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Pennsylvania’s Fair Share Act: Practical Pointers for Litigators

June 1, 2014

By Michael A. Salvati, Esq. and David S. Wolf, Esq.*

Key Points:

  • Because of the two-year statute of limitations that applies to personal injury actions, the impact of the new Pennsylvania Fair Share Act is just starting to be felt.
  • In essence, the Fair Share Act changes the rules of joint and several liability.
  • The beneficial application of this Act should be strategically considered throughout the course of multi-defendant litigation.

 

On June 28, 2011, Pennsylvania Governor Thomas Corbett signed The Fair Share Act, 42 Pa.C.S.A. § 7102, into law, drastically changing the law of joint and several liability for any cause of action sounding in negligence that accrues after the date of enactment. Given the two-year statute of limitations that applies to personal injury actions in Pennsylvania, the impact of this new law is just starting to be felt. This article will briefly explain the importance of the Fair Share Act and suggest some ways to incorporate its provisions to advance the defense of our clients. It had been a challenge for insurers and the business community to gain passage of this Act, and it is now time to take advantage of its cost saving benefits.

Prior to the enactment of The Fair Share Act, the concept of unfettered joint and several liability meant that a defendant adjudicated any percentage liable for a plaintiff’s injuries would be responsible to pay the entire judgment, inclusive of the allocation of responsibility assessed against an uninsured or insolvent co-tortfeasor. This liability scheme inevitably spurred settlement, even from minimally culpable defendants, for fear of being saddled with a disproportionate payout.

The inequitable outcomes occasioned by joint and several liability prompted enactment of the Fair Share Act, which provides that, in most cases, a defendant will only be responsible to pay a portion of any judgment equal to the percentage of liability found against that defendant. If a defendant is found only 25 percent liable, then he or she only pays 25 percent of the judgment. Each tortfeasor pays only their “fair share.”

There are a number of important exceptions carved into the Act. The “old” joint and several liability still applies, and a tortfeasor will still be responsible to pay the entire judgment, regardless of percentage of liability, under the following theories of liability:

  • Intentional misrepresentation;
  • An intentional tort;
  • The release or threatened release of a hazardous substance under the Hazardous Sites Cleanup Act;
  • Serving alcohol to a visibly intoxicated patron under Section 497 of the Liquor Code.

 

However, the most noteworthy exception to the Fair Share Act is that a tortfeasor found 60 percent or more liable remains jointly and severally liable and exposed to pay the allocated portion of a co-tortfeasor with insufficient capacity to pay its share.

The application of the Fair Share Act requires that a defense attorney adjust strategies to take advantage of its benefits and minimize its pitfalls. Some practical litigation pointers follow.

Evaluating the complaint

We are all familiar with the “kitchen sink” complaint in which an ambitious plaintiff’s attorney includes every legal theory imaginable, alleging that a simple slip and fall or fender bender was the result of the “intentional, reckless, negligent or careless” actions of the defendant. Before the Fair Share Act, it was common to view these allegations as mere boilerplate verbiage and leave them unchallenged. However, because intentional conduct can lead to joint and several liability and greatly increase a defendant’s exposure, it is important to move to strike such allegations in the absence of factual support within the complaint.

Join early and often

It is important to join as many viable tortfeasors as possible and, optimally, within the plaintiff’s statute of limitations, so as to increase the possible pockets of liability. Obviously, the greater the number of potential tortfeasors, the less likely it is that any one defendant will be assessed 60 percent so as to trigger joint and several liability. It is more important than ever to know the joinder rules governed by Pa.R.C.P. 2252 and 2253.

As a brief refresher, an additional defendant may be joined as a matter of course within 60 days of service of the original pleading. After that time, a party must seek leave of the court, via a motion, to join another party and provide an explanation for the lateness and the substantive basis for the joinder. Further, the later the joinder, the greater the risk that the joined party will file preliminary objections challenging the timeliness of the joinder due to its prejudicial impact. The importance of early investigation and discovery is heightened to ensure that all potential tortfeasors are timely joined.

Evaluate your status in the case

If you represent a peripheral defendant, consider reaching out to plaintiff’s counsel to propose a voluntary dismissal. If strategically drafted affidavits, or the exchange of discovery, can convince an opposing attorney that your client is minimally culpable, you may be able to use the Fair Share Act to convince counsel that it is in their interests to dismiss your client. Under the Act, plaintiff attorneys will be motivated to limit their targets as trial approaches to ensure that one of the defendants is tagged for at least 60 percent.

If, on the other hand, you believe your client may bear a significant portion of the responsibility, focus your discovery weapons on a co-defendant. While it is common to present a united front among defendants, your strategy may now lean to be more proactive in developing a record of a co-defendant’s culpability. The goal is to shift enough blame so that your client’s share of the liability falls below 60 percent. The days of a united stand by all defendants could be a bygone strategy as parties jostle to avoid the 60 percent. Of course, the defendants may still agree to take a united stand at trial and defer apportionment to an agreed ADR forum. The old adage still holds, that is, only a plaintiff benefits if defendants are blaming each other before a jury.

Alternately, your client may become a target if it is the only solvent defendant, even if its liability is questionable. Be prepared for unconventional strategies from plaintiffs’ counsel as they focus their efforts on your client in an attempt to paint it as the one true cause of their client’s injury.

Be emboldened to try more cases

Whereas, before the implementation of the Fair Share Act, the slightest finding of liability could result in payment of 100 percent of the verdict, there now must generally be a finding of at least 60 percent negligence before this obligation is triggered. In a case where your client is minimally culpable, it may be a better option to see the case through to a verdict, as a finding of one percent liability is no longer a worrisome outcome. Further, we may see a change in the mindset of claims handlers who often unhappily settled in the face of minimal liability. With a 60 percent cushion, we may now see cases placed in “trial” strategies by carriers. Conversely, we may now see plaintiff attorneys willing to settle for numbers that reflect actual liability, instead of using joint and several liability as a scare tactic to extract disproportionate settlement dollars. This, in turn, could lead to an increase in joint tortfeasor settlements, in light of the fact that a plaintiff no longer has the benefit of joint and several liability.

*Michael and David work in our Philadelphia, Pennsylvania office. Michael, an associate, can be reached at 215.575.4552 or masalvati@mdwcg.com. David is a shareholder who can be reached at 215.575.3577 or dswolf@mdwcg.com.

 

Defense Digest, Vol. 20, No. 2, June 2014

Defense Digest is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2014 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.

Affiliated Attorney

Michael A. Salvati
Associate
(215) 575-4552
masalvati@mdwcg.com
David S. Wolf
Shareholder
(215) 575-3577
dswolf@mdwcg.com

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