Pierringer agreements allow a plaintiff in multi-party litigation to settle with some parties while continuing the action against others. The settling parties can leave the litigation, while the remaining parties are responsible only for their own share of the plaintiff’s damages.
A complication can arise where a non-settling party has brought a third-party claim against a settling party. Whether that claim can also be dismissed may depend on whether it is tied to the plaintiff’s action or is a genuinely independent claim.
In Alberta, Rule 3.44 of the Alberta Rules of Court draws an important distinction between a claim for contribution and indemnity and an independent claim.
Third-Party Claims under Rule 3.44
Under Rule 3.44(a), a party may bring a third-party claim against someone who may be liable for all or part of the claim made against that party. This commonly takes the form of contribution or indemnity: if the defendant is required to pay the plaintiff, the defendant will seek to pass some or all of that liability on to the third party.
Rule 3.44(b), by contrast, permits an independent claim by the defendant against a third party arising from the same or a related transaction or occurrence that is set out in the pleadings.
In Canadian Natural Resources Ltd v Arcelormittal Tubular Products Roman SA, 2012 ABQB 679, the Court explained the distinction.
A statutory contribution claim under the Tort-feasors Act is derivative of the plaintiff’s claim because the third party must be someone who is, or would have been, liable to the plaintiff for the same damage.
A common-law contribution or indemnity claim may have a separate legal basis because it can arise from a contract, duty of care or other obligation owed directly to the defendant. However, where the only relief sought is reimbursement for an amount the defendant may have to pay the plaintiff, the claim is derivative of the plaintiff’s claim as it still depends on the plaintiff succeeding.
A genuinely independent claim is different. It seeks recovery for a loss or remedy that exists regardless of the outcome of the plaintiff’s action.
A useful question is therefore: would the defendant still have a claim against the third party if the plaintiff’s action failed?
If not, the claim is likely dependent on the plaintiff’s action. If the defendant would still have a separate loss or remedy, the claim is likely independent.
Why the Distinction Matters for Pierringer Agreements
The Alberta Court of Appeal considered third-party indemnity rights in Amoco Canada Petroleum Co v Propak Systems Ltd, 2001 ABCA 110.
A Pierringer agreement generally limits a non-settling defendant’s exposure to the loss it actually caused. However, the settlement cannot eliminate that defendant’s right to indemnity from a settling party while leaving it exposed to the corresponding liability to the plaintiff.
The plaintiff’s remaining claim must therefore be structured so that a non-settling party does not pay an amount it would otherwise have been entitled to recover from the settling party.
Khalil v Durant, [2019] A.J. No. 1799, shows how this applies where the third-party claim is based on a separate contractual or professional relationship.
Durant, a defendant, opposed approval of a Pierringer agreement between the Plaintiff and Third Parties and argued her third-party claims should survive. Durant argued that her third-party claims against settling realtors were independent because the realtors owed contractual, common-law and fiduciary duties directly to her.
The Court in Khalil approved the Pierringer agreement, stating that although the indemnity claim brought by Durant had a separate legal basis, Durant did not claim damages beyond any amount she might ultimately owe the plaintiff.
Khalil shows that a separate contract or duty does not automatically create an independent third-party claim. The nature of the damages being claimed is also important. The Court will review all of these factors when making a decision on approving a Pierringer and deciding which claims are derivative and which claims are truly independent.
When an Independent Claim Survives
Wright (Next Friend of) v VIA Rail Canada Inc, 2000 ABQB 8, provides the opposite example.
VIA alleged that the settling party owed VIA a separate duty to warn it about dangerous emissions. The Court found that this allegation created an independent dispute that was not resolved by the Pierringer agreement. The portion of the third-party claim that was limited to the independent claim was permitted to continue, while the claims tied to the plaintiff’s action were removed.
More recently, Dyte v Total Point Developments Inc, 2025 ABKB 530 reaffirmed that Pierringer agreements must protect indemnity rights arising from separate contractual or tort duties. The agreement must prevent the plaintiff from recovering an amount from a non-settling party that would otherwise have required further contribution or indemnity from a settling party.
Key Takeaways
The distinction between Rule 3.44(a) and Rule 3.44(b) can be important when a Pierringer agreement involves a party that is subject to a third-party claim.
A claim is not necessarily independent simply because it is pleaded in contract, negligence or another separate cause of action. The court will always consider whether the claimant seeks a loss or remedy that exists independently of the plaintiff’s action.
Where the third-party claim only seeks to pass on liability arising from the plaintiff’s claim, a properly structured Pierringer agreement can address that claim by protecting the non-settling party from paying an amount it could otherwise recover from the settling party.
Where a genuinely separate loss or remedy is claimed, however, that independent claim may continue despite the settlement.
For parties entering Pierringer agreements in multi-party litigation, identifying whether a third-party claim falls under Rule 3.44(a) or is genuinely independent under Rule 3.44(b) can be an important part of structuring an effective settlement.
Our lawyers at DWF are regularly involved in drafting Pierringer agreements and advising on all options available to clients for structuring settlement of claims. Please reach out to a member of our team if you have any questions or need advice.
This article was written by Summer Student Noor Ulain, with editing by Senior Associate Tanner E. Oscapella.