Pierringer-type Agreements

Pierringer-type agreements are exotic sounding. But are they really useful or worthwhile using in everyday insurance-type cases?

It seems to me that in the proper circumstances they can, in fact, be quite useful. And they are not really as complicated or exotic as they might at first seem.

They are useful where one defendant is willing to settle with the plaintiff while the other defendant is not.

The agreement simply permits the plaintiff to settle with the "settling defendant" but proceed with the action against the "non-settling defendant".

Such an agreement was approved by the Ontario Court of Appeal in JM and WB, 2004 O.J. No 2312, 71 O.R. (3d) 171 (C.A.).

The agreement should provide:

1. That the settlement and payment contemplated are not to be taken as an admission of liability on the part of the settling defendant;

2. That the action will be dismissed as against the settling defendant, on consent and without costs;

3. That the plaintiffs will use their best efforts to cause any crossclaims against the settling defendant to be similarly dismissed, without costs, in order to fully and finally conclude all litigation arising from the matters pleaded in the action against the settling defendant;

4. A full and final release by the plaintiffs in favour of the settling defendant;

5. That the plaintiffs will indemnify and hold harmless the settling defendant from any crossclaim or third party claim, and any other proceeding or claim arising from the issues and allegations in the within action; and

6. For the disclosure of the agreement, including the settlement amount provided thereunder, to the trial court, on certain conditions.

The indemnity provision should state that the plaintiffs restrict their claim to whatever the non‑settling defendants may be directly liability for and, as such, non-settling defendants cannot be jointly liable with the settling defendant.

This means that non-settling defendants have no basis to seek contribution, indemnity, relief over by way of equitable subrogation, declaratory relief or otherwise against the settling defendant.

An order should then be obtained dismissing the plaintiffs’ claim against the settling defendant, after which the plaintiffs amend their statement of claim, on consent, to reflect its compromises in its claim detailed in the Pierringer agreement, stating as follows:

The plaintiff has agreed with the settling defendant that it shall limit its claims against the non-settling defendants to claims for damages, costs and interest attributable only to the non-settling defendants share of liability to the plaintiff (and joint liability to one another, if any, and if there is more than one non-settling defendant) such that the plaintiff’s recovery shall be limited to recovering the damages, costs and interest attributable to the non-settling defendants’ several share of liability (or joint share of liability if more than one non-settling defendant) as proven against it or them at trial.

For greater certainty, the plaintiff shall have no claim directly or indirectly against the settling defendant and the plaintiff shall limit its claim against the non-settling defendant so as to exclude any crossclaim or third party claim made against or which could be made against the settling defendant arising from the issues in this action.

The plaintiff admits that the Court at any trial of this matter has and shall have full authority to adjudicate upon the apportionment of liability, if any, between all defendants named in the Statement of Claim, including the settling defendants, whether or not the settling defendants remain as parties by crossclaim or third party claim in this action.

The terms of the agreement listed above, plus amendments to the Statement of Claim, were approved by the Court of Appeal for Ontario in the above-noted decision.

Limitation Periods

Grewal v. Ivany, 2008 ONCA 687.

This is an interesting decision of the Court of Appeal of Ontario from last year. It addresses the issue of discoverability and when a limitation period starts running.

In Ontario, claimants normally have two years to commence an action. This however is subject to discoverability.

The injured parties were involved in a motor vehicle accident and waited three and a half years to commence an action. The motion judge dismissed the plaintiff's action as out of time.

The Court of Appeal held that the plaintiff's lack of prognosis, along with a medical notation in the family doctor's notes that the plaintiff's pain is chronic, were not enough to start the limitation period running.

Further the Court of Appeal said that there wasn't enough evidence to conclude that the plaintiff would meet the threshold or not, so he couldn't know if he should commence a claim or not. This was despite the fact that the plaintiff had admitted during cross examination that he was uncertain if his neck pain would go away at a time more than two years before he commenced the action. In other words, he knew he had pain and he knew he might not get better.

It is interesting that the threshold seems to have protected the plaintiff from the statute of limitations.

Proof of Loss

Section 136 - "No action shall be brought for the recovery of money payable under a contract of insurance until the expiration of sixty days after proof, in accordance with the provisions of the contract,

(a) of the loss; or

(b) of the happening of the event upon which the insurance money is to become payable,
or of such shorter period as is fixed by the contract of insurance."

I would take this to mean that if a court action is started before sixty days have elapsed that the insurer may bring a motion to dismiss the action.

Is this a complete bar to a court action?

The preceding section, s. 135 of the Insurance Act, requires insurers to "furnish forms" for proof of loss to the insured. Insurers are required to send these "Proof of Loss" forms to insured claimants.

My question is this, if the insured fails to complete and return these "Proof of Loss" forms but in all other respects cooperates with the insurer and the insurer conducts a thorough investigation of the loss, can the insurer rely on the failure to complete and return the "Proof of Loss" forms as a bar to the insured's action? Or can there be "deemed" notice of proof of loss in certain circumstances? Finally, what if the "Proof of Loss" forms are completed and returned to the insurer but the insured commences her/his court action prior to waiting sixty days?