On June 28th, the Ontario Superior Court of Justice ordered production of a proportionate liability (Pierringer) settlement agreement to a group of non-settling defendants despite an argument that production was unnecessary until after trial.
The matter was about a young boy who died from injuries he suffered after a folding cafeteria table he was moving across his school gymnasium collapsed. His family brought an action against the school board and a separate action against the designer, manufacture and distributors of the table. The school board settled before the hearing of a motion to consolidate the two actions. It entered a “Pierringer” like agreement with the plaintiffs – that is, the plaintiffs released the school board from the action on an agreement to reduce their claim against the non-settling defendants by the school board’s share of the total liability.
Master McLeod rejected the plaintiffs’ argument that the agreement should only be disclosed after the trial, when damages have been assessed. In doing so, he stressed the importance of full production to planning and strategy:
Calculation is a central issue at trial but knowing the amount actually in dispute is also critical to litigation planning and strategy. In general a defendant is entitled to know what the actual amounts in dispute are so that informed decisions may be made about whether to defend or offer to settle and what procedures may or may not be justified.
The principle of proportionality makes the actual damages as opposed to the pleaded damages additionally relevant because if the parties do not know what amounts are really at stake it is difficult to make informed decisions including proportionality as a principle. Proportionality is supposed to inform not only the decisions of the court concerning the application of the rules but also to inform the discovery planning that is now a mandatory step….
Other aspects of a partial settlement may also be relevant. For example it would be relevant if the former defendant has obligated itself to give access to all of its documents, to make witnesses available for interviewing or conversely if the plaintiff has restricted its ability to access such documents or information. It would be relevant if the former defendant has contractually bound itself not to co-operate with the other defendants or has agreed that it will extend such co-operation. One reason these kinds of agreements are relevant is because they may bring the documents or witnesses into the possession, power or control of the plaintiffs. This will be important for production and discovery planning. Similarly the former defendant may or may not have obliged itself to preserve documents and other evidence. All of this will be important for the non settling defendants to know so that they may bring appropriate motions or factor this into the discovery plan.
Master McLeod did, however, decline the non-settling defendants’ request for an order allowing non-party discovery of the school board. Although it was apparent the school board was in custody of relevant records and employed a number of witnesses, Master McLeod held that the motion for non-party discovery was nonetheless premature until the continuing defendants completed discovery of the plaintiffs. Instead, he issued a generally-worded preservation order directed at the school board.