"No, It's Their Fault, Really": Limiting the Right to Contribution and Indemnity Between Tortfeasors 

publication 

November 2009 - (CCH Newsletter and Commercial Litigation Brief)

Canadian Insurance Law Reporter, CCH Newsletter, April 2010 and Commerical Litigation Brief Fall 2009

Traditionally, a negligent person could count on other participating parties to be held responsible for their share of the blame. Either the plaintiff would claim against both tortfeasors, or one defendant could request contribution and indemnity from the other. However, a recent Ontario Court of Appeal decision suggests that the courtroom seat beside an allegedly negligent party may now sit cold and empty.

Generally speaking, the law is that any tortfeasor who negligently caused or contributed to an indivisible injury may be fully liable for it on a "joint and several" basis. This is in the interest of making the plaintiff whole. If the plaintiff wants full recovery for the entirety of his/her damages, a wrongdoer cannot hide behind the involvement of others.

The Negligence Act, R.S.O. 1990, c. N.1 (the "Act") includes rules pertaining to contribution and indemnity between tortfeasors. This legislation mandates that each tortfeasor is responsible for the entirety of a plaintiff 's loss. However, it also makes clear that one wrongdoer can pursue another wrongdoer for his/her fault in the claimed negligence.

Sometimes, the interests of an aggrieved plaintiff may not revolve around being made whole. Especially in a class action proceeding, a plaintiff may instead prefer to seek a smaller amount of damages from a single defendant. For one reason or another, be it cost, delay or relationships, the plaintiff may want to restrict its claim to one particular party, even if it means collecting less in damages.

The Ontario Court of Appeal has recently issued a decision that addresses exactly this situation. In Taylor v. Canada (Minister of Health), 2009 ONCA 487, 95 O.R. (3d) 561 (C.A.), the Court held that so long as a tort victim limits his/her claim to the specific fault of a particular defendant, no right to contribution and indemnity by that defendant from other wrongdoers will arise.

Kathryn Taylor began a class action alleging that she suffered damage resulting from the surgical implantation of a device in her jaw. Ms. Taylor chose only to claim against the Attorney General for the Ministry of Health's negligent regulation of the devices. The Attorney General responded by bringing a third-party claim against the dental surgeon and hospital that had been involved in the operation.

The doctor and hospital resisted the third-party claim against them. Because Ms. Taylor had claimed against the Attorney General only for, "those damages that are attributable to its proportionate degree of fault," the doctor and hospital felt they could not be held responsible for such damages.

The motion brought by the third parties to dismiss the claim against them was granted. The judge held that the claim against the Attorney General was, "limited to damages for which it would have no right to contribution from any person who may have caused or contributed to the damages suffered." The Attorney General appealed to the Court of Appeal.

In a seemingly narrow view of when rights to indemnity or contribution arise, the Court of Appeal stated, "contribution rights arise only where a defendant is required to pay more than its proportionate share of a plaintiff 's damages." The Act only comes into play if a defendant is required to pay more than its share of fault for a negligent act.

The Court also allowed apportionment of fault to persons who are not parties to the litigation on the basis that the Act speaks of attributing fault to "persons," and not "parties." Therefore, as Ms. Taylor claimed solely against the Attorney General, the Attorney General is still able to argue that the doctor and hospital bear fault, despite not being parties to the action.

The Court did not feel that the Attorney General's concerns about production and discovery from non-parties could be addressed at the appellate level in this case. It was suggested that the Attorney General should be entitled to production of documents from, and examination of, the other tortfeasors even if they are not parties to the litigation. However, it is unlikely that this language will be read as binding upon lower courts because the final say on procedural protections was referred back to the case management judge.

The decision stated that it makes "good sense" to allow apportionment of damages to non-parties. At another point, it was suggested that such rules promote the streamlining of litigation and settlement.

The Court stated "because Ms. Taylor has limited her claim to those damages attributable to Health Canada's fault, Health Canada can have no claim over against the doctor or the hospital for the damages claimed by Ms. Taylor and the other class members." The mention of the "other class members" suggests that the Court was motivated by an unmentioned desire to preserve negligence actions in class proceedings. In Taylor, the class action claim against the Attorney General is for negligent regulation. If the class action involved each plaintiff 's surgical team as third parties, the litigation would likely become unmanageable. Thus, it appears that access to the courts for class members has provided incentive to permit negligence claims to proceed without the presence of indemnifying parties.

However, a few potential problems may arise. Multiple actions may now be filed (even if later consolidated) for the same tort: one for each party's share of blame. Motions may now be more commonly brought by third parties arguing that the scope of the plaintiff 's claim does not cover them. Perhaps the largest problem with allowing segregation of actions along presumed lines of fault is that tortfeasors who are not parties to litigation have no motivation to be involved in the litigation, or acknowledge any blameworthiness at all. The single defendant must offer a comprehensive defence without the benefit of other tortfeasors justifying and defending their own actions.

While Taylor may in some cases restrict contribution and indemnity claims against third parties, it does not speak to other, independent causes of action. For example, a retailer may be sued independently by a plaintiff for negligence. However, if that retailer has been supplied a faulty product, there may be an issue of breach of contract, upon which the retailer could file a claim against the supplier. Such a claim, not based in negligence, may effectively sidestep the need for contribution and indemnity.

Ultimately, whether a right to contribution and indemnity between tortfeasors exists will depend entirely on how a plaintiff chooses to draft his/her claim. Defendants must review all negligence claims to determine if the plaintiff has limited his/her claim to, "those damages that are attributable to its proportionate degree of fault." If so, a tortfeasor will not be able to pull another chair to the litigation table unless they have another form of entitlement independent of the negligence claim.


This article appeared in Lang Michener's Commercial Litigation Brief Fall 2009.