By Richard Bogoroch and Melinda Baxter
January 19, 2007
Mary Carter and Pierringer Agreements are powerful and extraordinary tools to achieve settlement. In recent years, with complex multi-party litigation becoming increasingly common, these agreements have performed an indispensable role in the pursuit of justice for injured victims by guaranteeing a minimum result, reducing the expense of litigation and shifting the burden to the non-contracting defendants. This paper and the accompanying materials are intended to assist in the drafting and implementation of Mary Carter and Pierringer Agreements.
Mary Carter Agreements
The potential for the use of a Mary Carter Agreement arises when a plaintiff has sued at least two parties as joint and several tortfeasors and where at least one of the defendants wants to settle with the plaintiff and the other does not.
Mary Carter Agreements are limited only by counsel’s imagination and the exigencies of the case. Mary Carter Agreements owe their genesis to the Florida case of Booth v Mary Carter Paint Co. In the United States, a typical Mary Carter Agreement has these features:1
- The Plaintiff is guaranteed a minimum recovery and the Defendant’s exposure is capped at the agreed-upon amount of settlement;
- The contracting Defendant remains in the litigation;
- The settling Defendant’s liability decreases in direct proportion to any increase in the nonsettling Defendant’s liability; and
- The terms of the Agreement are to be kept secret from the non-settling parties.2
1 202 So. 2d 8 (Fla. 1967).
2 Wee Pettey v. Avis Car Inc. (1993), 13 O.R. (3d) 725. – (p. 7 of the Quicklaw version included in the 2 materials)
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