Commonwealth tackles 'joint and several liability' reform

After two failed attempts at so-called “joint and several liability” reform, Pennsylvania lawmakers are once again focusing on how damages are awarded in civil litigation.

There are currently three like bills pending in the state House and Senate awaiting action that, if passed, would change the way civil judgments are distributed.

Under current law, plaintiffs in Pennsylvania are entitled to what is known as joint and several damages in civil cases, but under proposed legislative changes, monetary damages would be several only, in which multiple defendants in a suit would only be liable for their respective proportionate share of a verdict.

The bills currently under consideration are H.B. 1, sponsored by state Rep. Curt Schroder, a Chester County Republican; S.B. 2, sponsored by state Sen. Jake Corman, (R-34^th Dist.), and S.B. 500, sponsored by state Sen. Stewart Greenleaf, a Republican from suburban Philadelphia.

The bills, which are nearly identical, and essentially amend Title 42 of Pennsylvania’s Consolidated Statutes with regard to comparative negligence, remain stalled in committee.

Pennsylvania legislators tried their hand at joint and several liability reform back in 2002, but the change in law was deemed unconstitutional by Commonwealth Court, which ruled that the law had been improperly appended to another bill.

The state constitution prohibits unrelated issues to be contained within the same bill.

Reform was again tackled by the General Assembly in 2006, and it appeared as though change would take shape, that is until former Gov. Ed Rendell vetoed reform legislation, according to Gene Barr, vice president of government and public affairs for the Pennsylvania Chamber of Business and Industry, which supports some type of joint and several liability reform.

“Making our legal climate more competitive, more fair, more balanced has been a high priority of the chamber for a long time,” Barr said by phone.

Barr said 41 states have passed liability reform in some fashion; in this region, Pennsylvania and Delaware remain two holdouts.

Three or four states have what is termed “contributory negligence,” Barr said, which is when plaintiffs are forbidden to collect any damages if they are found liable, in any way, for their respective conditions.

In addition to pro-business groups, attorneys specializing in civil defense work also see the change in Pennsylvania law as much needed. Under current statute, multiple defendants listed together in a civil case are responsible for paying out monetary damages awarded by a jury regardless of level of liability.

For example, if there are two defendants in a case, and one is found to be just 1 percent liable for damages while the other is found to be 99 percent liable, but the one that has a higher proportion of liability, cannot, for whatever reason, pay up, the defendant who is found less liable is then required to pony up the total damages.

Christopher Hoare, a civil defense attorney who practices law in Pennsylvania, New Jersey and New York, said the Keystone State is the only one stuck in the stone age in this regard.

“I routinely hear feedback from my clients about the cost to business proposed by PA’s joint and several liability law,” Hoare, of the firm Capehart Scatchard, wrote in an email message. “I would favor a reform of the joint and several litigation rules in Pennsylvania to bring the state in line with most other states. The cost for this reform would be negligible and the benefits to the state’s economy would be enormous.”

With the situation as it is now, Hoare said, insurance companies in Pennsylvania pass along real effects of the state’s law in the form of higher premiums to customers.

“Self-insured businesses, which routinely find themselves involved in multi-defendant litigation, must worry about the catastrophic impact that even a single lawsuit poses to the future viability,” Hoare wrote.

The way the law is written now, if the defendant found to be 1 percent liable, for example, has to bear all of the damages because the defendant that is 99 percent liable can’t pay or is bankrupt, the only way for the first defendant to recoup costs is to sue the second defendant, Hoare said.

To Rob Foster, a lawyer with Philadelphia firm Reger, Rizzo & Darnall who spent 10 years as a plaintiff’s attorney, that might just be the answer.

“That one percenter who pays everything can collect from the other person if that other person has the money,” Foster said. “The question is always who bears the loss, the injured party or the negligent tortfeasor who has assets.”

Foster, who stressed his firm takes no official position on the legislative reform currently in the works, said he has personally “always been a proponent of eliminating the one percent, the two percent, the ten percent concept,” but the question becomes if two defendants are found to be liable in some shape or form, “why does one get off the hook because the other declares bankruptcy.”

“There are some cases where it’s going to help, there are some cases where it’s going to hurt,” Foster said of the joint and several liability reform in the works.

Barr, of the business chamber, said Pennsylvania’s current state of affairs is a major reason defendants, especially big companies like hospitals, often settle out of court, since they amount they may have to pay after a trial is so uncertain.

H.B. 1 and S.B. 2 are nearly identical, Barr said, while S.B. 500, the one authored by Sen. Greenleaf, varies slightly in that it would only provide relief to multiple defendants when the plaintiff is found to be more at fault than any given defendant individually.

For that reason, Barr said S.B. 500 doesn’t go far enough, and the chamber instead supports either of the other two bills.

Sen. Greenleaf, the Republican from Montgomery County, who is also a lawyer, held hearings on joint and several liability reform in April in Harrisburg and in late May in Philadelphia. Barr attended the May session.

Greg Warner, a spokesman for Greenleaf, said the senator introduced his bill, despite the other two bills already having been unveiled, because he “was kind of looking for a compromise.”

Warner said the senator hopes to wrap up hearings and informational sessions by June, with a desire to decide what bill will move forward.

Greenleaf, of Montgomery County, chairs the Senate Judiciary Committee.