Taking the ‘Joint’ out of Joint and Several Liability

Taking the ‘Joint’ out of Joint and Several Liability

Joint and several liability is a theory of recovery that permits the plaintiff to recover damages from multiple defendants collectively, or from each defendant individually. California law allows a plaintiff to sue multiple defendants, obtain judgments against all, but recover 100 percent of the damages from any single defendant of their choosing, even if that defendant is only 1 percent responsible for the damages.

Joint and several liability is a concept created by California case law. The rationale of the courts was to ensure that a seriously injured plaintiff was able to recover damages in the event that one or more of the defendants was uninsured and/or insolvent. The courts recognized that if a severely injured plaintiff is unsuccessful in recovering damages against a defendant because that defendant is uninsured or insolvent, then the cost of caring for that injured plaintiff will fall on society as a whole. On the other hand, the courts reasoned that the corporations and public entities who are potential defendants can protect themselves through insurance. Given the choice of requiring an injured plaintiff to be financially cared for by society or by insurance purchased by potential defendants, the courts chose the insurance option and adopted the concept of joint and several liability.

California Proposition 51 was adopted June 3, 1986, and is codified as Civil Code section 1431.2. Proposition 51 modified joint and several liability by dividing the categories of damages available to a successful plaintiff into two categories: economic damages and non-economic damages.

Economic damages include medical expenses and lost earnings. Proposition 51 states that a defendant found even one percent liable is jointly and severally liable for 100% of all economic damages. Non-economic damages include subjective damages for pain and suffering. Proposition 51 provides that the liability of a defendant, found only partly liable to a plaintiff, shall be limited to that defendant’s percentage of liability with regard to non-economic damages.

Various reform groups support replacing the rule of joint and several liability with the rule of proportionate liability. In a proportionately liability system, each co-defendant is proportionately liable for the plaintiff’s harm. They argue that joint and several liability leads to lawyers searching for "deep pockets" to sue (in the expectation that they will settle rather than risk trial), even though those defendants may only be remotely related to an incident.

The following case demonstrates the impact that the rule of joint and several liability has on the California JPIA membership:

Daniel/Neria v. City of Dana Point

Two women jogging in a bike lane were hit by a serial drunk driver who fled the scene. The two women are in a quadriplegic state and require 24-hour care. The combined cost the economic damages was estimated to exceed $50 million. The driver has no assets and is not financially responsible.

While the driver was primarily at fault for the accident, there was exposure to the City. If a jury were to have found the City partially at fault, joint and several would impose upon the City 100% responsibility for all of the economic damages, plus a proportionate share of the non-economic damages equal to the City’s percentage of fault. A settlement was concluded in the amount of $50 million to protect the City from an excess judgment.

Executive Director Jon Shull and Authority defense attorney Scott Grossberg served as panelists during an April 2 policy issue discussion of the League of California Cities’ Administrative Services Policy Committee. The discussion, entitled “Taking the ‘Joint’ out of Joint and Several Liability,” educated the Committee on the realities of joint and several liability and offered suggestions intended to reduce the fiscal impact to California cities. The response from the Administrative Services Policy Committee was encouraging.

California JPIA staff will continue its efforts leading to reform of California law as it relates to the rule of joint and several liability and will keep the membership informed of its progress.