Where two or more persons are

liable In law, liable means "responsible or answerable in law; legally obligated". Legal liability concerns both civil law and criminal law and can arise from various areas of law, such as contracts, torts, taxes, or fines given by government agencie ...

in respect of the same liability, in most

common law In law, common law (also known as judicial precedent, judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions."The common law is not a brooding omnipresen ...

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 An obligation is a course of action that someone is required to take, whether legal or moral. Obligations are constraints; they limit freedom. People who are under obligations may choose to freely act under obligations. Obligation exists when the ...

. So if a

married couple Marriage, also called matrimony or wedlock, is a culturally and often legally recognized union between people called spouses. It establishes rights and obligations between them, as well as between them and their children, and between ...

takes a

loan In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that d ...

from a

bank A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Because ...

, the loan

agreement Agreement may refer to: Agreements between people and organizations * Gentlemen's agreement, not enforceable by law * Trade agreement, between countries * Consensus, a decision-making process * Contract, enforceable in a court of law ** Meeting o ...

will normally provide that they are to be "jointly liable" for the full amount. If one party dies, disappears, or is declared

bankrupt Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debt ...

, the other individual remains fully liable. Accordingly, the bank may sue all living co-promisors for the full amount. However, in suing, the

creditor A creditor or lender is a party (e.g., person, organization, company, or government) that has a claim on the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property ...

has only one cause 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 A syndicate is a self-organizing group of individuals, companies, corporations or entities formed to transact some specific business, to pursue or promote a shared interest. Etymology The word ''syndicate'' comes from the French language, Frenc ...

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 A tort is a civil wrong that causes a claimant to suffer loss or harm, resulting in legal liability for the person who commits the tortious act. Tort law can be contrasted with criminal law, which deals with criminal wrongs that are punishable ...

claims, whereby a

plaintiff A plaintiff ( Π in legal shorthand) is the party who initiates a lawsuit (also known as an ''action'') before a court. By doing so, the plaintiff seeks a legal remedy. If this search is successful, the court will issue judgment in favor of the p ...

may recover all the

damages At common law, damages are a remedy in the form of a monetary award to be paid to a claimant as compensation for loss or injury. To warrant the award, the claimant must show that a breach of duty has caused foreseeable loss. To be recognised at ...

from any of the

defendant In court proceedings, a defendant is a person or object who is the party either accused of committing a crime in criminal prosecution or against whom some type of civil relief is being sought in a civil case. Terminology varies from one jurisdic ...

s regardless of their individual share of the liability. The rule is often applied in

negligence Negligence (Lat. ''negligentia'') is a failure to exercise appropriate and/or ethical ruled care expected to be exercised amongst specified circumstances. The area of tort law known as ''negligence'' involves harm caused by failing to act as a ...

cases, though it is sometimes invoked in other areas of law. In the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...

, 46 of the 50 states have a rule of joint and several liability, although in response to

tort reform Tort reform refers to changes in the civil justice system in common law countries that aim to reduce the ability of plaintiffs to bring tort litigation (particularly actions for negligence) or to reduce damages they can receive. Such changes a ...

efforts, some have limited the applicability of the rule. About two dozen have reformed the rule, with several (Alaska, Arizona, Kansas, Utah, Vermont, Oklahoma, and Wyoming) abolishing. In some instances it is abolished except where the defendants "act in concert".

Variations

Some jurisdictions have imposed limits on joint and several liability, but without completely abolishing that doctrine. For example, * In Ohio only defendants who are responsible for more than 50% of the tortious conduct can be held jointly and severally liable for economic losses. A defendant who bears responsibility for an injury but whose tortious conduct was less than 50% is only responsible for his or her share of the plaintiff's economic loss. Non-economic losses (such as pain and suffering or loss of companionship) can only be assigned proportionately. * California allows joint and several liability but only for economic damages. * Hawaii allows joint and several liability for all economic losses but only for non-economic losses when the underlying tort is intentional, related to environmental pollution or selected other classes.

Examples

If Ann is struck by a car driven by Bob, who was served alcohol in Charlotte's bar (and the state has dramshop laws), then both Bob and Charlotte's bar may be held jointly liable for Ann's injuries. If the

jury A jury is a sworn body of people (jurors) convened to hear evidence and render an impartiality, impartial verdict (a Question of fact, finding of fact on a question) officially submitted to them by a court, or to set a sentence (law), penalty o ...

determines Ann should be awarded $10 million and that Bob was 90% at fault and Charlotte's bar 10% at fault: *Under ''several'' or ''proportionate'' liability, Bob would have to pay $9 million (90% of $10 million) and Charlotte's bar would have to pay $1 million (10% of $10 million). If Bob does not have any money and is uninsured, Ann will only recover whatever sum(s) Charlotte's bar and/or her insurance provider are able to pay - up to the limit of any

liability insurance Liability insurance (also called third-party insurance) is a part of the general insurance system of risk financing to protect the purchaser (the "insured") from the risks of liabilities imposed by lawsuits and similar claims and protects the i ...

policy Charlotte may have (plus her own ability to pay, if any) ''or'' $1 million, whichever is ''less''. *Under ''joint'' liability, Ann may recover the full damages from ''either'' of the defendants. If Ann sued Charlotte's bar alone, Charlotte's bar would be liable for the full $10 million despite only being 10% at fault for the injury. If Charlotte's bar had an insurance policy with a liability limit of less than $10 million, the bar would remain liable for any amount over and above the policy limit. Charlotte would have to

join Join may refer to: * Join (law), to include additional counts or additional defendants on an indictment *In mathematics: ** Join (mathematics), a least upper bound of sets orders in lattice theory ** Join (topology), an operation combining two top ...

Bob as defendant in Ann's suit against her. With ''joint and several'' liability, if Charlotte's bar paid the full award of damages, Charlotte's bar could pursue a separate contribution action against Bob for $9 million. Regardless of the outcome of a contribution action, Charlotte's bar would remain liable to Ann for the full $10 million. Joint and several liability can make a defendant liable for the full amount of damages suffered by a plaintiff even if that defendant bears only slight fault for the injury. For example, if a child is injured due to the negligence of a crossing guard employed by a school district, and a court finds the crossing guard to be 99% at fault for the child's injury and the school district to be only 1% at fault, the school district would be liable to pay 100% of the damages. In contrast, under several liability, if the crossing guard was unable to pay money toward the judgment the most that the injured child could recover would be 1% of the judgment from the school district.

Arguments for and against joint and several liability

Joint and several liability is premised on the theory that the defendants are in the best position to apportion damages amongst themselves. Once liability has been established and damages awarded, the defendants are free to litigate amongst themselves to better divide liability. The plaintiff no longer needs to be involved in the litigation and can avoid the cost of continuing litigation. *As each defendant has contributed to a single result, the injury of the plaintiff, although there may be differences in the character or scope of their duties, it may be argued that their joint contribution to the single result prevents any reasonable division of the damages. *Although one defendant may end up paying more than that defendant

tortfeasor A tort is a civil wrong that causes a claimant to suffer loss or harm, resulting in legal liability for the person who commits the tortious act. Tort law can be contrasted with criminal law, which deals with criminal wrongs that are punishable ...

's proportionate share of the damages, it is nonetheless thought that it is better for a culpable defendant to overpay that defendant's share of the damages than for the injured plaintiff to be undercompensated for the injury. Where a financially wealthy party can be named or joined as a defendant, a plaintiff has a greater chance of recovering damages than when the defendants have very limited economic resources or are financially insolvent, or "

judgment proof In the context of contract law, debt collection and civil litigation, the term judgment proof is commonly used to refer to defendants or potential defendants who are financially insolvent, or whose income and assets cannot be obtained in satisfact ...

". Opponents of the principle of joint and several liability argue that its use is unfair to many defendants. * Joint and several liability will lead to cases in which a party who has a very small share of the responsibility for a plaintiff's injury may unfairly shoulder the burden of paying all of the damages. * When defendants may be held jointly liable, the plaintiff may seek out a defendant with considerable resources ("deep pockets") to add to a case, hoping that the defendant will be found to be even 1% to 2% liable for the injury and thus be obligated to pay the entire judgment. For example, where an uninsured drunk driver causes an accident that results in injury, the plaintiff may sue an additional defendant, along with the drunk driver, such as suing the state highway department alleging that a highway defect contributed to the accident, hoping that the additional defendant will be found partly responsible.

Microfinance

In trying to achieve its aim of alleviating poverty,

microfinance Microfinance is a category of financial services targeting individuals and small businesses who lack access to conventional banking and related services. Microfinance includes microcredit, the provision of small loans to poor clients; savings ...

often lends to group of poor, with each member of the group jointly liable. That means that each member is responsible for ensuring that all the other members of the group repay too. If one member fails to repay, the members of the group are also held in default. Joint liability solves the information and enforcement problems associated with

credit markets Credit (from Latin verb ''credit'', meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt), ...

by encouraging

screening Screening may refer to: * Screening cultures, a type a medical test that is done to find an infection * Screening (economics), a strategy of combating adverse selection (includes sorting resumes to select employees) * Screening (environmental), a ...

monitoring Monitoring may refer to: Science and technology Biology and healthcare * Monitoring (medicine), the observation of a disease, condition or one or several medical parameters over time * Baby monitoring * Biomonitoring, of toxic chemical compounds, ...

, costly state verification, and

contract enforcement A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tr ...

References

External links

*Joint and Several Liability: 50 U.S. State Surve

{{DEFAULTSORT:Joint And Several Liability Common law legal terminology Public liability Tort law legal terminology