Joint and several liability review announced

Some personal injury lawyers say such a review is unnecessary, especially when previous reviews have decided that no changes should be made.

“I would personally prefer that they just leave it the way it is,” says Peter Cronyn, a partner at Nelligan O’Brien Payne LLP in Ottawa.  “I think it’s a very fair and appropriate way of dealing with losses where an innocent party will have the best opportunity of being placed in the position where they would be if the event hadn’t happened by the combined activities of the wrongdoers. It’s been in place for over a century. It’s worked well for that period of time.”

The Negligence Act says that when someone is hurt because of the negligence of two or more persons, the defendants are “jointly and severally liable to the person suffering loss or damage for such fault or negligence, but as between themselves, in the absence of any contract express or implied, each is liable to make contribution and indemnify each other in the degree in which they are respectively found to be at fault or negligent.”

This means that if one defendant can’t pay their portion of the costs, the other defendants have to pay for that portion as well as their own. Potentially, this could mean someone who is found one per cent guilty could have to pay all the costs.

“Joint and several liability is a protection measure to ensure that somebody who has been wrongly injured through no fault of their own [gets] properly compensated and put in the position they would have been had the wrongful incident not occurred, which is what the purpose of negligence law is,” says Shane Katz, who practises with Singer Kwinter in Toronto. In his experience, he says, most cases settle out of court.

“Where one of the defendants is unable to satisfy a judgment or is judgment proof, then the other defendant, if they are found to be at least one-per-cent liable, can be exposed to enforcement of the entire judgment,” says Warren Whiteknight, an associate at Bergeron Clifford LLP in Kingston, who acts only for injured parties.

In his experience, he says, one defendant likely won’t have to pay all the costs when multiple parties are negligent.

“It is common? No. Is it a real risk? Yes,” he says. “Is it an increasing topic of importance given the shrinking accident benefits? Yes, absolutely, because those people that are most injured in car accidents — who need the most care — have now half the amount of benefits that they did just a couple of years ago. Plaintiff lawyers have the obligation to look for that extra insurance.”

However, Andra Maxwell, deputy city solicitor and litigator at the City of Mississauga, says the current system of joint and several liability puts municipalities at risk for having to pay for other wrongdoers’ negligence.

“Joint and several liability puts municipalities in the position of the so-called ‘deep pocket’ defendant,” she says. Lawyers may feel pressure to include municipalities as a defendant because they know they have more resources available to them than other defendants, she says.

Municipalities do try to prevent injuries, she says.

“Municipalities are always engaged in risk management, and that also comes with a cost,” says Maxwell. “What we’re talking about with joint and several liability is the municipalities potentially picking up the tab for somebody else’s responsibility. Increased risk management is not going to protect us from someone else’s negligence and a co-defendant’s insolvency. Risk management can only improve our exposure to our own liability.”

Mississauga, like many municipalities, is self-insured, she says.

It’s difficult to say how much of insurance increases are a direct result of joint and several liability, says Maxwell, but what is clear is that insurance costs are rising.

“Legal expenses and the damages awards are paid by the city, not the insurer, in the majority of cases, which means those expenses are funded by the residents through property tax dollars,” she says. “Those tax dollars could be used to provide other social services.”

Municipalities have often been concerned about potentially paying more when other defendants cannot afford their portion of the costs and that joint and several liability is causing them to pay more for insurance.

Ford referenced this in his announcement.

“We will gather the facts and fix what needs fixing,” he told the conference. “We have heard your concerns about increasing insurance costs and the impact that these costs can have on property taxes, on municipal taxpayers and on the average Ontario resident.”

“We need to make sure that the vulnerable injured people are fairly compensated,” he said. “We will look at this evidence and develop a solution that makes sense.”

Brian Gray, spokesman for the Ministry of the Attorney General, said in an email to Law Times on Feb. 13, “It is too soon to speculate about what those changes may be. We will need to look at the evidence and develop solutions that make sense for the people. The government will be very interested in hearing more and obtaining the facts around what is driving insurance costs for municipalities.

“The government will have more to say about the process and the timing for the consultations soon.”

Gray wrote in a later email that, right now, the government plans to focus on municipalities’ concerns about rising insurance costs and liability chill, along with the need to make sure plaintiffs are fully compensated. Allen Wynperle, president-elect of the Ontario Trial Lawyers Association, says the association would “absolutely” be willing to participate in the review. Any changes need to be informed by evidence, he says.

“Joint and several liability has a lot of positive attributes,” he says.

“It allows increased access to justice. It allows efficiencies within the justice system. If we’re going to do something to alter that, we should see a clear connection between the cost of insurance and the cost of the payout and joint and several liability.”

Cronyn says joint and several liability creates an incentive for good risk management.

“The theory is that, if you really take full advantage of your risk management opportunity, not only will your corporation or your insurer not be exposed to the liability [but] you’ll avoid the injury in the first place. Everyone’s a winner in that case.”

Municipalities aren’t upset about having to pay when they’ve been found to be negligent, says Pat Vanini, executive director of the Association of Municipalities of Ontario. The organization has repeatedly asked the government to change joint and several liability.

“If municipal governments are at fault — they’ll deal with it,” she says.

Municipalities have to pay legal fees every time they’re named in a lawsuit, even if they’re not found to be negligent, she says. That’s why they’re concerned about joint and several liability.

Robert Deutschmann, a personal injury lawyer at Deutschmann Law in Kitchener, Ont. and former mayor of North Dumfries, Ont., says joint and several liability shouldn’t change.

He says municipalities are always trying to save money but joint and several liability was not raised as a contributing factor in insurance costs when he was a municipal politician.

“A plaintiff shouldn’t be hurt because of the initial injury and then hurt again because they can’t collect their damages from the defendants who are as a group responsible for the plaintiff’s loss,” he says.