In a decision that reinforces the utility of Pierringer agreements in complex litigation, the Ontario Court of Appeal (“ONCA”) has upheld a motion judge’s approval of such an agreement in Cadieux v. Cadieux, 2025 ONCA 405. The ruling provides guidance on the enforceability of partial settlements in multi-party tort actions, particularly where catastrophic injuries and limited insurance coverage are at play.
Background: A Catastrophic Collision
The case arose from a devastating motor vehicle accident in April 2010 at the intersection of Merivale and Fallowfield Roads in Ottawa. A tractor-trailer, driven by an employee of United Petroleum Transport Ltd., was travelling northbound on Merivale Road. At the same time, a minivan entered the intersection on a red light and collided with the truck. The minivan driver later admitted fault. His two minor children, who were passengers in the vehicle, sustained catastrophic injuries.
In 2012, the children (through their litigation guardian) filed a lawsuit against multiple parties: the minivan driver, the truck driver, United Petroleum, their respective insurers, and the City of Ottawa. The plaintiffs alleged that Ottawa was negligent in its design of the intersection.
A cost-of-care report for one of the children projected future care expenses exceeding $14 million, far surpassing the combined insurance coverage available from the minivan driver and United Petroleum. The City of Ottawa, being self-insured, was not subject to third-party policy limits.
The Agreement and the Appeal
In October 2023, the plaintiffs entered into a Pierringer agreement with the City of Ottawa. This agreement is a type of partial settlement that allows a plaintiff to settle with one or more defendants in a multi-party lawsuit while continuing to pursue claims against the others. The settling defendant is released from the action, and the plaintiff agrees to limit recovery from the non-settling defendants to their respective shares of liability. This structure promotes settlement while preserving fairness for the remaining parties.
Under the terms of the agreement between the plaintiffs and the City of Ottawa:
- The plaintiffs would amend their pleadings to limit the liability of the non-settling defendants to their proportionate share of fault.
- The trial court would retain the ability to apportion liability among all defendants, including Ottawa.
- The City would be released from the action, and the plaintiffs would proceed only against the remaining defendants.
In April 2024, a motion judge of the Ontario Superior Court of Justice approved the agreement and allowed the amendments to the pleadings.
The non-settling defendants appealed, arguing that the agreement was prejudicial. They claimed that if the minivan driver’s insurance was exhausted and he could not personally pay the shortfall, they would be unfairly held jointly and severally liable for his share, without contribution from Ottawa. They also sought the right to argue for a proportionate reduction in their liability after trial, based on Ottawa’s share of fault.
Court of Appeal’s Decision
The ONCA dismissed the appeal, affirming the motion judge’s decision on all points, finding:
- No error in the approval of the Pierringer agreement.
- No merit in the appellants’ claim of prejudice.
- No basis to allow the appellants to argue for a post-trial proportionate reduction of their liability.
The Court emphasized that the Pierringer agreement was properly structured and consistent with established legal principles. It allowed for fair apportionment of liability while protecting the plaintiffs’ ability to recover damages.
Key Takeaways
The Cadieux decision reinforces the strategic value of Pierringer agreements in complex, multi-defendant litigation. For plaintiffs, it confirms that partial settlements can be structured to secure meaningful compensation without compromising claims against remaining defendants. For defence counsel, it clarifies the limits of challenging such agreements and underscores the importance of assessing exposure considering potential co-defendant insolvency or settlement. Ultimately, the ruling affirms that when properly drafted and judicially approved, Pierringer agreements remain a powerful tool for advancing resolution while preserving fairness and procedural integrity.
