– Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37.

The plaintiff filed a claim against a number of defendants, when paint used on offshore structures failed to prevent corrosion. The plaintiff entered into Pierringer Agreements with some of the defendants, permitting them to withdraw from the litigation upon settlement, but allowed the claims against the remaining defendants to continue. All of the terms of the settlement agreements were disclosed, except the financial amounts. The remaining two defendants sought disclosure of these figures.

Settlement privilege is premised on the understanding that parties are more likely to settle if they have confidence that communications related to negotiations will remain confidential. Both negotiations and the content of the settlement agreement are covered by the privilege. To be exempt from the privilege, a defendant must establish that “a competing public interest outweighs the public interest in encouraging settlement”.
Pierringer Agreements complicate settlement privilege as they provide protections for non-settling defendants, such as requiring the settling defendant to make its settlement evidence available to non-settling parties upon discovery, as was the situation in this case. A crucial aspect of Pierringer Agreements is that a non-settling defendant can only be held liable for its share of the damages, and severally, but not jointly, liable with the settling defendants.

In denying the request for disclosure of the settlement amounts, the court found that such knowledge would not materially affect the non-settling defendants’ ability to fully know their case. Furthermore, the settling defendants were able to come to an agreement without the benefit of a previous settlement agreement.