By Avery Cameron
Supervised by Andrea LeDrew
Introduction
Cadieux v. Cadieux[1], is a 2025 Court of Appeal decision which considers when it is appropriate for the Court to decline approval of a Pierringer agreement.
Justice George, writing for the panel, addressed the role of Pierringer agreements in facilitating settlements in complex multi-party litigation and how to balance the benefits of these agreements with the concern for prejudice against the non-settling party.
Factual Background
The respondent, Patrick Cadieux, admitted to entering an intersection on a red light resulting in a motor vehicle accident with the appellant, Scott Ray. Expert testimony determined that the respondent had entered the intersection eight seconds after the light turned red, making it highly likely that the defendant would be found primarily liable for the accident. The accident resulted in catastrophic injuries to the minor children of the defendant, with estimated future care costs in excess of fourteen million dollars, far exceeding Cadieux’s insurance coverage.
The statement of claim named the City of Ottawa (the “City”) as a defendant, alleging that it was negligent in the design of the intersection. In an effort to eliminate any crossclaim for contribution and indemnity against the City, the plaintiffs and the City entered into a Pierringer agreement (the “Agreement”). The Agreement provided that the plaintiffs would amend their claims such that the non-settling defendants would remain jointly and severally liable only to the degree of their collective fault.
The appellants objected to the approval of the Agreement, as they were concerned that they would be responsible for not only their share of the damages, but a higher portion of Mr. Cadieux’s share than they otherwise would be without the agreement. By removing the City from the list of potential tortfeasors, the appellants were concerned that they were are risk of insufficient recovery from their co-tortfeasor. The motion judge rejected these arguments and approved the Agreement.
Key Issue On Appeal
The central issue before the Ontario Court of Appeal was whether the motion judge erred by approving the Agreement when it could lead to a non-settling party being liable to pay a higher share of the underfunded amount arising out of the potential insolvency or impecuniosity of joint tortfeasor.
The ONCA Decision
The Court of Appeal began their reasons by identifying the utility of Pierringer agreements: they encourage settlement in multi-party litigation and shield the settling defendant from any claims for contribution and indemnity from non-settling defendants. In light of these benefits, the Court considered when it would be appropriate to disallow the approval a Pierringer agreement.
According to the Court of Appeal, a Pierringer agreement should only be refused when the agreement significantly prejudices a non-settling defendant. In addition to the existence of significant prejudice, that prejudice must outweigh the public interest in encouraging settlements. Consequences of the Agreement, such as not being able to rely on the settling party sharing in any joint and several liability, does not result in significant prejudice against the non-settling party. The Court identified these consequences as inherent in the basic form of a Pierringer agreement and, therefore, do not constitute “significant prejudice”.
Examples of significant prejudice against the non-settling party may include:
- materially curtailing the non-settling defendant’s ability to know and present there case; or
- materially curtailing the non-settling defendant’s ability to pursue their own settlement (para 17).
In response to the appellant’s’ concerns regarding the risk of paying more in damages than they otherwise would have had the agreement not existed, the Court found that the Negligence Act expresses the clear policy objective to make the plaintiff whole even if it subjects one of the tortfeasors to the risk of overpaying their share of liability. This policy objective outweighs the appellant’s concerns regarding their share of damages in the proceeding.
In conclusion, the appeal was dismissed. Pierringer agreements play an important role in facilitating settlements in multi-party litigation, and courts should be hesitant to dismiss these agreements in the absence of significant prejudice against the non-settling party.
Takeaways
The Court of Appeal’s decision in Cadieux provides important takeaways.
Cadieux confirms that Pierringer agreements serve a vital role in complex multi-party litigation and are supported by strong policy justifications for their use to reach settlement.
While these agreements may result in a tortfeasor being required to overpay their share of liability to the plaintiff, this consequence is not enough to establish prejudice against the non-settling party.
A Pierringer agreement may be set aside if significant prejudice arises against the non-settling party. In the absence of significant prejudice, the Court appears willing to uphold the agreements as a valuable tool to encourage settlement in multi-party litigation.
[1] 2025 ONCA 405
