This article was originally published in the Subrogator, a publication by the National Association of Subrogation Professionals, Winter 2007, Page 130. © Copyright 2007 by NASP. All rights reserved. Republished by Butler with permission from NASP.
Effective April 26, 2006, the Florida Legislature eliminated the last vestige of joint and several liability. Florida has now joined the minority of jurisdictions that have completely abolished joint and several liability. Although this move has brought dramatic change and controversy, it was no surprise. The attempt at abolition actually began nearly twenty years ago and has been heavily lobbied by Florida’s “Big Businesses.” This article will address the impact of the elimination of joint and several liability, and the effect this change in the law will have on subrogation in Florida.
Joint and several liability allows victims to recover fully for their injuries in situations where full recovery might otherwise be unavailable. A perfect example is the widely publicized case of Walt Disney World v. Wood, which has been speculated as a driving force in the elimination of joint and several liability. In Wood, Disney World was found to be one percent at fault and another defendant eighty-five percent at fault, yet Disney World was held responsible for the entire judgment amount due to the doctrine of joint and several liability. Since Wood, the Florida Legislature had modified the statute several times, eventually allowing for joint and several liability only when the defendant was at least ten percent at fault, and further capping the damages for which the defendant could be held liable.
Under Florida’s new law, defendants will only be responsible for their own percentage of liability, whether or not the plaintiff has been made whole. Accordingly, in Florida, the plaintiff will now not have an opportunity to be made whole unless every responsible defendant has the funds to cover their respective apportionment of damages. Of course, if joint and several liability still existed in Florida, it would benefit all plaintiffs in collecting the damages they are awarded, despite one defendant’s lack of funds. Defendants, however, are loathe to the concept as it exposes them to liability for other defendant’s negligence, which is what led to the change in the law.
This change of law will have serious effects on those who pursue subrogation claims in Florida. Any action accruing after April 26, 2006 will be governed by the new law. This will affect every stage of a subrogation matter. Initially, it will affect those deciding whether to pursue a subrogation claim at all. No longer will the total dollar amount of the damages and the strength of the case be the determining factors if there is more than one potentially responsible party involved, but only one party is collectible. The potential for recovery will now have to be weighed solely against each potential defendant’s percentage of fault. One “deep-pocket defendant” will not be reason enough to pursue a case if that particular defendant is likely to have a small percentage of liability.
If a decision is made to pursue a subrogation claim in Florida, the new law should also affect the realistic expectations of the claim. It will, for example, affect the dollar amount that parties seeking subrogation will devote to investigation if most of the culpable parties have no liability insurance, or are otherwise protected from a finding of responsibility.
By abolishing joint and several liability, the statutory change may also, eventually, abolish legal theories that are solely a creature of apportionment of fault, such as contribution. Without joint and several liability, an insurer who has paid a plaintiff’s claim will probably not be able to bring a claim against other responsible defendants under the theory of contribution, since, presumably, no party will ever be required to pay more than their own percentage of fault.
The change in law will further affect proposals for settlement and offers of judgment. A plaintiff seeking subrogation will have to use great care in calculating the exact dollar amount a defendant may potentially be held accountable for when drafting a proposal for settlement. Under the old system, the plaintiff had greater leeway, as many defendants were potentially liable for the entire claim amount, despite their own percentage of liability. Defendants, likewise, can now file lower offers of judgments as the potential for a recovery that is higher than their “fair share” is no longer an issue.
The new law will frustrate subrogation plaintiffs and alleviate defendants of potential liability for other defendants’ negligence. Interestingly enough, although the insurance companies pursuing subrogation will suffer from the effects of the new law, liability insurers will benefit in claims they are defending. For everyone involved, the new law demands attention. All parties pursuing subrogation claims will need to address the new law in relation to every claim they have that was not already in litigation as of April 26, 2006.
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