joint and several liability

Definition of joint and several liability

Further reading

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

• jointly liable, or
• severally liable, or
• jointly and severally liable.

Joint liability

If parties have joint liability, then they are each liable up to the full amount of the relevant obligation. So if a husband and wife take 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 remains fully liable. Accordingly, the bank must sue all living co-promisors, for the full amount. However, in suing, the creditor has only one course 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.

Several liability

The converse is several or proportionate liability, where the parties are liable for only their respective obligations. 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. 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.

Examples

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

• Under proportionate liability, Bob would have to pay $9M and Charlotte would have to pay $1M. If Bob does not have any money, Ann only gets the $1M from Charlotte.
• Under joint and several liability, Ann may recover the full damages from either of the defendants. If Ann sued Charlotte alone, Charlotte would have to pay the full $10M despite only being at fault for $1M. Charlotte would then either have to join Bob as defendant in Ann's suit against her or would have to pursue a separate action against Bob for $9M. Regardless of the outcome of that action, Charlotte would remain liable to Ann for the full $10M.

In a Wisconsin case (Zimmer v. City of Milwaukee), an uninsured driver of a car with faulty brakes hit and killed a six year old boy at a school crossing. The school crossing had a stop sign and a crossing guard. The plaintiff lawyer argued that the accident might have been avoided if the crossing guard, instead of signalling the car to stop, had attempted to get the child out of the car's path. The city (the crossing guard's employer) was found to be one percent at fault. Under proportionate liability (sometimes also called comparative negligence), the city would only have been liable for their one percent of the damages. However because the driver was uninsured (and thus insolvent), the city had to pay 100% of the damages.

In a Florida case, involving an injury on the Grand Prix bumper-car ride at Walt Disney World, the jury found the plaintiff 14% responsible for her own injury, her then-fiance to be 85% responsible (he rammed his car into the back of hers) and the Disney Corporation to be only 1% liable for the injury. The court ordered Disney to pay 86% of the damages - its percentage plus the husband's percentage - because the husband was unable to pay his portion.