Joint and several liability

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Where two or more persons are liable in respect of the same liability, in most common law legal systems they may either be:

Contents

Joint liability

If parties have joint liability, then they are each liable up to the full amount of the relevant obligation. So if a married couple takes a loan from a bank, the loan agreement will normally provide that they are to be "jointly liable" for the full amount. If one party dies, disappears, or is declared bankrupt, the other individual remains fully liable. Accordingly, the bank may sue all living co-promisors for the full amount.

However, in suing, the creditor has only one cause of action; i.e., the creditor can sue for each debt only once. If, for example, there are three partners, and the creditor sues all of them for the outstanding loan amount and one of them pays the liability, the creditor cannot recover further amounts from the partners who did not contribute to the liability. [2]

Several liability

The converse is several or proportionate liability, where the parties are liable for only their respective obligations. [3] A common example of several liability is in syndicated loan agreements, which will normally provide that each bank is severally liable for its own part of the loan. If one bank fails to advance its agreed part of the loan to the borrower, then the borrower can sue only that bank, and the other banks in the syndicate have no liability.

Joint and several liability

Under joint and several liability or all sums, a claimant may pursue an obligation against any one party as if they were jointly liable and it becomes the responsibility of the defendants to sort out their respective proportions of liability and payment. [3] This means that if the claimant pursues one defendant and receives payment, that defendant must then pursue the other obligors for a contribution to their share of the liability.

Joint and several liability is most relevant in tort claims, whereby a plaintiff may recover all the damages from any of the defendants regardless of their individual share of the liability. The rule is often applied in negligence cases, though it is sometimes invoked in other areas of law.

In the United States, 46 of the 50 states have a rule of joint and several liability, although in response to tort reform efforts, some have limited the applicability of the rule. About two dozen have reformed the rule, with several (Alaska, Arizona, Kansas, Utah, Vermont, Oklahoma, and Wyoming) abolishing it. In some instances it is abolished except where the defendants "act in concert". [4]

Variations

Some jurisdictions in the USA have imposed limits on joint and several liability, but without completely abolishing that doctrine. For example,

Examples

If Ann is struck by a car driven by Bob, who was served alcohol in Charlotte's bar (and the state has dramshop laws), then both Bob and Charlotte's bar may be held jointly liable for Ann's injuries. If the jury determines Ann should be awarded $10 million and that Bob was 90% at fault and Charlotte's bar 10% at fault:

Joint and several liability can make a defendant liable for the full amount of damages suffered by a plaintiff even if that defendant bears only slight fault for the injury. For example, if a child is injured due to the negligence of a crossing guard employed by a school district, and a court finds the crossing guard to be 99% at fault for the child's injury and the school district to be only 1% at fault, the school district would be liable to pay 100% of the damages. In contrast, under several liability, if the crossing guard was unable to pay money toward the judgment the most that the injured child could recover would be 1% of the judgment from the school district.

Arguments for and against joint and several liability

Joint and several liability is premised on the theory that the defendants are in the best position to apportion damages amongst themselves. Once liability has been established and damages awarded, the defendants are free to litigate amongst themselves to better divide liability. The plaintiff no longer needs to be involved in the litigation and can avoid the cost of continuing litigation. [3]

Where a financially wealthy party can be named or joined as a defendant, a plaintiff has a greater chance of recovering damages than when the defendants have very limited economic resources or are financially insolvent, or "judgment proof". Opponents of the principle of joint and several liability argue that its use is unfair to many defendants. [3]

For example, where an uninsured drunk driver causes an accident that results in injury, the plaintiff may sue an additional defendant, along with the drunk driver, such as suing the state highway department alleging that a highway defect contributed to the accident, hoping that the additional defendant will be found partly responsible.

Microfinance

In trying to achieve its aim of alleviating poverty, microfinance often lends to group of poor, with each member of the group jointly liable. That means that each member is responsible for ensuring that all the other members of the group repay too. If one member fails to repay, the members of the group are also held in default. Joint liability solves the information and enforcement problems associated with credit markets by encouraging screening, monitoring, costly state verification, and contract enforcement. [8] [9] [10]

See also

Related Research Articles

At common law, damages are a remedy in the form of a monetary award to be paid to a claimant as compensation for loss or injury. To warrant the award, the claimant must show that a breach of duty has caused foreseeable loss. To be recognised at law, the loss must involve damage to property, or mental or physical injury; pure economic loss is rarely recognised for the award of damages.

Negligence is a failure to exercise appropriate and/or ethical ruled care expected to be exercised amongst specified circumstances. The area of tort law known as negligence involves harm caused by failing to act as a form of carelessness possibly with extenuating circumstances. The core concept of negligence is that people should exercise reasonable care in their actions, by taking account of the potential harm that they might foreseeably cause to other people or property.

A tort is a civil wrong that causes a claimant to suffer loss or harm, resulting in legal liability for the person who commits the tortious act. Tort law can be contrasted with criminal law, which deals with criminal wrongs that are punishable by the state. While criminal law aims to punish individuals who commit crimes, tort law aims to compensate individuals who suffer harm as a result of the actions of others. Some wrongful acts, such as assault and battery, can result in both a civil lawsuit and a criminal prosecution in countries where the civil and criminal legal systems are separate. Tort law may also be contrasted with contract law, which provides civil remedies after breach of a duty that arises from a contract. Obligations in both tort and criminal law are more fundamental and are imposed regardless of whether the parties have a contract.

In criminal and civil law, strict liability is a standard of liability under which a person is legally responsible for the consequences flowing from an activity even in the absence of fault or criminal intent on the part of the defendant.

This article addresses torts in United States law. As such, it covers primarily common law. Moreover, it provides general rules, as individual states all have separate civil codes. There are three general categories of torts: intentional torts, negligence, and strict liability torts.

In some common law jurisdictions, contributory negligence is a defense to a tort claim based on negligence. If it is available, the defense completely bars plaintiffs from any recovery if they contribute to their own injury through their own negligence.

<span class="mw-page-title-main">English tort law</span> Branch of English law concerning civil wrongs

English tort law concerns the compensation for harm to people's rights to health and safety, a clean environment, property, their economic interests, or their reputations. A "tort" is a wrong in civil law, rather than criminal law, that usually requires a payment of money to make up for damage that is caused. Alongside contracts and unjust enrichment, tort law is usually seen as forming one of the three main pillars of the law of obligations.

Comparative negligence, called non-absolute contributory negligence outside the United States, is a partial legal defense that reduces the amount of damages that a plaintiff can recover in a negligence-based claim, based upon the degree to which the plaintiff's own negligence contributed to cause the injury. When the defense is asserted, the factfinder, usually a jury, must decide the degree to which the plaintiff's negligence and the combined negligence of all other relevant actors all contributed to cause the plaintiff's damages. It is a modification of the doctrine of contributory negligence that disallows any recovery by a plaintiff whose negligence contributed even minimally to causing the damages.

An intentional tort is a category of torts that describes a civil wrong resulting from an intentional act on the part of the tortfeasor. The term negligence, on the other hand, pertains to a tort that simply results from the failure of the tortfeasor to take sufficient care in fulfilling a duty owed, while strict liability torts refers to situations where a party is liable for injuries no matter what precautions were taken.

<span class="mw-page-title-main">Personal injury</span> Legal term for an injury to a person

Personal injury is a legal term for an injury to the body, mind, or emotions, as opposed to an injury to property. In common law jurisdictions the term is most commonly used to refer to a type of tort lawsuit in which the person bringing the suit has suffered harm to their body or mind. Personal injury lawsuits are filed against the person or entity that caused the harm through negligence, gross negligence, reckless conduct, or intentional misconduct, and in some cases on the basis of strict liability. Different jurisdictions describe the damages in different ways, but damages typically include the injured person's medical bills, pain and suffering, and diminished quality of life.

Comparative responsibility is a doctrine of tort law that compares the fault of each party in a lawsuit for a single injury. Comparative responsibility may apply to intentional torts as well as negligence and encompasses the doctrine of comparative negligence.

<span class="mw-page-title-main">Canadian tort law</span> Aspect of Canadian law

Canadian tort law is composed of two parallel systems: a common law framework outside Québec and a civil law framework within Québec. Outside Québec, Canadian tort law originally derives from that of England and Wales but has developed distinctly since Canadian Confederation in 1867 and has been influenced by jurisprudence in other common law jurisdictions. Meanwhile, while private law as a whole in Québec was originally derived from that which existed in France at the time of Québec's annexation into the British Empire, it was overhauled and codified first in the Civil Code of Lower Canada and later in the current Civil Code of Quebec, which codifies most elements of tort law as part of its provisions on the broader law of obligations. As most aspects of tort law in Canada are the subject of provincial jurisdiction under the Canadian Constitution, tort law varies even between the country's common law provinces and territories.

A contribution claim is a claim brought by one or more defendants to a lawsuit for money damages brought by a plaintiff. A contribution claim asserts the party is entitled to "contribution" from a third party for any money damages awarded to the plaintiff.

<span class="mw-page-title-main">Tort reform</span> Legal reforms aimed at reducing tort litigation

Tort reform consists of changes in the civil justice system in common law countries that aim to reduce the ability of plaintiffs to bring tort litigation or to reduce damages they can receive. Such changes are generally justified under the grounds that litigation is an inefficient means to compensate plaintiffs; that tort law permits frivolous or otherwise undesirable litigation to crowd the court system; or that the fear of litigation can serve to curtail innovation, raise the cost of consumer goods or insurance premiums for suppliers of services, and increase legal costs for businesses. Tort reform has primarily been prominent in common law jurisdictions, where criticism of judge-made rules regarding tort actions manifests in calls for statutory reform by the legislature.

Summers v. Tice, 33 Cal.2d 80, 199 P.2d 1 (1948), is a seminal California Supreme Court tort law decision relating to the issue of liability where a plaintiff cannot identify with specificity which among multiple defendants caused his harm. The case established the doctrine of alternative liability and has had its greatest influence in the area of product liability in American jurisprudence.

<i>Barker v Corus (UK) plc</i> House of Lords decision

Barker v Corus (UK) plc [2006] UKHL 20 is a notable House of Lords decision in the area of industrial liability in English tort law, which deals with the area of causation. In this case, the House of Lords reconsidered its ruling in the earlier landmark case Fairchild v Glenhaven Funeral Services Ltd concerning the liability of multiple tortfeasors.

The following outline is provided as an overview of and introduction to tort law in common law jurisdictions:

Chase v. Curtis, 113 U.S. 452 (1885), was a suit brought under the provisions of §12 of the Act of the Legislature of New York of February 17, 1848, as amended June 7, 1875, where trustees of corporations formed for manufacturing, mining, mechanical, or chemical purposes are made liable for debts of the company on failure to file the reports of capital and of debts required by that section, is penal in its character, and must be construed with strictness as against those sought to be subjected to its liabilities. Suit was brought to recover from the trustees of such a corporation the amount of a judgment against the corporation, the judgment roll is not competent evidence to establish a debt due from the corporation to the plaintiff.

A claim in tort against a corporation formed under that act, as amended, is not a debt of the company for which the trustees may become liable jointly and severally under the provisions of the Act. In a proceeding to enforce a liability created by a state statute, the courts of the United States give to a judgment of a state court the same effect, either as evidence or as cause of action, which is given to it in like proceedings in the courts of the state whose laws are invoked in the enforcement.

The complaint in this action, after alleging that the plaintiff in error was a citizen of Pennsylvania, and the defendants citizens of New York, proceeded as follows:

"Wherefore the plaintiffs demand judgment against the above-named defendants in the sum of $40,828.97, with interest on $40,500.00 from the 30th day of July, 1874, and on $328.97 from the 3d day of October, 1874, besides the costs and disbursements of this action."

To this complaint the defendants severally demurred on the ground that it did not state facts sufficient to constitute a cause of action. The demurrer was sustained and judgment rendered in favor of the defendants dismissing the complaint, to reverse which this writ of error is prosecuted.

The statute on which the action is founded is as follows:

"SECTION 1. The twelfth section of the 'Act to authorize the formation of corporations for manufacturing, mining, mechanical, or chemical purposes,' passed February 17, 1848, as said section was amended by chapter 657 of the Laws of 1871, is hereby further amended, so that section 12 shall read as follows:"

"§ 12. Every such company shall, within twenty days from the first day of January, if a year from the time of the filing of the certificate of incorporation shall then have expired, and if so long a time shall not have expired, then within twenty days from the first day of January in each year after the expiration of a year from the time of filing such certificate, make a report, which shall be published in some newspaper published in the town, city, or village, or, if there be no newspaper published in said town, city, or village, then in some newspaper published nearest the place where the business of the company is carried on, which shall state the amount of capital, and of the proportion actually paid in, and the amount of its existing debts, which report shall be signed by the president and a majority of the trustees, and shall be verified by the oath of the president or secretary of said company, and filed in the office of the clerk of the county where the business of the company shall be carried on, and if any of said companies shall fail so to do, all the trustees of the company shall be jointly and severally liable for all the debts of the company then existing, and for all that shall be contracted before such report shall be made. But whenever under this section a judgment shall be recovered against a trustee severally, all the trustees of the company shall contribute a ratable share of the amount paid by such trustee on such judgment, and such trustee shall have a right of action against his co-trustees, jointly or severally, to recover from them their proportion of the amount so paid on such judgment, provided that nothing in this act contained shall affect any action now pending.

It is finally insisted that a judgment against the corporation, although founded upon a tort, becomes ipso facto a debt by contract, being a contract of record or a specialty in the nature of a contract. But we have already seen that the settled course of decision in the New York Court of Appeals rejects the judgment against the corporation as either evidence or ground of liability against the trustees, and founds the latter upon the obligation of the corporation on which the judgment itself rests. And it was decided by this Court in the case of Louisiana v. New Orleans, 109 U. S. 285, that a liability for a tort, created by statute, although reduced to judgment by a recovery for the damages suffered, did not thereby become a debt by contract in the sense of the Constitution of the United States forbidding state legislation impairing its obligation, for the reason that the term 'contract' is used in the Constitution in its ordinary sense as signifying the agreement of two or more minds, for considerations proceeding from one to the other, to do or not to do certain acts. Mutual assent to its terms is of its very essence."

The same definition applies in the present instance, and excludes the liability of the defendants, as trustees of the corporation, for its torts, although reduced to judgment.

The court found no error in the judgment of the circuit court, and it was accordingly affirmed.

<i>Athans v Canadian Adventure Camps Ltd</i> Canadian legal case

Athans v Canadian Adventure Camps Ltd, 1977 CanLII 1255, 17 OR (2d) 425, 80 DLR (3d) 583, is an appropriation of personality case in Canada, which recognized the right of exclusive right to market one's personality.

The civil liability of a recreational diver may include a duty of care to another diver during a dive. Breach of this duty that is a proximate cause of injury or loss to the other diver may lead to civil litigation for damages in compensation for the injury or loss suffered.

References

  1. 1 2 Prosser, William J. (1936). "Joint Torts and Several Liablity". California Law Review. 25 (4): 413–443. doi:10.2307/3476762. JSTOR   3476762 . Retrieved 20 September 2017.
  2. ↑ Gottlieb, Glenn M. (July 1977). "Res Judicata and Collateral Estoppel in the Law of Partnership". California Law Review. 65 (4): 863–885. doi:10.2307/3480047. JSTOR   3480047 . Retrieved 20 September 2017.
  3. 1 2 3 4 "Joint and Several and Proportionate Liability". Law Commission. Government of New Zealand. Retrieved 20 September 2017.
  4. ↑ The Rule of Joint and Several Liability. Heartland Institute.
  5. 1 2 "Ohio Revised Code, Sec. 2307.22. Joint and several tort liability". LAWriter. Lawriter LLC. Retrieved 20 September 2017.
  6. ↑ "California Civil Code, Sec. 1431.2. Several Liability for Non-economic Damages". California Legislative Information. California State Legislature. Retrieved 20 September 2017.
  7. ↑ "Hawaii Revised Statutes, Chapter 663, Tort Actions". Hawaii State Legislature. Retrieved 20 September 2017.
  8. ↑ Armendariz de Aghion, Jonathan Morduch (2007). The economics of microfinance. The MIT Press. ISBN   978-0-262-51201-5.
  9. ↑ Maitreesh Ghatak, Timothy Guinnane (1999). "The economics of lending with joint liability: theory and practice". Journal of Development Economics . Vol. 60, no. 1. Elsevier. pp. 195–228. ISBN   0-262-51201-7.
  10. ↑ Ashok Rai, Tomas Sjostrom (2004). "Is Grameen lending efficient? Repayment incentives and insurance in village economies". Review of Economic Studies . Vol. 71, no. 1. John Wiley & Sons. pp. 217–234.
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