Lamson, Dugan and Murray, LLP, Attorneys at Law

Seven Final Thoughts on Economic Damages and Joint and Several Liability

Posted in In-House Counsel, Legislation

Over the course of this six part series, we have examined the state of economic damages and joint and several liability law in Nebraska.  I will provide some closing thoughts on the state of the law, the system and a substantial question that has not been answered.

  1. Any co-defendant has the risk of being jointly liable for all economic damages when there is no settlement between the claimant and any liable party (Part I);
  2. A settlement between a claimant and a liable party extinguishes joint and several liability for the remaining liable party (when there are two liable parties) (Part II and Part III);
  3. The Nebraska Supreme Court is of the opinion that its decision in Tadros encourages settlement and creates finality of litigation (Part IV);
  4. A pro tanto credit should be applied in strict liability cases (Part V);
  5. In reality, the system does not encourage settlement as it allows plaintiffs to hold a liable party hostage with the risk of exposure to substantial economic damages on the basis of minimal liability as long as no settlement occurs;
  6. In reality, the system does not encourage settlement as it places plaintiffs’ counsel in a situation of potentially leaving money on the table (as occurred in Tadros, Part III) and exposing themselves to personal liability;
  7. The Nebraska Supreme Court has provided little guidance on the application of the Comparative Fault Act in cases with more than two liable parties and one liable party reaches a settlement.  Arguably, Neb.Rev.Stat. 25-21,185.10 will still apply as the “action” will involve “more than one defendant” at the time it is tried.  Arguably, Neb.Rev.Stat. 25-21,185.11 will also apply as there will most likely be a “release, covenant not to sue or similar agreement” entered into between the claimant and the settling liable party.  It is my expectation that there will be a hybrid application of the two statutes in an effort to “encourage settlement” and “finality in litigation”.  However, that is yet to be determined. 

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