If you are a business selling products in the U.S., nothing exemplifies better how state laws can impact your business more than Joint and Several Liability.
We know from my previous blog, “Why Naming Multiple Defendants In A Lawsuit Is Common Practice”, that it is typical for the plaintiff’s attorney to name as many defendants as possible, when there is a product liability lawsuit. However, what may surprise you is that even if you have only marginal ties to the product that is responsible for the product liability lawsuit you could potentially be responsible for paying the lions share of the damages or even paying all of it.
How can this be? This is not fare! What kind of law would allow this to happen?
Joint and Several Liability was created to make sure the injured party or plaintiff was able to be made whole, even if one or more of the defendants are unable pay their share of the product liability monetary damages. Many of the critics of Joint and Several Liability refer to this approach as the “deep pocket” rule because of the potential of a product liability lawsuit becoming a search for the “deepest pockets”.
Over time tort reform efforts have led to many states limiting the applicability of pure joint and several liability. Currently states are using one of the following three approaches when distributing financial liability of defendants:
- Pure Joint/Several Liability – Each defendant in a product liability lawsuit is responsible for the entire amount of the damages, regardless of amount responsibility or liability each defendant had. Currently, 16% of states use Pure Joint and Several Liability, including my fine state, South Carolina.
- Pure Several Liability – Each defandent is only liable for their assigned portion of the damages, based on their percentage of responsibility or liability. For example, manufacture and designer of a faulty product would have a higher percentage of responsibility or liability than the retail distributor of the product. Currently, 28% of the states use Pure Several Liability.
- Modified Joint/Several Liability – This is somewhere between Pure Joint/Several Liability and Pure Several Liability and can vary greatly state to state. Currently, 56% of the states use Modified Joint and Several Liability.
Overall, the point of this blog is that life is not fare and if you are a business that distributes products in all or most of the 50 states, the amount of monetary damages your business may be responsible for paying could largely depend on the state in which the product liability case is being tried.
If you want to know which states use Pure Joint and Several Liability, Pure Several Liability or the Modified Joint and Several Liability, simply click on this chart.