Know Your Exposure: Joint and Several Liability Explained

By Parveen Shergill
Categories: Blog, Business Law, Litigation

The legal concept of “joint and several liability” confuses many people. As the name suggests, where “joint and several liability” applies, liability is both:

1.     joint, i.e. together, all are liable; and
2.     several, i.e. each is individually liable.

Responsibility is ascribed to both (or all) of those people with joint and several liability.

So what does this mean? It means we can be liable for the actions of others.

In a lawsuit with multiple people being sued (co-defendants), this means that the claimant (the plaintiff) may seek compensation from multiple parties, not really caring where the compensation ultimately comes from. By naming parties “jointly and severally,” the co-defendants may be individually liable for damages, or they may share responsibility for compensation on a fractional basis. They are on the hook for the full losses or damages; however they may seek contribution from each other.

Joint and several liability can arise in a variety of contexts, including the following:

1.     General Torts. A tort is a civil wrong or “wrongful act” that causes damage to another. The most common tort is negligence. Where more than one party commits the tort, they can both get sued as “joint tortfeasors” and can be found jointly and severally liable – even though they may have different degrees of fault: see Negligence Act, RSBC 1996, c 333.

2.     Partnerships. Joint and several liability is a fundamental characteristic of partnerships.

What many people do not know is that a partner of a firm or organization is liable jointly for all debts and obligations of the firm, as set out in the Partnership Act, [RSBC 1996], c 348, at s. 11. Partners can also be liable for each other’s wrongful acts or omissions in the ordinary course of business: s. 12.

3.     “Principal and Agent” Relationships. The “principal and agent” relationship arises in a variety of contexts, most commonly in employment. In this context, the “principal” authorizes an “agent” to act on the principal’s behalf.

This commonly arises in the employment context, where the employer is the principal and the agent is the employee. Employees can often enter into agreements or incur obligations on behalf of their employer.

Employers can be held liable for wrongs committed by employees acting within the scope of employment. This is called “vicarious liability”: T.(G.) v Griffiths, [1999] 2 SCR 570. An employer and employee have been characterized as “joint tortfeasors” where the employee commits a tort within the scope of his or her employment: Cruise Connections Canada v Szeto, 2015 BCCA 363, citing The Koursk, [1924] P. 140 at 155 (CA).

Employers can also be exposed to liability for the acts of employees who have authority to enter into contracts and legally bind the employer. In these circumstances, the employer is liable for the obligations under contracts that the employee enters on the employer’s behalf.

This article is simply meant to highlight a few ways people and businesses face exposure for the liabilities of others. Your lawyer can help you understand the scope of your exposure to such liability, and minimize it where possible.