On September 21, 2018, the Court of Appeal issued its decision in Canadian Natural Resources Limited/Wood Group Mustang. The Court has made great clarity on the impact of the agreements on partial actions, including the Pierringer agreements. These two conditions for Bedard`s principle of overcompensation should limit the circumstances in which a recovery situation will occur in the Settlements of Pierringen. While some very favourable comparisons can still lead to overcompensation, by no longer taking into account co-accused negligence and by deducting fees for lawyers and clients, we expect recoveries to become rare. While the Court of Appeal left the final question to the Supreme Court of Canada as to whether the principle of overcompensation should apply in Pierringer`s comparative context, this decision resolved important aspects of the doctrine. The Court also found that an overcompensation would only occur once an applicant had been fully compensated for the costs incurred in guaranteeing the transaction. As such, a plaintiff is entitled to deduct from the aggregate compensatory amounts they paid his solicitor-client fees related to the defendant`s lawsuit, in order to determine whether a overcompensation is incurred. One of the alliance`s main problems was the application for a cash injunction, which would prevent the uncontested defendant from asserting rights against another defendant if ultimately found liable. The court found that it had jurisdiction to compel an inpaid defendant to drop charges against the defendants, including cross-claims and knights of claim to implement Pierringer`s agreement. The Court found that there was no reason to sue the defendant`s assessment compensation rights if the undisputed defendant was only liable for his share of proportionate liability under a De Pierringer agreement. In a typical case of Pierringer`s contract, the applicant commenced an action against two hospitals and a neonatologist in MacNeil v Kajetanowicz through his trial leader. The complainant settled both hospitals in a Pre-trial agreement between Pierringer, and the neonatologist became the only defendant in court.
In Sable Offshore Energy Inc. v. Ameron International Corp., the Supreme Court of Canada considered whether the uncontested defendants were entitled to know the amount of the transaction. The Court found that the unskilled defendants were not entitled to disclose the amount because of a transaction privilege. The Supreme Court of Canada`s decision provides a welcome clarification of the obligation to disclose the amount of settlements contained in the Pierringer Agreements. The Pierringer agreements are a very important and useful instrument that is used to enable partial decounting for multi-party operations. The law is now clear. Unsolicited defendants are entitled to timely disclosure of the terms of the pierringer agreement, with the exception of the quantum of the transaction. Habitat privilege is alive and well in Canada. The Supreme Court of Canada allowed the appeal and found that the uns established defendants were not entitled to disclose the amount of the transactions.
The Court carefully considered the privilege of the transaction and confirmed its importance, given that the privilege of the transaction is a class privilege and that there is a presumption of inadmissibility. The multi-party litigation transaction will be encouraged, as confirmed by the Supreme Court of Canada in Sable Offshore Energy Inc. against Ameron International Corp. A common mechanism for obtaining comparisons in multi-party disputes is the so-called Pierringer Agreement.