Crediting Payments by Concurring Tortfeasors: The Decline and Fall of the Jury Rule?

A recent trend deprives defendants of their traditional right to inform juries about amounts already paid in settlement THE tort rule crediting defendants for payments by concurring tortfeasors causes an evidentiary problem. Should this credit be administered by the court or by the jury? Many reported cases have considered the issue, but legal scholarship has given it limited attention. While the theoretical aspects of this somewhat perplexing topic are certainly of intellectual interest, its study is more than an academic pastime. The rights of defendants may be affected in a practical way by whether the damage credit is administered by the court or by the jury. Most defense counsel believe that this evidence does more than merely mitigate damages. It often gives non-settling defendants in personal injury cases significant protection against jury misconduct. In the ordinary personal injury case, learning about these payments probably has little effect on the jury's behavior. However, there is at least one disturbing situation in which this information does influence the outcome of trials. The example that readily comes to mind is as follows: A case involves catastrophic injuries, such as third-degree burns, brain damage, quadriplegia or the like. There are two defendants--one, more or less clearly at fault; another, remotely involved. The plaintiff settles with the party clearly at fault for substantially the full settlement value of the injuries. The plaintiff then proceeds to trial against the remaining defendant. The plaintiff might do this for a variety of reasons. First, if the plaintiff wins, the credit for the prior payment may not substantially diminish the verdict against the second defendant. Unless verdict expectancy is several multiples of the settlement amount, there would have been no voluntary payment. Prejudgment interest will be added to the verdict before the credit is granted. In a state such as Massachusetts, with a 12 percent rate and a three-year delay before trial, this interest adds up to 36 percent of the verdict. Thus, if there is a case in which the verdict expectancy is in the $1 million range, settlement should be in the range of $300,000 or so. If the plaintiff goes to trial in a pro tanto jurisdiction and gets lucky, the arithmetic might look like this: $1 million verdict, plus $360,000 in prejudgment interest, equals $1,360,000, minus $300,000 settlement, equals $1,060,000 additional payment to the plaintiff. Readers of the Defense Counsel Journal will be familiar with many instances in which this settlement strategy has been used. The facts of reported decisions attest to its popularity with the plaintiff's bar.(1) Given the type of bootstrapping that can be involved, it's surprising that this technique is not more prevalent. But a scenario like this makes sense only if the plaintiff can count on jury sympathy to substitute for the lack of a convincing liability case against the remaining defendant. This emotion will be a potent factor in the trial unless the jury learns that the supposedly uncompensated victim already has received a substantial payment. In at least this instance, the court rule is outrageously unfair to some defendants. It forces them to choose between paying more than a fair share of the alleged joint liability and running the risk of a verdict so large that its share becomes much larger than the party principally at fault. These considerations of fairness to defendants are never mentioned in the infrequent scholarly discussion of the subject. Except for occasional preposterous assertions that the evidence might be prejudicial to the defendants who are trying to introduce it, the literature concerns itself only with possible prejudice to plaintiffs.(2) This article will highlight a recent and largely unheralded trend toward withholding this evidence from juries. It will consider the reasons for or against the court and jury approaches, suggesting that the court rule may be based on questionable views about tort law or clearly mistaken speculations about jury psychology. …