Joint and Several Liability. What is all the Fuss About?
Premier Doug Ford has promised to look at reforming Ontario’s negligence laws with respect to joint and several liability. The reason for this promise is a concern by small municipalities that they might be found responsible for a large court judgment even when their responsibility for a claim might be very small in comparison.
Is there anything to be concerned about here? Yes, lots, but not what the municipalities are concerned about.
A brief primer will likely benefit.
Joint liability is when two or more defendants are liable up to the full amount of an obligation. If one defendant dies or is otherwise impecunious the other defendant(s) remain fully liable for the entire obligation.
Several liability, or also called proportional liability, is where the parties are only liable for their respective obligations, and in the case of a negligence claim therefore in proportion to their fault.
Joint and several liability is where two or more defendants are liable for the entire obligation irrespective of their proportionate fault, and then it remains up to the defendants to sort out liability and payment or cross claims amongst or between them. The law of Ontario is currently such that defendants in most injury tort claim or negligence claims are jointly and severally liable.
Small rural municipalities are the large voice in the conversation with Doug Ford at the moment. These municipalities are responsible for enormous tracts of low volume rural roads and other infrastructure, and in my experience, as a plaintiff’s injury lawyer these municipalities do often end up involved in court cases involving serious injuries whether in a car accident, ATV or snowmobile accidents, or other such incidents. The municipalities say that they are often brought into claims with the hope of attaching one or two percent liability to them, but then with the option to satisfy the entire judgment against the municipal insurance policy, particularly when another defendant may either be judgment proof or have insufficient insurance limits.
I note that none of the articles that I have read on the subject point to any cases where a municipality has been stuck with a judgment of millions of dollars but was only at fault for a very small percentage of the negligence. On the contrary, many of the judgments that are pointed to are in fact claims solely against the municipality such as tobogganing accidents, mountain biking accidents, swimming accidents, or single vehicle accidents on unmaintained or poorly designed roads. None of these cases involve joint and several liability and are red herrings.
Another thing raised by municipalities is that paying out one of these judgments has or will increase the insurance cost within the municipality immensely and thus might affect property taxes and other public expenses for taxpayers. I don’t mean to sound cynical, but this rings hollow given a very similar argument that resulted in dramatic and disastrous legislative reform only recently. Ontario’s accident benefit scheme for no fault car accident benefits is and has been continually reformed.
In 2016 the benefits available to catastrophically injured car accident victims were slashed in half in the name of protecting the integrity of premiums and keeping costs low for members of the public. There was a corresponding promise to reduce premiums. Not only have premiums not been reduced at all, but the effect of the cuts has been not to erase catastrophically injured accident victims need for medical care, but simply to shift the burden of the cost of that care to the publicly funded OHIP system and away from the privately held multi-billion-dollar profit industry of insurance. Thankfully the new provincial budget has proposed to restore the catastrophic insurance limits to their previous levels, and we hope that will come to pass.
If small rural municipalities are really concerned about not being exposed to massive judgments they should look no further than ensuring that their own municipalities have solid protocols in place to assess local risks. Further with respect to car accidents, municipalities should go back to the government and support the new budget which proposes to restore the accident benefits. The effect of slashing accident benefits has been to hinder the ability of catastrophically injured people and their families to obtain medical care. One reason that a plaintiff’s lawyer needs to look for larger amounts of insurance or other potential defendants in a negligence case is often because of inadequate accident benefits coverage.
In summary, the calls for reforms to joint and several liability seem to lack any connection to a real or pressing need. There is not a trend nor a pattern of municipalities being liable for large judgments in disproportionate measure to their negligence. The classic academic argument in favour of joint and several liability is that when deciding between fairness for a plaintiff who is injured and fairness for a defendant, it is fairer for the defendant, even one who is only one percent liable, to pay a disproportionate amount of a judgment than to deny an injured plaintiff their money damages as awarded by a court.
As with any complicated topic, this is one where reasonable people can certainly disagree. One thing that seems clear is that until comprehensive research and a study of past cases and the cost and benefits to all parties involved has been conducted, along with proper stakeholder consultation including insurers, municipalities, injured people and their families, it seems very premature for Premier Ford to be making any sort of promises. No steps should be taken quickly when an injured person’s ability to pay for their medical care and provide for their family is on the line.
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