Understanding Pierringer Agreements

The nature of business often requires working in a network – where separate and overlapping organizational needs must be met under strict professional agreements. For businesses and professionals operating in Indonesia, understanding the nature of these agreements is paramount to completing complex tasks. However, as any parent may know, sibling rivalries can create additional challenges. In Alberta Canada, one solution utilized is a comprehensive pierringer agreement in Alberta, which can be a vital asset for Indonesian businesses.

General legal agreements can be strict with limitations for operations, but it can be even worse if a party is held responsible for a bioweapon, car accident, or carnival ride gone wrong. Damage from such an event usually results in a complex legal situation – requiring the time and resources of multiple stakeholders. In many cases, the best solution for stakeholders facing prosecution is to initiate a pierringer agreement.

Put simply, a pierringer agreement is a settlement concept developed in Ontario under Pierringer v. Hope. Under this settlement, parties are allowed to pursue legal satisfaction without placing the primary burden on any person (or organization) in a multi-party scenario – wherein multiple plaintiffs are involved in one action. When creating such an agreement, the consenting agreement sets forth that each party agrees to “pierringer” – separating from the group for the purposes of the lawsuit.

In this case, to ‘pier’ means dividing the responsibilities so that any action placed against a third party plaintiff is separated from their co-defendants in the case. This allows the plaintiff(s) to continue pursuing litigation against other stakeholders without seeking the equal share liability to all named parties.

Pierringer in Alberta

When English precedents were set forth regarding the use or creation of a pierringer agreement, there was no universal acceptance in Alberta. The practice technology law in Alberta did not necessarily allow this legal approach for the benefit of multiple users.

That’s why in 1989, the Supreme Court of Canada decided in Pierringer v. Hope that: “A plaintiff may, with the consent of the defendants, settle his claim against one of them before trial and may proceed against the other defendants, in the action, in respect of the same loss arising from the same set of facts.”

The concept has developed into what is known as the “Pierringer Agreement”. Only if all parties agree to the liability splitting elements does abandonment of a subset party from a larger group of offenders become possible.

Pierringer Agreements for Businesses

For businesses, there is a clear benefit to litigating with a broader range of stakeholders when similar interests are involved. Instead of approaching a problem separately, with each litigant carrying the burden of each other, a single entity can make for a much more effective solution.

What’s more, the benefits of being on the same side of a case, without having to follow the same path, is rather evident. You are still free to negotiate, settle, and reach resolutions without the legal obligations found in a general group. However, every step must be taken with diligence and care. If you don’t reach a consensus, you may find even worse legal trouble.

For Indonesian businesses, knowing about the pierringer agreement may not seem that useful. However, such agreements can provide the following benefits:

The Lessons of Alberta: Utilizing Legal Agreements in Business

When dealing with complex legal arrangements, no business wants to lose out on the consideration of others. Thus, the use of legal tools agreements created in Alberta can help you meet your goals and objectives in a cost-effective manner. Determining the uses of such agreements requires additional investigation of your duties to others. But, in most cases, the global approach to doing business should be continued.