When a plaintiff reaches a settlement of a personal injury claim against one of multiple defendants, how does that settlement affect the remaining defendants? The answer will depend on which state’s laws govern. In Illinois, the remaining defendant may recover dollar-for-dollar up to the settlement amount if he otherwise complies with the statutory requirements of the Joint Tortfeasor Contribution Act. In Indiana, however, the result is controlled by the Indiana Comparative Fault Act. Under the Indiana Comparative Fault Act, defendants may assert an affirmative defense known as a non-party defense and, in order to get a reduction to its damages, the non-settling defendant must plead and prove the amount of fault attributable to that settling co-defendant.
At trial, an Indiana jury would likely be instructed that it will apportion fault to plaintiffs, defendants, and identified non-parties. The plaintiff’s verdict will be reduced by the percentage of fault attributed to the plaintiff, and also by whatever fault the jury attributes to the non-party. Each defendant will generally be liable severally for only his own percentage of fault. For example, assume a jury found that a personal injury plaintiff suffered $100,000 in damages. Next, the jury would then apportion fault to those listed on the jury verdict form. Assume they found the plaintiff bears 10% of comparative fault, that a non-party who was a settling former co-defendant bears 30% of the fault, and that the sole remaining defendant bears 60%. The remaining defendant would be liable for $60,000—regardless of the amount that his co-defendant previously paid plaintiff to settle.
Significantly, an Indiana defendant may name as a non-party those who were never parties to the case, and even those who cannot be subject to liability to the plaintiff. The jury is not permitted to hear of any immunity defense that the non-party might have.
In Illinois, the rule is different. In Illinois, when a plaintiff settles with one of multiple defendants in good faith, then any judgment entered against the non-settling defendant may be reduced dollar-for-dollar to the extent of the amount stated in the settlement release.
The effect multiple defendants have on litigation depends upon your state’s controlling law. In Indiana, a defendant has the opportunity to plead and prove the fault of settling co-defendants, as well as those who were never parties, as a means to reduce his overall potential judgment. In Illinois, however, the jury can only apportion fault to parties to the case. The Illinois defendant, however, gets the clarity of knowing his set-off amount prior to trial.