If you have sued more than one party in your personal injury case, you’re probably wondering whether you can settle with one of them and still proceed with the lawsuit against the other(s). Such an arrangement could let you have your cake and eat it too — you get money now while still preserving your right to go to trial. The short answer to this question is “yes”, there is no legal impediment to you settling with just one defendant. Of course, this being a legal issue, the short answer doesn’t begin to address the complexities involved in such an arrangement.
There are both practical and strategic reasons why settling with just one defendant may not be possible, or even wise. Both you and the settling defendant will have risks to evaluate before making such a decision, which will depend not only on the relationship between the various defendants, but also the laws affecting damages in your state.
How Apportionment of Damages Affects Your Ability to Settle With Just One Defendant
State laws take one of three forms when it comes to dividing damages among multiple defendants:
- Joint and Several Liability – Each defendant is individually responsible for all damages caused by all defendants (but not for any damages caused by your comparative negligence). For example, if you suffered $100,000.00 in damages and there are three defendants, each defendant is liable for up to $100,000.00 regardless of their individual percentage of fault. If you were 20% at fault for your own injuries, each defendant would be liable for up $80,000.00. Note that your total recovery cannot exceed the total amount of damages attributed to all defendants (no double or triple-dipping just because there are multiple defendants). Under joint and several liability, a defendant who is found to be 1% at fault for your injuries may have to pay 80% of your damages because the other defendants may not be capable of paying their share (due to inadequate insurance).
- Pure Apportionment – Each defendant is only liable for the amount of your damages equal to its percentage of fault. If your damages equal $100,000.00 and one defendant is found to be 1% at fault, that defendant would only be liable for $1,000.00. A defendant who is 50% at fault would only be liable for $50,000.00, etc.
- Hybrid Approach – The hybrid approach is some combination of joint and several liability and pure apportionment. For example, your economic damages (wage loss, medical bills, etc.) may be joint and several, but your non-economic damages (pain and suffering) may be purely apportioned. This approach can get pretty complicated — for example, in Florida (which is now a pure apportionment state) the law used to be a hybrid approach as described above, with the proviso that economic damages were only joint and several among those defendants whose percentage of fault exceeded that of the plaintiff (yeah, it can get really complicated).
Luckily, your lawyer will know what approach to damages is taken in your state, and you generally won’t need to have a thorough understanding of these concepts. I’ve given this brief explanation of how fault can be apportioned because it will affect your ability to settle with one of multiple defendants.
Settling With One Defendant in “Joint and Several” States
In states that still employ joint and several liability, there is very little risk to you in settling with just one defendant. Because the other defendants will be still be liable for the full amount of your damages, settling with just one will not affect your ability to make a full recovery (assuming the other defendants have adequate insurance).
Unfortunately, defendants in these states may be less likely to settle individually because they may face claims from other defendants for contribution. A contribution claim allows a defendant that pays more than its fair share of damages to collect the overpayment from other defendants that paid less than their fair share. So, while you need not worry about the percentage of fault allocated to each defendant (as they are all responsible for the full amount of your damages) the defendants worry about it because it affects their ability to sue each other should you recover a disproportionate amount from one of them.
Often, even a defendant who settled with you will still be liable to a co-defendant under a contribution claim if that defendant’s settlement amount did not equal or exceed his percentage of liability. So, if one defendant manages to settle with you for less than his fair share of the damages (as later determined by a jury), he may have to pay the remainder of that share to the other defendants. This creates a pretty strong disincentive for an individual defendant to settle, for even if it gets a bargain from you, that bargain may vanish when the other defendants sue it to recover the rest of its share of the damages.
Settling With One Defendant in “Pure Apportionment” States
In pure apportionment states, defendants will be much more willing to settle individually, as there is no risk of a contribution claim from the other defendants (due to the fact that each defendant is only liable for its own percentage of fault). Naturally, this means that the risk of settling with one defendant shifts entirely to you. If you settle with a defendant for less than its percentage of fault, you will be unable to make a full recovery. Of course, if you settle for more than its fair share of the fault, you get something of a windfall.
In pure apportionment states, defendants who settle before trial will still appear on the verdict form, and a jury will still be able to apportion fault to them. This is what’s known as an “empty chair” — the other defendants get to point to the empty chair where the settling defendant should be and urge the jury to apportion as much fault to that defendant as possible.
As the settled defendant has no interest in defending itself at trial (because you can’t collect anything more from it), your lawyer will have to shift fault not only away from you, but also away from the settled defendant. So, by settling with just one defendant, you in essence lose a potential ally in the courtroom — the settled defendant’s lawyer — who could help place the blame on the other defendants. This could be a wash, however, as he’d likely try to shift some of the fault to you as well, and/or try to minimize your damages.
Settling With One Defendant in “Hybrid” States
In hybrid states, you get the best and worst of both worlds when it comes to settling with one defendant. Each side bears the risks of settlement stated above as to that portion of damages which is joint and several and that which is apportioned. This may make it easier to settle with an individual defendant, as both you and he have “skin in the game” (risk).
Settling With an Individual Defendant When One Defendant is Vicariously Liable for Another
In many cases involving multiple defendants, one of the defendants will be vicariously liable for another. Vicariously liability is a complicated legal concept, but it basically means that one defendant is liable not because of its own actions, but because of the actions of another party. The most common example is an employer being held liable for the negligence of its employee while that employee was “on the job”. The employer need not have been negligent in hiring, training or supervising its employee. It is held liable purely as a matter of public policy.
In cases involving a vicariously liable defendant, both the “active tortfeasor” (e.g., the employee) and the “passive tortfeasor” (e.g., the employer) will be jointly and severally liable for your damages, regardless of your state’s usual approach to damages (it’s impossible to apportion damages between the two, as they are both liable for the exact same conduct). Most often, they will both be covered under the same insurance policy and they will share a defense attorney. This makes settling with just one defendant nearly impossible, as the insurer will not want to settle for only one of its insureds.
Further complicating matters, many states will not allow a plaintiff to proceed with a claim against a vicariously liable defendant if the plaintiff settled with the “active tortfeasor.” So, there is a huge danger in trying to settle with an “active tortfeasor” for less than the full value of your claim. If you succeed, you may find your claim against the passive tortfeasor barred as a matter of law.
Should You Settle With Just One Defendant?
Now that you know the basic risks involved in settling with just one defendant, should you ever do it? I can’t answer that for you. Any settlement involves the risk that you will not be fully compensated. However, settling with just one defendant and going to trial against the others presents an added complication — you will know whether your settlement was a good idea or not. If you can live with that possibility, it may be worth it to secure some “sure money” early in your lawsuit and lessen your risks at trial.
Hopefully, after reading this article, you will feel more comfortable discussing the various risks of settling with just one defendant with your lawyer. Trust me when I tell you that I have not covered all of those risks, just the most common ones. There are too many possible combinations of “related defendants” and various state laws to give them all a thorough discussion. Your lawyer will have to fill in the details for you. Be warned — it may get pretty complicated.