Rule Against Overcompensation In Pierringer Settlements Should Be Applied Generously In Favour Of Plaintiffs

On September 21, 2018, the Court of Appeal released its decision in Canadian Natural Resources Limited v Wood Group Mustang. The Court provided important clarity on how proportionate-share settlement agreements, also know as Pierringer Agreements, impact damage awards.

Pierringer Agreements provide a plaintiff with an alternative to the difficult task of trying to settle with all of the defendants in a lawsuit at once. Instead, they allow them to settle with some defendants (Settling Defendants), who withdraw from the lawsuit and are indemnified by the plaintiff for any negligence found against them at trial. The plaintiff then proceeds to trial against the remaining defendants (Non-Settling Defendants) with its recovery limited to the Non-Settling Defendants' proportionate share of liability.