On June 19, 2002, Pennsylvania Governor Mark Schweiker signed into law a bill which, in his words, represents “the most dramatic change in the Pennsylvania civil-justice system in decades.” Known as the “Fair Share Act,” the new law significantly reforms joint and several liability in Pennsylvania. In most cases with multiple defendants, each defendant will be liable to pay only its proportionate share of the judgment. This law is predicted to result in significant cost savings for Pennsylvania liability insurers and self-insureds.
“Joint tortfeasors” are two or more persons who either act together in committing a wrong or whose independent acts unite in causing a single injury. Prior to the Fair Share Act, each joint tortfeasor was liable to the plaintiff for the full amount of a judgment, regardless of the jury’s assessment of proportional fault. Thus if there were two joint tortfeasors, one which is adjudged 1% liable and the other 99% liable, the plaintiff could seek payment of the entire judgment from either party. A joint tortfeasor who paid more than its proportionate share of liability would have a right of contribution against a defendant failing to pay his proportionate share. While this scheme gave plaintiffs a full recovery, it created inequitable results among some defendant tortfeasors. It encouraged plaintiffs to sue well-insured, peripheral parties in hopes of tagging them with at least a small percentage of causal fault. Where the primary tortfeasors lacked enough assets or insurance coverage to pay their proportionate share, the well-insured minority tortfeasors were left holding the bag.
With few exceptions, the new law abandons the rule of joint and several liability. The new approach calls for “several liability,” whereby a defendant is only liable to pay its proportionate share of liability, and not the full amount of the judgment. Therefore, a defendant who is adjudged only 1% liable would be responsible to pay only 1% of the judgment, not the full amount. The new law is effective for all causes of action accruing after August 18, 2002.
The new law does not apply to intentional torts, intentional misrepresentation, hazard substances release, or liability of tavern owners under “dram shop liability”. The most notable exception, however, is that if a defendant is held liable for 60% or more of total apportioned liability, that defendant remains liable to pay the full amount of the judgment, just as under the old law. Also, the general abolition of joint and several liability does not affect the law of agency under which an employer, principal, or “ostensible principal” can be held liable for the acts of its employees, agents, or “ostensible agents”.
Still, the Fair Share Act represents a significant step toward meaningful tort reform in Pennsylvania. With limited exceptions, no longer will minimally-liable defendants be required to fund the full amount of a judgment. Rather, most defendants will only be liable to pay judgments in proportion to their adjudged liability. Indeed, it is the most dramatic change in the Pennsylvania civil-justice system in decades.