The Duty To Disclose Mary Carter Agreements Immediately: New Guidance From The BC Court Of Appeal

Mary Carter agreements are settlement agreements between a plaintiff and defendant in multiparty litigation wherein the defendant ostensibly remains an active party to the litigation while the plaintiff's claim in fact targets the other parties. On September 5, 2017, the B.C. Court of Appeal (the "Court") released its decision in Northwest Waste Solutions Inc. v. Super Save Disposal Inc., 2017 BCCA 312 affirming that Mary Carter agreements must be disclosed immediately and outlining potential remedies for a failure to make such disclosure. Parties and their counsel will need to keep this in mind when considering the merits of entering into a Mary Carter agreement. In the event that such agreements are entered into, parties must act quickly to discharge their now-clear duty of disclosure.

Background

In February 2012, Northwest Waste Solutions Inc. ("Northwest") filed a notice of claim alleging that several of its former employees were induced by Super Save Disposal Inc. ("Super Save"), one of Northwest's competitors, to leave Northwest's employ and join Super Save. The claim named Super Save and the former Northwest employees as defendants.

After the claim was filed, one of the personal defendants, Mr. Lamb, left...