The Pennsylvania Fair Share Act: What You Need to Know
On June 28, 2011, Pennsylvania Governor Corbett signed into law the Fair Share Act (“Senate Bill 1131”), which represents a significant shift in tort liability law in Pennsylvania. Under the Fair Share Act, when liability is attributed to more than one defendant, each defendant found to be less than 60% liable is responsible for only its proportionate share of the liability (with certain exceptions noted below).
Pennsylvania Tort Liability Prior to the Fair Share Act
Prior to the enactment of the Fair Share Act, Pennsylvania law utilized a system of joint and several liability, where multiple defendants could be held jointly liable for 100% of all damages owed to a plaintiff. Under this system, when a plaintiff obtained a judgment against multiple defendants, the plaintiff could require an individual defendant to pay the entire liability, regardless of that individual’s share of the fault. Thus, even if a particular defendant was assigned only 1% of the liability, that defendant could be responsible for payment of 100% of the damages. Defendants who paid more than their portion of the liability had the right to seek compensation from those defendants who paid less than their portion, but that did not guarantee that the remaining defendants would be able to pay.
This system provided an advantage to plaintiffs, who could obtain full recovery from a minimally liable defendant if that defendant had sufficient resources to pay for 100% of the damages. This was true even if the primarily liable defendant had no resources to pay.
Tort Liability Under the Fair Share Act
Under the Fair Share Act, defendants are now required to pay only their proportional share of liability, except in the circumstances listed below. Courts must now enter separate judgments in favor of the plaintiff and against each defendant for their apportioned amount of liability, rather than a single judgment covering all parties. This system prevents a single defendant from bearing responsibility for the entire amount of damages regardless of their portion of the fault.
A single defendant may still be required to pay the entire amount of damages under the following circumstances:
1. An action for intentional misrepresentation
2. An action for an intentional tort
3. Where the defendant has been held liable for 60% or more of the total liability
4. An action over the release or threatened release of a hazardous substance
5. An action concerning a violation of the Liquor Code
In these situations, the prior law of joint and several liability applies and a single defendant can be forced to pay an amount of damages higher than their proportionate liability, although that defendant is entitled to recover compensation from any other defendant who paid less than its fair share.
Additionally, defendants who became nonparties because of a release from the plaintiff may be brought back into the action for purposes of determining their respective share of the liability among all the other defendants. This provision excludes employers who were previously granted immunity under the Pennsylvania Workers’ Compensation Act.
The Fair Share Act is intended to benefit companies doing business in Pennsylvania because it may limit risk of liability for all damages in cases involving multiple defendants.
David V. Weicht is a Partner and Co-Chair of Leech Tishman’s Litigation Practice Group. He can be reached at (412) 261-1600 x 216 or firstname.lastname@example.org. William A. Buck is a Partner practicing in the Corporate and Taxation Groups of the firm. He can be reached at (412) 261-1600 x 223 or email@example.com. If you would like more details about these provisions or any other aspect of the new law, please do not hesitate to contact David or Bill. Click here for more information on Leech Tishman’s Corporate Practice Group and here for more information on the Litigation Practice Group.
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