Missouri Chamber champions reforms to liability statutes

This week, the Senate Small Business, Insurance and Industry committee took on legislation that has long been an important priority for the Missouri Chamber: Joint and several liability reform.  The bill, Senate Bill 830, sponsored by Sen. Mike Parson (R-Bolivar), would replace Missouri’s current modified joint and several liability system with a more equitable approach known as “fair share.”

Sen. Mike Parson, R-Bolivar

Sen. Mike Parson, R-Bolivar

The system of assigning fault and determining which business can be found liable for damages is known as “Modified Joint and Several Liability.”  The challenge for Missouri businesses under current law is they can be held liable for 100 percent of the damage award in a lawsuit even if they are only 51 percent at fault.

Modified joint and several liability creates a precarious business environment for companies in Missouri.  A business can be held liable for the entire damage award even if multiple defendants are at fault.  Worse yet, a business can even be held liable for damages caused by a third party who is not in the litigation, but who is also at fault.  This is a significant cost driver to litigation and to operation costs for businesses.

“Missouri’s joint and several liability statute stifles investment and innovation while increasing uncertainty for businesses that are already facing an historic challenge to remain viable and provide jobs for Missourians.  Moving Missouri to a fair share doctrine is a necessary and long overdue change,” said Jay Atkins, general counsel for the Missouri Chamber.

Several neighboring states have already reformed their laws to a fair share system.

Fair share is the best system possible for Missouri because it apportions cost between all parties according to the percentage of fault attributed to each.  Thus, a business liable for 51 percent of the fault would be liable for 51 percent of the damages.  It would also ensure that businesses would not end up paying for third parties that were liable for damages but not subjected to the litigation

The Missouri Chamber was the lead advocate that changed joint and several standards in 2005. Prior to 2005 an individual that was only 1 percent at fault could be held liable for the entire judgment.

No action was taken on the bill.

For more information on tort reform legislation, please contact Jay Atkins at jatkins@mochamber.com or by phone at 573-634-3511.

https://www.youtube.com/watch?v=SEBEdtwXFLo

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