The Pierringer Predicament: When Can Non-settling Defendants Be Left Holding The Bag?

Pierringer agreements can be a valuable tool to encourage settlement in multi-party litigation. They can contribute to reducing the delays, expense, and stress of litigation; they can also provide some measure of finality for settling defendants. In multi-party litigation, non-settling and settling defendants may disagree on whether the court should approve a Pierringer agreement. The court will generally only decline to approve a Pierringer agreement when it significantly prejudices a non-settling defendant and when that prejudice outweighs the public interest in encouraging settlements.

This was squarely the issue before the Court of Appeal for Ontario in Cadieux v. Cadieux.¹ The lower court had approved a Pierringer agreement over the objection of the non-settling defendants who then appealed. The appellants argued approval of the agreement significantly prejudiced them because they were left to defend with other non-settling defendants who were potentially