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WHEREAS the Province of Alberta operates under a joint and several liability system; and
WHEREAS a joint and several liability system can result in a municipality paying damages disproportionate to their contributory negligence; and
WHEREAS the results of successful joint and several liability claims can result in increased insurance premiums for municipalities because of the additional risks created by this system; and
WHEREAS British Columbia and Saskatchewan have successfully implemented other systems of liability sharing while other jurisdictions are currently pushing for such reform; and
WHEREAS joint and several liability reform in Canada lags far behind the reforms seen in the United States and Australia; and
WHEREAS there has been growing national consensus in favour of reform but little progress made towards those ends in Alberta;
THEREFORE BE IT RESOLVED that the AAMDC advocate to the Government of Alberta, reforms to joint and several liability legislation in the province of Alberta to protect municipalities from unfair financial judgments disproportionate to their contributory negligence.
A fundamental principle of Canadian law is that a victim should be able to recoup their loss in full. In an effort to aid those who suffer damages as a consequence of the actions of wrongdoers, most Canadian jurisdictions, including Alberta, have adopted a joint and several liability system. In Alberta, this system of liability is outlined in the Contributory Negligence Act.
Under a joint liability system, each wrongdoer is 100 per cent liable to the plaintiff for all damages suffered. For example, if defendant A is found to be 70 per cent at fault, and defendant B is found to be 30 per cent at fault, the plaintiff would have the right to recoup 100 per cent of the damages from defendant B. Defendant B in turn would be entitled to receive indemnification from defendant A for the amount advanced to the plaintiff for defendant A’s fault.
A system of joint and several liability protects the victim in at least two respects. First, the plaintiff victim is saved from the inconvenience of having to collect from multiple parties. Second, the plaintiff victim is safeguarded in the event that one or more of the parties is financially unable to pay. While this system does much to achieve full recovery for the plaintiff, it does so at the disproportionate expense of certain defendants.
In some cases, “deep pocket” defendants such as municipalities end up paying all or most of the damages, while the other defendants who happen to be primarily at fault walk away without making a contribution that reflects their proportionate level of fault.
Aside from the inherent unfairness that joint and several liability may perpetuate in respect of certain defendants, joint and several liability arguably creates other adverse consequences, particularly to those defendants with deep pockets. For example, joint and several liability undoubtedly results in increased insurance premiums for the likes of municipalities because of the additional risks created by this longstanding principle.
The effects of joint and several liability on municipalities are manifest in several areas including claims related to motor vehicle accidents, road safety, building inspections, and facility and event safety. It has also resulted in increased insurance premiums and in many communities, has caused municipal governments to scale back the scope of the services provided to citizens in an effort to limit liability exposure and the duty of care.
As a result, municipalities, and other “deep pocket” insured’s have become increasingly vocal in calling for reform of joint and several liability.
The AAMDC has no active resolutions directly related to this issue. The AUMA has a similar resolution awaiting vote at the upcoming convention.
The issue of joint and several liability reform is a complex one with many impacts for both the tort system and for potential plaintiffs and defendants across Alberta. The Alberta Law Reform Institute has reviewed the issue of joint and several liability in its general application in Alberta, and found that there is no cogent reason to change the law.
At this time, the Government of Alberta is not looking at opening the issue of reform on joint and several liability, but we would be pleased to review further information that your association may have in this regard.
Both the provincial government and the Alberta Law Reform Institute indicate very little appetite to reform in this area of law. The AAMDC will continue to advocate the intent of this resolution through formal ministerial meetings.