RI Statehouse.2015-06-17 16.03.43 (2)Last week I testified before Rhode Island’s Special Legislative Commission to Study Changes to the Law of Joint Tortfeasors.

Legislation about tort law is a notoriously difficult matter. The interests of the plaintiff’s and defendants bar sharply opposed, and fair consensus is hard to find.

Still, Rhode Island is apparently engaged in reconsidering its law on the subject and I was invited to go and testify on the Model Apportionment of Tort Responsibility Act.

The subject is a complex one, not easily reduced to a few words. But if you you are interested, here is what I had to say.

June 22, 2015

Hon. Michael J. McCaffrey
Chair
Special Legislative Commission to Study Changes
to the Law of Joint Tortfeasors
State of Rhode Island General Assembly
82 Smith Street
Providence, RI 02903

Re: The Model Apportionment of Tort Responsibility Act

Dear Senator McCaffrey:

As you know, last Thursday, I had the privilege of testifying before your Special Legislative Commission to Study Changes to the Law of Joint Tortfeasors. I am sorry that your scheduling difficulties prevent you from personally attending, but at Senator Lombardi’s request I am happy to provide you here with the substance of my remarks:

It is my pleasure to testify about the Model Apportionment of Tort Responsibility Act before your Commission.

Like the witness before me, Bob Quigley, I come to you with long experience in tort litigation. For more than 35 years, tort litigation has been a major part of my work a civil litigator, both for defendants and for plaintiffs. I mention the parties I have represented in that order, because early in my career I mostly represented defendants, usually for insurance companies. For the last 25 years, I have mostly represented plaintiffs, and for long years, my practice has almost exclusively been for plaintiffs.  I also work regularly as a mediator. My practice has been in Vermont, and I am not a Rhode Island lawyer and do not present myself to you as having expertise in Rhode Island law.

In any event, I don’t appear before you in my capacity as a private practitioner.  I appear as a Uniform Law Commissioner and as a member of the ULC’s Drafting Committee on the Uniform Apportionment of Tort Responsibility Act. (The Uniform Act was re-designated by the ULC as a “Model Act” a few years ago without any changes in its substance.) I have been a member of the Uniform Law Commission for more than 20 years and currently serve as the Chair of its Executive Committee.

The Uniform Law Commission (ULC), established in 1892, promotes uniformity of law among the several states of subjects as to which uniformity is desirable and practicable. The ULC improves the law by providing states with non-partisan, carefully considered, and well-drafted legislation that brings clarity and stability to critical areas of law. The ULC’s work supports the federal system, seeks to maintain an appropriate balance between federal and state law, and facilitates the movement of individuals and the business of organizations with rules that are consistent from state to state. Let me describe to you the background that surrounded the promulgation of the Uniform Apportionment of Tort Responsibility Act and explain the major provisions of the Act.[1]

Background

     The Common Law applied two harsh rules to the law of tort responsibility:

  1. Contributory Negligence. To recover, a plaintiff was required to be completely free of responsibility. In most states a plaintiff who was found to be 1% responsible for his injuries could not recovery any damages who was 99% responsible for those injuries.
  2. No Contribution among Joint Tortfeasors. There was no contribution among joint tortfeasors. So, if two drivers were negligent, one slightly and other very significantly, and the resulting injuries were very severe, an injured passenger could chose to collect all of his damages from the slightly negligent driver. That driver could not recover his payment — in whole or in part – from the seriously negligent driver.

The Uniform Law Commission began to seek to bring fairness and harmony into this area of the law long ago. In 1939, the ULC addressed the no contribution rule, adopting its first Uniform Contribution Among Joint Tortfeasors Act. In 1955, a further revision of this Act superseded the 1939 Act. In all, 22 states adopted one version or another of these Acts. They addressed the questions of multiple liability when there was more than one person (tortfeasors) responsible for injury to another. The early Uniform Acts addressed the no contribution rule. They provided for joint and several liability, with right of contribution in the event one tortfeasor would pay another tortfeasor’s share, even when there was no action in concert.  These early Uniform Acts did not address the unfairness of the contributory negligence rule.

When fault may be attributed to personal injury as a cause, there is an inherent unfairness in the doctrine of contributory negligence. Why should a plaintiff whose own fault may contribute 10% to his or her injury, be totally uncompensated when a defendant or defendants were responsible for the other 90%?

As a result, contributory negligence as an absolute bar to compensation began to wane as a doctrine of personal injury law in the 1960’s and 1970’s. The doctrine of comparative fault began to replace the older, contributory negligence doctrine.

In 1977, the ULC addressed the unfairness of contributory negligence with the Uniform Comparative Fault Act. That Act adopted pure comparative fault. A plaintiff who was 99% responsible for his own injuries could recover 1% of his damages from a defendant who was 1% responsible for those injuries. The Act was not notably successful in the state legislatures, though it did impact the common law. Even today, Rhode Island, New York State and some 10 or 11 other states recognize pure comparative fault.

As of 2003, all but five of the remaining states had adopted a modified version of comparative negligence, imposing liability where the tortfeasor’s sole or joint negligence is equal to or greater than the negligence of the plaintiff.

Comparative fault in either the pure or modified form do not work well with the early ULC acts, which modified the concept of joint and several liability premised upon contributory negligence as an absolute defense.

As time has gone on, and as comparative fault has replaced contributory negligence across the country, the doctrine of joint and several liability has been diminished or limited in many states.

However, these developments have been uneven and confusing from state to state. For example, if a tortfeasor is responsible for 20% of an injury, and another tortfeasor is responsible for 70% of the injury and the injured person is responsible for 10% of his or her own injury, a rule that holds the 20% tortfeasor potentially liable for the other tortfeasor who is 70% responsible, appears to be inherently unfair. In addition, the old rule does not take into account the percentage of harm attributable to the injured person.

The Model Apportionment of Tort Responsibility Act, (available on the web at: http://www.uniformlaws.org/shared/docs/apportionment_of_tort_responsibility/tort_final_jan04.pdf) brings these developments together in one statute that reconciles the central questions not well resolved in most states. It replaces the Uniform Comparative Fault Act and the older Uniform Contribution among Joint Tortfeasors Acts.

 The Major Provisions of the 

Model Apportionment of Tort Responsibility Act

To begin with, the Model Act adopts a partial or modified form or comparative fault. In the modified form, when an injured person’s contributory fault reaches a sufficient threshold, it becomes an absolute defense. If the tortfeasors’ liability is less than the threshold, the injured person’s fault is measured against the fault of all other tortfeasors to determine the percentage for which each is responsible.

The threshold to trigger an absolute defense is usually fault that is equal to or greater than the fault of the party tortfeasors. A state is offered the opportunity to choose either of these formulae. Most states have already adopted one or the other of these approaches. The Model Act allows a state to choose the modified version it wishes to adopt, anticipating that most states will continue their current versions. There is no particular reason that the trigger could not be eliminated in a state like Rhode Island, if it decided to continue to be a pure comparative negligence state.

Joint and several liability when multiple tortfeasors act in concert remains, along with some other situations in which a finding of joint and several liability continues to be justifiable. Otherwise, joint and several liability is not continued. Even if there is joint and several liability, there is also a right of contribution if a tortfeasor must pay the share of another tortfeasor.

Under the Model Apportionment of Tort Responsibility Act, the trier of fact must determine “the percentage of the total responsibility of all the parties and released persons attributed to each claimant, defendant, and released person that caused the injury or harm. Id. at § 4(a)(2). If there are multiple tortfeasors and there is no joint and several liability, the judgment assesses the responsibility of multiple tortfeasors severally as to each. The injured party’s fault is part of the assessment of responsibility.

Thus, under the Act, “responsibility” is allocated only among those persons who are parties to the action and any person who has been released from liability, either by securing a release, Id. at § 8, or having been deemed to have received such a release. Id. at § 9. The percentages of allocated responsibility must equal 100%. See Comments, Id. at § 4. In determining the percentages of responsibility, the trier of fact “shall” consider:

(1) the nature of the conduct of each party and released person determined to be responsible; and (2) the extent of the causal relation between the conduct and the damages claimed.

Id. at § 4(b).

“If a party is adjudged liable for the act or omission of another party . . . the court shall enter judgment jointly and severally against the parties for their joint share.” Id. at §6(3).

In addition, a party found liable for the act or omission of another party has a right of indemnification from that other party. Id. at § 7(b). This subsection recognizes the right of an employer or other person held liable solely on the basis of vicarious or similar liability to seek indemnity from “the person whose act or omission constituted the basis for imposing such responsibility. Comments, Id. at § 7.

Where a claimant brings suits against one, but less than all, of those persons who caused the claimant’s harm, a defendant has the express right to join a party who has not been sued, but who is potentially responsible for all or part of claimant’s harm. The defendant has a right to seek contribution or indemnity, whichever is appropriate, in the third-party action. § 7(c)(1) and Comments, §7.

In addition, the Act allows a party found liable to seek contribution or indemnity, whichever is appropriate, from a non-party, if the non-party “is responsible for all or part of the claimant’s injury or harm.” Id. at § 7(c)(2) and Comments at § 7.

The injured party has the opportunity, if a claim is not paid by a tortfeasor in the time an injured person has to file a motion for a new trial , to move for a reallocation proceeding. In that proceeding, the court may determine if there is an uncollectable share, and thusly reallocate the uncollectable share among all who remain responsible. Any tortfeasor who pays the uncollected share of another has recourse against that other in all cases.

So for example:

Assume that P, a claimant, sustains $100,000 in damages and is found to be 40 percent at fault and defendants A and B are found to be 20 and 40 percent at fault, respectively.  If reallocation is sought because defendant A is insolvent, A’s 20 percent share of$20,000 would be divided among the claimant P and defendant B equally since each was 40 percent at fault with the following result.  P’s right to recover, which was originally $60,000, would be reduced to $50,000 ($60,000- (1/2 x $20,000 = $10,000)) and B’s responsibility would be increased to $50,000 ($40,000 +(1/2 x $20,000 =$10,000).  Thus, P’s share of responsibility will have been increased from 40 percent to 50 percent while defendant B’s share will have been increased from 40 percent to 50 percent.

Comments, Id. at § 5, p. 20.

The Model Act deals with other problems of both comparative fault and joint and several liability. For example, it provides for the effect of a release of a tortfeasor before adjudication of responsibility. No other tortfeasor is charged with the responsibility of the released tortfeasor. The injured party in essence assumes the share.

The rules of the Model Apportionment of Tort Responsibility Act reconcile the inherent conflicts in the uneven development of comparative fault doctrine and the problems of multiple tortfeasors. It is a potentially useful addition to the law in every state.

Questions

At the end of my testimony, Commission Member John Barylick asked me several good questions.  He asked whether it wasn’t true that § 9 of the Act, might not add to transaction costs by creating litigation in cases where a workers’ compensation insurer asserts a lien or right of subrogation against the proceeds of a third-party tort claim.  The Act “treats employer’s fault, when the employer or its insurer is exercising a workers’ compensation lien or subrogation right, as if the employer had obtained a release from the employee for the dollar amount of the percentage of fault of the employer that contributed to the employee’s injury or harm.” Comments, Id. at § 9, p. 29.

This would apply consistently fair treatment an employer whose own fault has contributed to an employee’s injury. Why should such an employer (or its insurer) recover 100% of its losses from a third-party tortfeasor who has contributed (perhaps even to a lesser degree) to injury than the employer.

Of course, as Commission Member Barylick’s question points out, there is no free lunch. If the employer’s recovery is to be reduced by the extent of its own fault, there will be costs incurred in assessing that fault. The value judgement is whether the increased fairness is worth the transaction costs. I submit only that cases where the employer’s fault has combined with that of a third-party will be relatively few, and that most such cases will settle without trial, and therefore have low transactions costs.

Second, Commission Member Barylick asked me if it was not true that adopting the Model Apportionment of Tort Responsibility Act would not serve to disturb “75 years of established case law in Rhode Island.” Of course the answer is “yes.” That’s in the nature of changing the law. As I said, I am not an expert in Rhode Island law. But also as I noted above, there is no free lunch. The question for your Commission to decide is whether the improved policy is worth the cost of change.

Conclusion

      Legislation on questions of tort liability is a difficult process. In most states, the plaintiff’s bar and the defense bar — and the various interests they represent — are compelled by their financial interests to fiercely protect any advantage the existing system affords them and to resist any change that might impair those advantages.

The Uniform Law process is a unique one. The Commissioners are pledged to leave the interests of their clients at the door. Because we are working on model legislation, there is bit more insulation between a lawyer/commissioners’ individual interests and an effort to reach fair policy answers. The ULC operates wherever it can by consensus. The Model Apportionment of Tort Responsibility Act embodies the consensus of the some 350 members of the Uniform Law Commission, all lawyers, judges or law professors, representing all 50 states, the District of Columbia, and the Territories of Puerto Rico and the U.S. Virgin Islands, as to what would be a fair and comprehensive system for the apportionment of tort responsibility. Only a small number of those Commissioners are active tort lawyers with any possible stake in the outcome.

I would submit to your Commission that, if, as is often the case when tort liability rules are at issue, you find that there is an apparently unbridgeable divide between the interests of plaintiffs and defendants, perhaps the Model Apportionment of Tort Responsibility Act, in whole or in substantial part, would be a comprehensive compromise that would definitely answer the significant policy questions at issue, while treating all parties fairly, even if it would delight no one. As you know, that is a commonly accepted definition of a good compromise.

Thank you again for the chance to explain the Act to your Commission. I wish you the best in your effort to craft fair and certain legislation.

Sincerely,

Richard T. Cassidy
For the Drafting Committee On the Model Apportionment of Tort Responsibility Act

cc:      Hon. Frank S. Lombardi
Hon. David E. Bates
John P. Barylick, Esq.
John F. Kelleher, Esq.

 

[1] Credit for much my description of the Act must go to Roger Henderson, Reporter for the Uniform Apportionment of Tort Responsibility Act  (“UATRA”) drafting project and Gene N. Lebrun, Chair of the Drafting Committee, who together drafted the Comments UATRA and to the Legislative Staff at the ULC, which drafted the Apportionment of Tort Responsibility Act Summary, on our web page at: http://www.uniformlaws.org/ActSummary.aspx?title=Apportionment%20of%20Tort%20Responsibility%20Act

Credit is also due to Douglas G. Houser, of Bullivant Houser Bailey, P.C., for his excellent monograph: Apportionment Of Liability: Uniform Apportionment Of Tort Responsibility Act As Compared To Restatement Third, Torts, presented to the 2004 Annual Meeting Federation of Defense & Corporate Counsel, July 25 to August 1, 2004 and on the web at: http://www.thefederation.org/documents/ZG%20-%20HOUSER.pdf

I borrowed directly and substantially from the language of these documents in preparing my testimony. Of course, responsibility for any errors must be my own.

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The Supreme CourtOn Saturday, CNN published an important story on the status and future of the American legal profession. The story, by University of Tennessee Law Professor Benjamin H. Barton, The Fall and Rise of Lawyers, (May 23, 2015), asserts that sole practitioners have struggled financially for 25 years and that the future looks even worse.

My experience, from talking with lawyers across the country, and from representing a number of lawyers here in Vermont, is that Barton is just plain right in saying that the largest single segment of our profession is having a tough go at making ends meet.

I say that even though I suspect the data Barton chooses to summarize likely overstates the problem somewhat. He tells us that an IRS study shows that the inflation-adjusted average income levels for sole practitioners fell 30%  in  25 years, from $70,747 in 1998 to $49,130 in 2012.

I expect that this average number has been dragged down somewhat by the large numbers of sole practitioners who report some, but very little income, because they practice far less than full-time. But even if that is true, and I think it is, if money were growing on trees for lawyers, I believe that many “dilettante” lawyers, who now work very little in the field, would dive in full-time and pick those green leaves. They don’t because it does not seem worthwhile to them to do so.

These relatively low earnings may seem shocking to members of the public who see the lawyer class as rich and powerful. Surly, the rich and powerful may include many lawyers, but most lawyers are just not in that club.

As Burton points out, this is not all bad. In part, it is a result of new and efficient competition for routine legal work. And it is the harbinger of two important trends for the future. For one thing it means that routine legal services are getting cheaper, meaning that more American can get access to the services they need. The American legal community needs to understand that while legal aid programs and pro bono legal work will always have a place in the access to justice world, the only way to fill the access to justice gap is with more efficient work at far lower costs. Those efficiencies, through innovations like virtual law firms, automation, and work by paraprofessionals, are an increasing market presence.  I feel sure that a generation of lawyers willing to accept lower compensation to meet the needs of middle and low income Americans will arise.

And second, as Barton points out,  quoting my old friend Richard Granat, more complicated and interesting legal work will remain for those who can compete to get it and do it successfully.

Barton’s CNN article is apparently drawn from his forthcoming book, Glass Half Full: The Decline and Rebirth of the Legal Profession (Oxford University Press, June 2105). I can’t wait to get my eyes on it!

Meanwhile, aspiring lawyers, law schools and bar associations, take notice!

Rich Cassidy

 

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