Peter Hart lectured before the Chester County Bench Bar Conference for the Judges and attorneys on the new law dealing with responsibility of negligent defendants when there are more than one.
Act No. 17 which amends provisions relating to comparative negligence, became law on June 28, 2011. The new law is not retroactive. It applies to all negligence causes of action which arise on or after June 28, 2011.
It partially (or as some may convincingly argue) repeals the rule of joint and several liability.
Under the old law multiple defendants who were found to be negligent in causing one’s injuries and whose negligence was a substantial factor or factual cause in bringing about those injuries, could be held jointly and severally liable and, as a result, any one defendant could be required to pay the entire verdict. Thereafter, they could look to the other defendants for contribution. In essence, a defendant could be responsible for the entire amount of the plaintiff’s award as long as he or she was found to be at least one-percent at fault.
The new Act modifies joint and several liability by only holding each defendant liable only for his or her actual percentage of fault as determined by a judge or jury.
“…where liability is attributed to more than one defendant, each defendant shall be liable for that proportion of the total dollar amount awarded as damages in the ratio of the amount of that defendant’s liability to the amount of liability attributed to all defendants and other persons to whom liability is apportioned….” 42 Pa.C.S.A. §7102(a)(1).
THERE ARE FIVE EXCEPTIONS TO THE NEW REQUIREMENT:
1. Intentional misrepresentations.
2. An intentional tort.
3. The release or threatened release of a hazardous substance under the Hazardous Sites Clean-up Act.
4. When defendant is held liable for 60% or more of the total liability.
5. Civil actions in which a defendant violated Section 497 of the Pennsylvania Liquor Code. (Dram shop case)
THE NEW 60% THRESHOLD
The major exception is that if a defendant is held to be 60% or more at fault, then he or she can be held responsible for the entire award.
Although it is true that some states enacted similar threshold rules, even the most business friendly states still only require that a defendant be 50% or more at fault before being required to pay the entire verdict. Pennsylvania has now surpassed those front runners.
The new law also requires the court to enter separate and several judgments in favor of the plaintiff and against each defendant for the apportioned amount of each defendant’s liability.
Further, Section (a.2), of the Statute permits apportionment of responsibility not just among defendants but also among “non-parties.” However, the language that follows in that paragraph seems to describe non-parties only as other persons who have entered into a release with the plaintiff in respect to the action but have not been made parties to the action. The statute further states that this information (about settling non-parties) shall be transmitted to the trier of fact “upon appropriate requests and proofs” by any party. This language is ripe for judicial interpretation. Is a non-party only a person who settled prior to being sued; was sued in the cause of action and entered into a settlement or could it possibly involve persons or entities who were never brought into the case to begin with but could possibly have been?
Section (a.2) also states that nothing in this section shall affect the admissibility or non admissibility of evidence regarding releases, settlements, offers to compromise or compromises as set forth in the Pennsylvania Rules of Evidence. (Pa.R.E. 408 and 42 Pa. C.S.A. §6141). What does this mean? Under the Pennsylvania Rules of Evidence, releases, settlements, offers to compromise or compromises are generally not admissible at trial. How does this affect the new Act 17 statutory language which permits any party “on appropriate request and proofs” to transmit to the trier of facts so that an apportionment can be made. Does that mean that a jury will be provided information as to how much a non-party settling defendant paid or just merely the fact that a non-settling entity paid something? Will a jury then lean more toward the plaintiff or more toward the defendant?
The effect of the new law can be illustrated by a simple example: Two defendants involved in an automobile accident combine to cause the injury of a passenger in one of the automobiles. Each driver is found to be 50% at fault. Under the new law, each defendant will have to pay only his “fair share” or one half of the verdict. If the verdict is for one million dollars (think wheel chair bound) and one of the defendants only has $15,000 in coverage but the other defendant has one million dollars in coverage, the plaintiff will only be able to recover $515,000. The victim will be left $485,000 short of that to which a jury determined he was entitled. (Now think wheel chair and incontinent for life). Who is picking up the tab for the other $485,000 needed for her lifetime care? Yes, you guessed it, probably you and your fellow taxpayers. Who will reap the benefit? The insurance companies. But, of course, they will pass those savings on to the public.
MISSING FROM THE ACT
There is no exception for fraud, recklessness or gross negligence or any requirement in a Dram Shop case that the dram shop must have insurance in order for the rule to apply.
There is no exception for other egregious conduct such as illegal sales of alcohol to minors.
POTENTIAL CHANGE IN STRATEGIES FOR BOTH PLAINTIFFS AND DEFENDANTS
It is quite possible that more defendants will be sued to increase the total amount of coverage available in order to make up for the deep pocket defendants who are not held 60% or more liable.
Defendants will be more likely to sue each other and point their fingers at each other in order to bring their share below 60%.
The change in the law may be more noticeable in strict liability cases involving crash worthiness actions, asbestos actions and other mass tort type cases where the defendant’s products were a minor portion of the plaintiffs’ overall exposures.
More cases may likely be forced into trial because the plaintiff may now be forced to look at private assets.
Confusion may be created when plaintiff pleads both intentional tort and negligence in the same cause of action.
There may be an increase in underinsured and uninsured motorist claims. Plaintiffs are going to have to file UM/UIM claims more often if there are multiple joint tortfeasors who are found less than 60% responsible for the injured party’s harm.
In medical malpractice cases the new law might make it less likely for plaintiffs to sue marginal parties due to the expense, but the risk of joinder of these parties by other defendants may be enhanced. The plaintiff will always want to ensure that there is at least a 60% liable party with adequate assets while each defendant will want to diminish his likelihood of being responsible for 60%.
What effect will the law have in a case where the plaintiff fractures a leg in an automobile accident and receives medical care but a week or two later, a treating physician is careless and causes additional catastrophic injuries to the plaintiff? Are they joint tortfeasors? Will the 60% rule apply? Before the change in the law, the plaintiff perhaps would have wanted the doctor and the motorist to be jointly and severally liable in order to recover all the damages from the doctor and the hospital. Now plaintiff will argue that they are two separate causes of action.