Wednesday, June 29, 2011

Pennsylvania eliminates joint and several liability

Bad news for victims of injuries in Pennsylvania.  Gov. Tom Corbett today signed the ”Fair Share Act,”  which does away with joint and several liability.  Tort reform groups are celebrating the announcement as a "major legislative victory."  Unfortunately, what it is, is a shift from a system that erred on the side of protecting injured victims to one that errs on the side of those who injure them.  Both approaches are problematic, and the better option - a compromise through which both sides share part of the loss - was not even considered. 

This is not a major victory for anyone; it is a major disappointment that advances a flawed and, quite simply, bad public policy. 

For those who don’t remember, joint and several liability is a doctrine that allows a plaintiff to choose which defendant will be responsible for paying the value of the injuries. In many jurisdictions that follow this doctrine, it applies regardless of the level of negligence of any individual defendant. This is not the case in every jurisdiction, but let’s leave that aside for the moment - more on that later.

The main argument upon which the attack on joint and several liability is based is that it is unfair to impose liability for the full amount of the injury on a defendant who "does not cause all of the injury" or, as it is often stated, that a defendant can be made to pay 100 percent of a jury award even if he is only 1 percent liable for the injury suffered by a plaintiff.

The problem is that this argument is based on a fallacy.

The origin of the argument is usually that courts can ask jurors to assign a percentage of negligence on all tortfeasors relative to each other. The problem is that when doing this the jury is not asked to find a level of "liability." Thus stating that a defendant found to be "1 per cent liable" is simply misunderstanding what a jury does. A jury may find that one defendant was more negligent than another, but that does not mean the jury is finding any one of them should be more liable than any other.

Opponents of joint and several liability argue, however, that liability should be apportined according to the level of negligence assigned by the jury.  Say, for example, that the jury finds that one defendant was 75% negligent while the other one was 25%. In a jurisdiction that follows joint and several liability, the plaintiff can recover 100% of the value of the injury from either defendant and the defendant who was found to be less negligent typically argues this is unfair.

One problem with this argument is that the defendant who has to pay has the right to make the other defendant pay him whatever amount he paid in excess of his level of negligence.  So, if the system is unfair at all, it is only unfair if the other tortfeasor is not available to pay (either because it is unavailable, was never identified or has no money to pay). If that tortfeasor is available/has money, then after all is said and done everyone pays what they owe according to the percentages of negligence.

Now even assuming that the other tortfeasor is not available, here is the other problem with the argument. The percentage numbers are an expression of the level of negligence each defendant was found to be relative to each other. They do not refer to, or express, how much of the injury each defendant caused. By definition if we could determine what part of the injury each defendant caused, the liability of that defendant would be limited to that part of the injury because it would be contrary to the law to impose liability for something the defendant did not cause.

Joint and several liability, again, by definition, applies in cases where the injury is indivisible - when it can’t be determined which part of the injury was caused by any one defendant individually. The injury (all of it) was caused by the combination of the negligence of each defendant. Thus, each defendant caused all of it. The fact that one defendant was less negligent than the other does not eliminate the fact that all defendants caused all of the injury because we just can’t tell what part of the injury was caused by any individual defendant.

Given this, jurisdictions have to decide between two options: in the first option a defendant who caused an injury but who was less negligent the another one may end up paying more than the other defendant.  This may seem unfair to the defendant who pays but it assures that the victim obtains a full recovery.  In the second option, the victim does not get a full recovery while a defendant who caused the injury is relieved from paying for part of the injury they casused.  Pennsylvania has abandoned the first option in favor of the second one.

Although joint and several liability (the first option) is prefereable to several liability (the second one), neither option is the best. 

There are two other possible options that are better.
One alternative is to adopt a threshold before which joint and several liability does not apply. That threshold would be, by force, arbitrary, but at least there would be a threshold. Illinois, for example, sets the threshold at 25%. A defendant whose level of negligence is below that is only liable for an amount equivalent to their percent of negligence. If the level of negligence is above that, then the defendant is joint and severally liable and can, in fact, end up paying for the full amount.

If the concern is to protect defendants who were "not very negligent" when compared to the others involved in the claim, this is not a bad compromise. The important question becomes where to place the threshold. This alternative is suggested in the Restament of Torts.

Another, alternative that is definitely more fair than simply eliminating joint and several liability and that still protects the interests of defendants from having to pay the full amount when other tortfeasors can’t contribute is to adopt a system that reapportions the amount that those unavailable defendants should have paid among all available tortfeasors. The Restatement of torts considers this the most appealing alternative because it apportions the risk of insolvency to all the remaining parties in proportion to their level of negligence, thus providing an equitable mechanism for dealing with the problem. 

Now, THAT is fair.  But, of course, not surprisingly tort reformers have no interest in this...  That’s because the goal of the tort reformer is not to find a fair system but a system that provides the most protection possible to tortfeasors. The battle lines are drawn and the only alternatives mentioned are the ends of the spectrum. If those are the only alternatives, the question to ask is whether it is more fair to err on the side of the injured person or on the side of those who actually caused the injury.

If those are the only alternatives, the answer is easy: err on the side of the victim. It would be better, though, to consider the alternatives available as a compromise.

The PopTort has its own comment on this here.

1 comment:

John Day said...

Excellent post. Tennessee abandoned joint and several liability in virtually all cases and substituted several liability. An effort I made to adopt the thinking of the Uniform Comparative Fault Act was rejected.