Ontario Court of Appeal Clarifies Limits on Claims for Contribution and Indemnity against a Party’s Lawyer
In Hengeveld v. The Personal Insurance Company, 2019 ONCA 497, the Ontario Court of Appeal addressed the issue of when a claim for contribution and indemnity is available against a party’s lawyers.
Hengeveld involved the destruction of evidence relevant to a personal injury case. The plaintiffs sued an insurance company for failing to preserve the vehicle that one of the plaintiffs was driving when he was injured. The plaintiffs alleged that the failure to preserve the vehicle would impair their ability to prove their case in a separate personal injury action related to the accident. In its defence, the insurance company argued, among other things, that the plaintiffs were negligent in failing to ensure the vehicle was preserved as evidence. The insurance company also brought a third party proceeding for contribution and indemnity against the plaintiffs’ lawyers, alleging that the lawyers breached their duty to the plaintiffs to ensure that the vehicle was preserved.
The Ontario Superior Court of Justice concluded that the third party claim against the plaintiffs’ lawyers should be struck. The Court of Appeal agreed.
The Court of Appeal considered the provisions of the Negligence Act, R.S.O. 1990, c. N.1. The Negligence Act allows a defendant to raise as a defence contributory negligence on the part of the plaintiff to reduce the plaintiff’s claim against the defendant by the plaintiff’s relative degree of fault. It also allows the defendant to seek contribution and indemnity from a third party, who the plaintiff did not sue, by way of a third party claim to obtain indemnity from the third party in accordance with the third party’s relative degree of fault. However, a defendant cannot “double dip” by reducing the plaintiff’s claim twice – once through the plaintiff, and once through a third party – where both reductions are based on the same conduct. Accordingly, if the negligent conduct of a third party lawyer is attributable to the plaintiff, the defendant can raise the claim directly against the plaintiff by way of defence, and has no cause of action against the lawyer.
The Court identified two situations in which the negligence of a plaintiff’s lawyer is attributable to the plaintiff: first, where the lawyer’s alleged negligence relates to advice about the plaintiff’s duty to mitigate a loss that has already occurred, and second, where the alleged negligence is committed by the lawyer as agent for the plaintiff, within the scope of the agency. In both cases, a third party claim will not lie against the lawyer because the defendant can raise the claim directly against the plaintiff.
On the facts of this case, the Court noted that there was no pleaded negligence arising from acts that fell outside of the lawyers’ retainer, and so the lawyers’ alleged negligence in failing to take steps to ensure the vehicle was preserved was committed as agents for the plaintiffs. The Court found that because the alleged negligence was attributable to the plaintiffs through their lawyers as agents and had been raised by the insurance company to obtain a reduction in the plaintiffs’ claim, it could not support a third party claim against the lawyers.
In this decision, the Court of Appeal has thus clarified that there is no cause of action for contribution and indemnity against a plaintiff’s lawyer where the alleged negligent conduct is attributable to the plaintiff.
Hengeveld v. The Personal Insurance Company, 2019 ONCA 497
Date of Decision: June 17, 2019