Pennsylvania's New Fair Share Act
JOINT AND SEVERAL LIABILITY DEFINED
“Joint tortfeasors” are two or more persons who either act together in committing a wrong or whose independent acts unite in causing a single injury. Under prior law in Pennsylvania, such joint tortfeasors were “jointly and severally liable” to an injured party; that is, each tortfeasor was liable for the full amount of the judgment, regardless of degrees of fault. For example, if there are two joint tortfeasors, one which is adjudged 1% liable and the other 99% liable, either party — including the one adjudged only 1% liable — would be liable to pay the full amount of the judgment. However, a joint tortfeasor who paid more than his or her proportionate share of liability would have a right of contribution against a defendant failing to pay his or her proportionate share. While this scheme of joint and several liability provided a security blanket for plaintiffs by helping to guarantee payment of the judgment, it often created inequitable results and procedural wrangling among defendants to enforce contribution rights.
EFFORTS TO REFORM JOINT AND SEVERAL LIABILITY
Joint and several liability was developed in England some 300 years ago and has pervaded American law for much of our nation’s history. However, it has been replaced slowly with more equitable systems of liability such as several (or separate) liability. As of 2011, Pennsylvania was among a small minority of nine jurisdictions nationwide that subscribed to a pure joint-and-several liability scheme.
For the better part of a decade, Pennsylvania lawmakers have attempted to change this often inequitable law. In 2002, a similar Fair Share Act was signed into law by then Governor Mark Schweiker, but it was later struck down by the Pennsylvania Supreme Court because of the procedural manner in which it was passed by the General Assembly. In 2006, the Pennsylvania General Assembly solved the procedural issues and re-passed the Fair Share Act, but it was vetoed by then Governor Ed Rendell. The political will changed in Pennsylvania in the fall of 2010 with the elections of a Republication governor and Republican majorities in both houses. As a result, the Fair Share Act is now the law in Pennsylvania.
THE NEW FAIR SHARE ACT
Under the Fair Share Act, individual defendants are liable to pay only their proportionate share of the judgment instead of the full judgment, with few exceptions. The exceptions include intentional torts, intentional misrepresentation, hazardous substance releases (under the Hazardous Sites Cleanup Act), or “dramshop” liability of tavern owners. The most notable exception, however, relates to a defendant held liable for 60% or more of the total apportioned liability to all parties. If a defendant is held liable for 60% or more of total apportioned liability, that defendant remains liable to pay the full amount of the judgment. The Fair Share Act also allows the jury to consider the liability of non-parties who have previously settled with the plaintiff. The Fair Share Act applies to causes of action accruing on or after June 28, 2011, so it does not affect pending cases.
STRATEGIC CONSIDERATIONS
The Fair Share Act will undoubtedly cause litigants to rethink the initiation of a lawsuit, as well as settlement and trial strategy. For example, defendants will want to ensure that all potentially liable parties are timely joined as parties in the litigation. Defendants will also want to have the liability of non-parties who previously settled with the plaintiff considered by the jury. Needless to say, having additional responsible parties (and non-parties) on the verdict sheet may help to reduce a defendant’s overall liability, particularly below the important 60% threshold. Additionally, the decision to bring a lawsuit against the proverbial deep pocket is more complex now, as the prospect for a damage recovery against a marginally liable party may not warrant the commencement of the action.
In contrast, a plaintiff may be cautioned into entering into a joint tortfeasor release and thereby discharging the liability of a heavily insured defendant who is potentially liable over 60%, as it will remove a potential deep-pocket source of recovery.
CONCLUSION
For causes of action accruing after June 28, 2011, the Fair Share Act will apply. A liable defendant will have to pay only his or her share and not the entire judgment unless an exception applies. At long last, Pennsylvania joins the majority of states nationwide that have abandoned the often inequitable system of joint and several liability.
