Formerly, a Defendant paying more than its apportioned percentage of liability would be forced to seek contribution from the remaining, non-paying Defendants. Under the Fair Share Act, this practice is eliminated to a certain extent, as contribution only becomes an issue when a particular Defendant is deemed 60% or more liable and full collection from said entity is permissible under the law. Section (a)(1)(4) of the Fair Share Act also permits a Defendant to recover from other persons a portion of the damages assessed against that Defendant pursuant to the terms of a contractual agreement. Further, the trier of fact shall determine the liability of any Defendant or other person who has entered into a release with the Plaintiff. This is also deemed to be a victory for businesses.
It is argued that Plaintiffs previously included “deep pocket” companies as Defendants, such as hospitals and insurance companies, so they would be forced to cover the damages other Defendants who may have been more responsible for the harm at issue were unable to provide. This led to some referring to pure joint and several liability as the Deep Pockets Rule. Supporters of this legislation believe that Defendants with deeper pockets will now be less compelled to settle litigation for large sums rather than risk having to pay the full share of a trial verdict as they will not be responsible for full verdicts if found less than 60% responsible for the injury. Along the same lines, the Fair Share Act may also have an impact on the filing of frivolous lawsuits if it is more difficult to go after larger companies. These beliefs are not shared universally, and only time will tell the impact the Fair Share Act has on the number, and size, of Defendants included in civil litigation matters.
Another interesting aspect of the Fair Share Act will be how litigation involving multiple Defendants, some of whom may be insolvent, will be handled by Plaintiff attorneys. One possibility is counsel bringing suit against only parties believed to have funds available, should settlement opportunities exist or if the litigation is successful. This would likely result in named Defendants being forced to join additional Defendants. Though this practice would not create any major dilemmas, it will change the pattern civil litigation has typically followed in Pennsylvania with respect to Plaintiffs seeking out responsible parties, with the burden of same now shifting to the originally named Defendants.
As with all legislation, there are areas of the Act which are less clear and will be shaped by court interpretation. One aspect to consider is how this legislation will apply to actions involving purely economic harm. The Fair Share Act specifically references litigation involving death or injury to person or property, but does not include economic matters such as a straight breach of contract claim.
Author: Drew M. Rothman