It may seem like common sense that when multiple parties are found at fault in a civil lawsuit, each defendant should pay for their share of the damages.
For example, if you caused 60 percent of the damage, you should pay 60 percent of the cost to fix it.
But that’s not how it works in Missouri courts.
Instead, Missouri defendants—including many businesses—are being made to pay more than their fair share simply because they possess financial resources or valuable assets.
“Even though you’re just 51 percent (at fault), you very easily could be held accountable for 100 percent of it,” said Sen. Mike Parson, a Republican from Bolivar. “To me, it’s a fairness issue.”
To address this problem, Sen. Parson has filed Senate Bill 140, which would end the practice of targeting businesses in lawsuits in an effort to use business assets to pay other defendants’ liabilities. Sen. Parson’s bill would make it so that defendants pay only the portion of the damages that equals their percent of fault.
Currently in Missouri, if a defendant is found at least 51 percent at fault in a lawsuit, that defendant can be held liable for up to the entire judgment. The 51 percent law has been in place since 2005. Lawyers call it “joint and several liability.”
In practice, joint and several liability creates an incentive for trial attorneys to seek out successful businesses to add to their lawsuits. If lawyers can then make a convincing argument that these companies are 51 percent at fault, then the companies may end up paying much more than their fair share.
“They’ve just really went after the deep pockets,” said Sen. Parson.
At times, the claims of business fault are tenuous and are later thrown out. But even when the claims are later dropped, businesses must still pay costly legal fees to prove the claims are frivolous.
Joint and several liability statutes also play an important role in economic development efforts. Growing and expanding businesses routinely review the legal climate in states prior to establishing a presence in a new state.
Right now, Missouri’s joint and several law—which encourages lawsuits targeting businesses—is only scaring away potential growth.
“Do you think that those companies looking to come here are not going to look at their obligation? It just makes good business sense to take a look at all of that,” Sen. Parson said. “When they see (Missouri’s joint and several statute) versus a state that doesn’t have it, common sense is going to tell you they are going to take a harder look at that other state.”
Joint and several reform is one of a number of important legal reforms that the Missouri Chamber of Commerce and Industry is advocating for during the 2015 Legislative Session.
“Missouri’s legal environment is not friendly to business. Our laws are slanted in the favor of trial attorneys and that’s a big problem for our business community and for everyone who wants to see robust economic expansion and job growth in our state,” said Jay Atkins, Missouri Chamber general counsel and director of governmental affairs. “I’d like to thank Sen. Parson for making legal reform a priority this session. His efforts are helping raise awareness of the problems being caused by our state’s job-killing legal climate.”
Sen. Parson said the Missouri Chamber and the chamber’s members across the state will play an important role as Senate Bill 140 progresses this session.
“I think the Missouri Chamber, without a doubt, will be the key leader in leading this legislation to get it passed,” he said. “Without their help, I think it would be much more of an uphill climb than it is. But I think with their resources, and if they get their business folks behind it, I think you’re going to see we have a lot better shot at getting it done.”
For more information, contact Atkins at email@example.com