. If one defendant has “deeper pockets” or a larger insurance policy, the one may end up paying all or most of the damages even if the other defendant was primarily at fault.

A common example of this is a bar fight between patrons where the injured party will sue the individual involved in the fight and in addition, sue the bar for over-service and failing to provide proper supervision and safety. Due to the law in Alberta, even if the bar is found 1% liable for the incident, it may end up paying the entirety of the judgment because it has the deepest pockets.

Similarly, municipalities are often included as defendants in claims and when their co-defendants fail to have the means to pay high damage awards, the municipality pays damages disproportionate to their contributory negligence. This increased exposure often results in higher insurance premiums for municipalities and commercial establishments.

Some provinces in Canada, such as British Columbia and Saskatchewan, have implemented different approaches. In British Columbia, co-defendants will be jointly and severally liable unless the plaintiff also contributed to the loss or damages. If any portion of the blame rests with a plaintiff, then joint liability is severed and it becomes several liability as between all parties. This means the plaintiff can only pursue a defendant to the extent of its liability irrespective of whether one or more of the liable defendants cannot pay their proportionate share.

Saskatchewan has yet another method. It amended its Contributory Negligence Act, R.S.S. 1978, c. C-31, to add a reallocation provision. As a result of this provision, any uncollectible contributions of a defendant are reallocated to the remaining at-fault persons in an amount proportionate to their degree of fault. This provision is, found at s.3.1, states:

Apportionment of uncollectable contribution

3.1(1) In this section, “other persons found at fault” means:

(a) the person suffering the damage or loss if that person has been found to be at fault; and

(b) the other persons found to be at fault from whom the contribution can be collected.

(2) If the court is satisfied that the contribution of a person found at fault cannot be collected, the court shall, after determining the degree in which each person is at fault, make an order apportioning the contribution that cannot be collected among the other persons found at fault, proportionate to the degrees in which they have been respectively found to have been at fault.

Therefore, Plaintiffs in Saskatchewan who have been found contributorily liable for their own loss will be required to share in the effect of any shortfall caused by a defendant who cannot pay its share of the damages.

Claims for Contribution or Indemnity

As a result of Alberta’s joint and several liability legislation, a plaintiff has the ability to bring a claim against any joint tortfeasor to recover 100% of the damages. If this occurs, the tortfeasor held liable would not have any recourse against the wrongdoers who were not included in the action. To remedy this, when a defendant is sued, the defendant may be able to make a claim for contribution or indemnity through a third party claim. Claims for contribution will stand or fall based on the success of the plaintiff’s claim against the defendant (Canadian Natural Resources Ltd. v Arcelormittal Tubular Products Roman S.A., 2012 ABQB 679).

Examples of situations where third party claims for contribution can be sought include:

  • Claims under common law when a “duty or obligation owed by the third party to the defendant… relates to the same damages pled in the statement of claim” (Leoppky v McWilliams, 2001 ABCA 197, at para. 30).
  • Claims under the Tort-feasors Act when a third party’s breach of duty caused or could have caused, “the plaintiff to suffer the same damage that the plaintiff claims it suffered as a result of the defendant’s breach of duty to the plaintiff” (Canadian Natural Resources, at para. 252). In this type of situation, a defendant makes a claim the plaintiff could have asserted but did not.

Under the Alberta Rules of Court, third party claims may be filed in the following situations:

3.44  A defendant or third party defendant may file a third party claim against another person who

(a)   is or might be liable to the party filing the third party claim for all or part of the claim against that party,

(b)   is or might be liable to the party filing the third party claim for an independent claim arising out of

(i) a transaction or occurrence or series of transactions or occurrences involved in the action between the plaintiff and the defendant, or

(ii)   a related transaction or occurrence or series of related transactions or occurrences,

                                  or

(c)  should be bound by a decision about an issue between the plaintiff and the defendant.

Rule 3.44(a) allows claims for contribution or indemnity. For example, a claim may have been brought against a defendant as a result of a motor vehicle accident. The defendant may then pursue a third party claim against a chiropractor who negligently treated the plaintiff and may have exacerbated the original injury.

Third party claims under rule 3.44(b) and (c) are filed for the purpose of consolidating related actions. They are not to enforce a claim for contribution and do not depend on the success of the plaintiff’s claim as against the defendant.

Another resource for defendants is a Notice of Claim against Co-Defendants. This is used when one defendant wishes to seek contribution or indemnity from another defendant in the same action. This allows a defendant to recover amounts reflecting their portion of liability from the other defendants. Filing a claim against a co-defendant does not add any parties to the litigation. This process is set out in the Alberta Rules of Court as follows:

3.43(1) If a defendant claims a contribution or indemnity, or both, against a co-defendant under the Tort-feasors Act or the Contributory Negligence Act,

(a) the defendant may file and serve on a co-defendant a notice in Form 15 claiming a remedy under either or both of those Acts,

(b)neither the defendant nor the co-defendant need file a pleading in respect of a claim or defence under those Acts unless the Court otherwise orders, and

(c) a third party claim need not be filed and served on the co‑defendant.

(2)  The notice claiming contribution must be filed and served on the co-defendant within 20 days after the date on which the defendant files the statement of defence or demand for notice.

(3)  A claim under subrule (1) must be determined at the trial of the plaintiff’s claim against the defendant, or if there is no trial, as directed by the Court.

The limitation period for a claim for contribution or indemnity was previously was dictated by common law only and was very unclear. This uncertainty was resolved by a recent amendment to the Limitations Act, R.S.A. 2000, c. L-12, which now sets out a specific limitation period for claims for contribution as follows:

3(1.1)   If a claimant who is liable as a tort‑feasor in respect of injury does not seek a remedial order to recover contribution under section 3(1)(c) of the Tort‑feasors Act against a defendant, whether as a joint tort-feasor or otherwise, within

(a)    2 years after

(i) the later of

(A)   the date on which the claimant was served with a pleading by which a claim for the injury is brought against the claimant, and

(B)   the date on which the claimant first knew, or in the circumstances ought to have known, that the defendant was liable in respect of the injury or would have been liable in respect of the injury if the defendant had been sued within the limitation period provided by subsection (1) by the person who suffered the injury, if the claimant has been served with a pleading described in paragraph (A), or

(ii) the date on which the claimant first had or in the circumstances ought to have had the knowledge described in subclause (i)(B), if the claimant has not been served with a pleading described in subclause (i)(A),

or

(b)   10 years after the claim for contribution arose,

whichever period expires first, the defendant, on pleading this Act as a defence, is entitled to immunity from liability in respect of the claim for contribution.

(1.2)        For greater certainty, no claim for contribution against a defendant in respect of damage referred to in section 3(1)(c) of the Tort‑feasors Act is barred by the expiry of a limitation period within which the person who suffered that damage could seek a remedial order.

 Based on this section of the Limitations Act, the expiry of the limitation period as between the plaintiff and the third party will not prevent a defendant from claiming contribution from another tortfeasor. The defendant will have two years from either the date they were served with the claim or from the date of discoverability – whichever comes later – to seek contribution and indemnity from another tortfeasor. The date of discoverability is when the defendant, not the plaintiff, ought to have known the third party had a duty to contribute.

Settlement

Joint and several liability can have an unexpected outcome where one defendant settles early. With joint tortfeasors, there is only one cause of action. If a Release and Discontinuance is signed, this has the potential to extinguish the claim against all joint tortfeasors. Therefore, when dealing with a release where joint tortfeasors are involved, care should be taken to include an express reservation of rights to sue all other tortfeasors. Even where this is done and one defendant has settles with and is released by the plaintiff, this does not necessarily prevent another party from seeking contribution from that defendant.

An example of this is found in Tucker v Asleson (1991), 86 D.L.R. (4th) 73 (B.C. S.C.). In this case, the Plaintiff sued three defendants. The Plaintiff settled with one of them in exchange for a Release and Discontinuance and continued to trial against the other two defendants. The Court held each defendant was equally responsible for the Plaintiff’s injuries. The issue then was whether the remaining two defendants would be responsible for more than their respective third of the damages or whether they could pursue the settling defendant for the difference between the settlement amount and what the court apportioned to them. It was determined the settlement did not sever the joint and several liability of the remaining defendants. They continued to have the right to seek contribution from the settling party up to the one-third they were apportioned.

Another interesting judgment is Hannigan v Edmonton (1983), 27 Alta. L.R. (2d) 381 (Q.B). This action arose after the Plaintiff’s vehicle collided with a third party while he was trying to avoid an accident with a bus owned by the Defendant. The Plaintiff believed he was partly at fault and settled with the third party paying for the damage to the third party’s vehicle. He then commenced an action to seek contribution from the Defendant. The Defendant, rather than denying its liability to the third party accepted 100% responsibility. The Defendant submitted this assumption of full responsibility defeated the Plaintiff’s claim for contribution. The Court rejected this argument. It stated the Plaintiff’s voluntary settlement of the third party’s damage claim did not bar his action. Allowing a defendant to admit 100% liability, but at the same time deny a claim for contribution or indemnity would be contrary to the spirit of the legislation; would be a disincentive to early settlements; and would be inequitable. Parties involved in an accident who reasonably believe they would be found liable if sued should have a right to settle with the victim and subsequently obtain contribution from other wrongdoers.

To avoid the outcomes in Tucker and Hannigan, a Pierringer Agreement should be utilized when a defendant chooses to settle with a plaintiff. This severs the joint liability as between the defendants and will prevent the other parties from pursuing the settling defendant as they were able to before.

Conclusion

Joint and several liability is a system which serves to protect plaintiffs in the event one or more wrongdoers are unable to pay damages owed to the plaintiff. This, however, can lead to disproportionate and unexpected outcomes for tortfeasors. Some provinces in Canada have attempted to remedy this by altering their legislation to include aspects of several liability or to include reallocation provisions. Tortfeasors in Alberta must rely on claims for contribution or indemnity through third party claim;, claims against co-defendants; and settlement through Pierringer Agreements to limit their exposure to disproportionate damages.

 

Comments are closed.