In settlements among tortfeasors, what is the effect on non-settling tortfeasors?

In settlements among tortfeasors, what is the effect on non-settling tortfeasors?

• A. Their judgment is reduced by the larger of the settlement amount or the settling tortfeasor's equitable share of fault
• B. Their judgment is reduced by the entire settlement amount
• C. They are released from liability
• D. They receive credit only for their own fault

Answer: (A)

When several tortfeasors are involved and one settles with the plaintiff, the other non-settling tortfeasor receives a credit against liability. The amount of that credit is the larger of two figures: the settlement amount and the settling tortfeasor’s equitable share of fault in the total damages. This rule prevents the settlement from shifting more of the liability to the non-settling party than is fair and keeps the plaintiff from double-recovering. For example, if total damages are 100,000 and the settling tortfeasor bears 60% fault (their equitable share is 60,000), and they settle for 60,000, the non-settling tortfeasor’s liability is reduced by the larger of 60,000 (the settlement) or 60,000 (the fault share). That leaves the non-settling tortfeasor responsible for the remaining 40,000, which aligns with their 40% fault. This approach ensures the non-settling party’s ultimate payment reflects fault allocation, while honoring the settlement credit.

When several tortfeasors are involved and one settles with the plaintiff, the other non-settling tortfeasor receives a credit against liability. The amount of that credit is the larger of two figures: the settlement amount and the settling tortfeasor’s equitable share of fault in the total damages. This rule prevents the settlement from shifting more of the liability to the non-settling party than is fair and keeps the plaintiff from double-recovering.

For example, if total damages are 100,000 and the settling tortfeasor bears 60% fault (their equitable share is 60,000), and they settle for 60,000, the non-settling tortfeasor’s liability is reduced by the larger of 60,000 (the settlement) or 60,000 (the fault share). That leaves the non-settling tortfeasor responsible for the remaining 40,000, which aligns with their 40% fault.

This approach ensures the non-settling party’s ultimate payment reflects fault allocation, while honoring the settlement credit.