If you have ever dreaded defending a negligence case in Pennsylvania because joint and several liability could expose you to liability for an entire verdict even if found one percent negligent, then you will welcome this news: Governor Corbett has signed legislation into law that now alters the mechanics of civil liability in negligence and strict liability actions for injury to person or property in Pennsylvania. With certain exceptions, joint and several liability is eliminated in cases where a defendant is found to have been less than 60 percent at fault, with such defendants now only responsible for paying their proportionate share of a judgment.
The new "Fair Share" law can be found at Section 7102 of Title 42 of the Pennsylvania Consolidated Statutes. Although the law is effective immediately, it only applies to actions that accrue on or after June 28, 2011. The law institutes a form of "several" or proportionate share liability in negligence actions with more than one defendant. Previously, under joint and several liability, a plaintiff could attempt to recover an entire judgment from a defendant found to be even just one percent negligent. Under the new law, where liability is attributed to more than one defendant, a defendant's liability will now be several/proportionate, and not joint. The court will enter a separate and several judgment in favor of the plaintiff and against each defendant for the apportioned amount of that defendant's liability. In short, each defendant will be responsible only for the amount of liability attributed to it by the jury.
The law has certain exceptions, however, for which joint and several liability will still apply, including:
- Where a defendant is found to be 60 percent or more at fault
- Intentional torts
- Intention misrepresentation
- A release or threatened release of a hazardous substance under the Hazardous Sites Cleanup Act
- An action brought under Section 496 of the Liquor Code
For cases where joint and several liability still applies, the law preserves a defendant's right to see contribution from other defendants when it pays more than it's proportionate share of total liability. This includes the right to contractual indemnification or contribution.
Passage of the Fair Share law brings Pennsylvania into line with 40 other states. The law is being touted as beneficial for the insurance industry, since Pennsylvania has long been known for its litigious tort environment and insurers often felt the need to pay more than a case is worth due to the risk of going to trial and potentially being liable for an entire verdict, despite a small percentage of fault being attributed to an insured. Insurance companies may be more likely to allow their clients to defend themselves at trial, since the law may act as a disincentive to name individuals or companies in lawsuits when they have little or no liability. The thought is that this law will protect the rights of those who can be dragged into court by lawyers searching for "deep pockets" who bring lawsuits against those minimally responsible, or not responsible at all, due to their ability to pay, in order to extract settlements. Opponents of the law say it will hurt victims of negligent acts who seek justice in the courts and cannot pay their medical bills and/or who lost earnings.
One issue raised by the language of the Fair Share law is the language indicating it amends Pennsylvania's negligence statute, but that it also applies in strict liability actions. The law does not specifically state that strict liability defendants shall be assessed percentage liability; rather, that each defendant shall only be responsible for its own apportioned share. "Apportioned share" could be either a percentage of total liability, or a pro-rata share of liability. Indeed, case law clearly states that strictly liable defendants shall be liable for pro rata, not percentage shares. Therefore, plaintiffs may very well argue that the Fair Share Act does not change that established precedent. This may inject even further confusion into Pennsylvania case law regarding the concept of avoiding fault or negligence concepts in strict liability cases.
The law could also create confusion in actions where intentional torts (or other actions excluded from several liability) are pursued in addition to a negligence claim at trial.
Further, another issue raised by the language of the law is that "for purposes of apportioning liability only", the question of liability of any defendant or other person who has entered into a release with the plaintiff and who is not a party is to be submitted to the trier of fact "upon appropriate requests and proofs by any party". This means that a judge or jury will know whether a plaintiff has already received payment from a non-party, and allows a judge or jury to apportion liability to the non-parties with whom a plaintiff has entered into a release. This could impact the percentage of fault apportioned to defendants still in the case, and/or amount of damages awarded to a plaintiff-although the amount of any such settlement is still protected from disclosure. Notably, the law specifically states that the liability of employers cannot be submitted to the trial of fact under this scenario, due to the immunity granted an employer pursuant to the Pennsylvania Workers' Compensation Act.
Pennsylvania twice previously attempted to abolish joint and several liability, without success. In 2002, similar legislation was later held to be unconstitutional due to a procedural defect. In 2006, the law passed, only to be vetoed by former Governor Rendell. Forecasters expect the Fair Share law to be challenged as unconstitutional on grounds that it deprives plaintiffs of their ability to recover damages, resulting in a violation of their due process or equal protection rights. Indeed, the Pennsylvania Association for Justice (the state's trial lawyer trade association) has already indicated it will challenge the law in court.