Business, Legal & Accounting Glossary
Under joint and several liability a plaintiff may recover full damages from any defendant in a case, regardless of what percentage of liability a defendant may owe. If a defendant is found to be even 1% responsible under joint and several liability that defendant can be required to pay 100% of any damages. Supporters of joint and several liability contend that the laws protect a victim from being under compensated if one defendant cannot pay his or her share of a settlement. Opponents of joint and several liability point to the unfairness of a defendant being found 1% responsible yet being forced to pay 100% of an award. Joint and several liability encourages plaintiffs to look for defendants with “deep pockets.” Joint and several liability primarily applies in tort cases and joint and several liability is valid in 46 states.
Joint and Several liability allows for two or more parties to be “jointly and severally liable for a tortious act.” This process allows for the plaintiff to collect the full damages from an injury case from any of the parties involved. Inequities with this system exist when relatively blameless defendants are required to pay the financial burdens if one of the other defendants is insolvent.
If there are three business partners who have entered into a contract for which there is joint and several liability and the contract is subsequently breached, one of them may be sued and may end up paying all damages. It is then that partner’s responsibility to pursue the other partners for their share of the liability.
Critics of this system argue joint and several liability encourages plaintiffs to unfairly target defendants who are known or perceived to be insured or solvent, and these solvent defendants may be forced to fully compensate a plaintiff far beyond that which is owed by them in the event of a co-defendant’s insolvency. Critics are also concerned about the rising costs of litigation, insurance and damage awards which are allowed under the joint and several liability system.
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This glossary post was last updated: 1st April, 2020