Prepared by Alexandra Ormond, Articling Student
The 1% rule compels a defendant who may only be 1% at fault to pay the plaintiff’s entire judgment. The “1% rule” comes from s. 1 of the Negligence Act:
Where damages have been caused or contributed to by the fault or neglect of two or more persons, the court shall determine the degree in which each of such persons is at fault or negligent, and, where two or more persons are found at fault or negligent, they are jointly and severally liable to the person suffering loss or damage for such fault or negligence, but as between themselves, in the absence of any contract express or implied, each is liable to make contribution and indemnify each other in the degree in which they are respectively found to be at fault or negligent.
Municipalities are often caught by this rule in circumstances where they bear a fraction of the liability but have deeper pockets than the other defendant(s) and therefore end up paying more than their portion of damages.
For example, if a passenger is injured in single vehicle collision which is 90% the fault of the driver and 10% the fault of the municipality for failing to properly maintain the roads, both the driver and the municipality are 100% liable for the plaintiff’s damages. If the driver is unable to pay their full portion of the damages, then the municipality will end up paying greater than their share of the damages. This scenario often arises when the plaintiff’s damages are assessed at an amount that exceeds the driver’s insurance policy limits, and the municipality is obliged to pay anything above this amount regardless of the percentage of fault.
The purpose of the Negligence Act is to facilitate full recovery of the plaintiff’s loss, while at the same time providing a mechanism for each of those who contributed to the loss to share the financial responsibility; although this purpose makes sense in theory, in practice it often results in the party with the deepest pockets paying more than the proportion of its respective degree of fault.
For more information on our personal injury services and practice area, please contact Caroline Failes, Partner, Head of the Personal Injury Law Group at firstname.lastname@example.org or 613-566-2849. You can also visit PerlawPersonalInjury.ca.