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Recent Settlement Highlights Impact of Tort Reform

Emily Douglas died when the vehicle she was driving did not stop at an intersection under construction and collided with a tractor trailer.  One passenger in Douglas’ car died while a third sustained serious injuries.

The injured passenger and the family for the deceased passenger brought suit against Douglas, against the construction company for not placing a larger stop sign at the intersection and the driver of the tractor trailer for failing to keep a proper lookout.  The truck driver also received four citations as a result of a commercial vehicle inspection conducted at the scene.  Another defendant was the Missouri Highway Transportation Commission, who was responsible for the construction at the intersection.

Last month, the parties reached a $2.2 million settlement.  However, attorneys on both sides of the settlement acknowledged that the result would have been much different had this case been filed after August 28, 2005, the effective date of Missouri’s 2005 Tort Reform Statute.

Under the new law, the Plaintiffs probably would have received a dramatically different result.  In fact, the attorneys in this case doubted that the case could have been settled had the Tort Reform statute applied.  To understand how the new statute could make such a difference, a familiarity with the term “joint and several liability” is necessary.  This concept is difficult to grasp for many attorneys, much less the general public. 

All tortfeasors were jointly and severally liable under the old law, which meant that plaintiffs could collect the full amount of their damage awards against any liable defendant, even if that defendant was found to be at fault in only a small part.  The old law placed the burden on the defendants then to pursue actions for contribution and sort out the collection disparity against the co-defendants if one defendant paid a greater percentage of the award than the percentage of fault applicable to that defendant. 

As a result of Missouri’s Tort Reform Statute, joint and several liability attaches only if a defendant is found to be 51% or more at fault.  Therefore, the impact of the new statute could be quite harsh on plaintiffs in multiple-defendant cases, especially if none of the defendants are assessed fault at 51% or more.  In that instance, each defendant would be responsible for paying no more than their respective percentage of fault multiplied by the total amount of the plaintiffs’ award. 

For instance, a jury most assuredly would have found that Douglas was the party most at fault.  Therefore, none of the other Defendants would have been found to be jointly and severally liable.  Douglas would have been the only party who could have been held responsible to pay the entire amount of the Plaintiffs’ award.  However, the key fact in this analysis is one that the jury never would have learned:  Douglas had only $50,000 worth of insurance coverage and the Plaintiffs had little hope of collecting anything from her estate.  The other Defendants’ exposure was capped according to their respective percentage of fault. 

Indeed, this case illustrates how the Tort Reform Statute will force plaintiffs to accept significantly reduced settlements.  [H.B. 393]

Link to H.B. 393:

http://www.senate.mo.gov/05info/BTS_Web/HouseBillSumm.aspx?SessionType=R&BillID=16387