What Does Joint & Several Liability Mean?
July 18, 2019
Joint and several liability is a concept applicable in many areas of law, including contract, debtor/creditor, partnership, insurance/indemnity law, real estate and personal injury law.
In the context of personal injury (otherwise known as Tort Law), a key concept is negligence. In order to prove negligence, there must be a duty of reasonable care, a breach of that duty, causation and damages. A plaintiff in a personal injury case must prove there are actual losses caused by the defendant’s breach of the duty of care. A plaintiff who is damaged by a defendant’s negligence will want the court to make the plaintiff whole again with compensation for such past, present and future losses, such as medical expenses, pain and suffering/impairment (mental and physical) and loss of earning capacity.
What if There Is More than One Defendant?
In some instances the actions of two separate parties caused harm to the plaintiff. If two defendants (each a tortfeasor) caused the single injury that is not divisible (i.e. a broken leg), then each defendant can be held “jointly and severally liable.” Under joint and several liability, each defendant can be held liable for the entire judgment (monetary damage award). Later, after one defendant makes the plaintiff whole, defendant #1 can sue defendant #2 under the concept of “contribution,” meaning each defendant pays its proportionate share. In a case where two separate defendants injured a plaintiff for two separate injuries, joint and several liability would not need to come into play. Each defendant would be liable for the injury it caused.
In partnership law, partners are jointly and severally liable for all torts committed by its employees or the other partners if within the scope of the partnership business. Partners can then later seek contribution from other partners in the same way described above. In a real estate lease, when a couple or two roommates lease residential space or two business owners rent an office or retail space, each party is 100 percent liable for the rent and to perform the obligations under the lease. The landlord doesn’t have to go after each tenant for 50 percent, later, the co-tenants can sue each other for contribution.
In tax law, a husband and wife who file a joint return are each jointly and severally liable for the full amount of the tax liability. If the couple owes the Internal Revenue Service (IRS) $10,000, the IRS can collect $10,000 from the wife and the wife can later seek $5,000 (or other proportionate amount) from her husband.
The Bottom Line
Joint liability apportions a judgment, debt or contract obligation equally or on a pro rata basis, whereas joint and several” liability is a disproportionate satisfaction of a judgment, debt or contract obligation with the goal to make each party liable for the whole to the plaintiff (with a right of contribution from the other defendants later.) Joint and several liability is an especially important concept when one co-defendant has no assets (sometimes referred to as “judgment proof”) and the other defendant has the means to pay the judgment and make a plaintiff whole.