On June 28, 2011, Governor Corbett signed Senate Bill 1131 into law.
The law, known as the “Fair Share Act” reforms the state’s legal system
by limiting a defendant’s liability in negligence actions to the
percentage of the individual defendant’s fault. Prior to adopting this
law, Pennsylvania had what was known as "joint and several liability"
meaning that if multiple parties are found to have been negligent they
are responsible to the victim for the full amount of damages suffered
regardless of their percentage of liability. Under the “Fair Share Act”
negligent parties are responsible only for damages equal to their
percentage of liability.
For example, suppose a jury finds a
contractor 45% liable for injuries suffered by a victim as a result of
an accident on a construction site and finds a subcontractor 55% liable
for the injuries. Under the old law, both the contractor and the
subcontractor would be responsible for the full amount of damages and
the victim could collect from either party. Under the “Fair Share Act,”
the contractor is responsible for 45% and the subcontractor is liable
for 55% of the damage award. If the subcontractor is insolvent, the
victim could only recover 45% of its damages. However, under the new
law, a party found to be 60% percent or more liable is still jointly and
severally liable for 100% of the damages.
Whether this law is good for
your business depends on whether you are a negligent party or the victim
of a negligent act. One of the major goals of the legislation was to
reduce insurance premiums, so you may want to contact your Commercial
General Liability insurance carrier to inquire whether there will be a
reduction in your rate to reflect the new law.