Lia-bil-ity…Easy as 1-2-3

March 17th, 2010. By Kristine B

Often in the media you’ll hear the word ‘liability’ thrown around. In fact, liability is a word that’s used all the time. However, while people may have an idea of what liability is, they may not know all the ins and outs of it. So, this Pleading Ignorance discusses liability and some of the forms of liability. Sound exciting? You bet it is!

Legal liability refers to a party’s legal responsibility for an act or omission. If that party fails to meet its legal obligations, it could be open to a lawsuit for any damages that resulted from a failure to meet those obligations. Hence (to use another fancy word) we say that the party is liable. By the way, it’s a “party” and not a “person” because a company or other entity can be held liable as well—not just a person.

Lawsuits involving liability must prove three things:

• That the defendant had a duty to the plaintiff
• That the defendant failed to fulfill the duty, and
• That the failure to fulfill the duty resulted in damages to the plaintiff.

Fail to prove all three and you’ve failed to prove liability.

For example, Stephen is driving a car and fails to stop at a red light. While in the intersection, he hits the car Sandra is in, which had the right of way. Sandra is injured in the accident. Sandra can argue that…

• Stephen had a duty of care to the other drivers on the road—including to Sandra
• Stephen’s duty of care was breached when he failed to stop at the red light, and
• Because Sandra was injured in the car accident she can prove that Stephen’s failure to meet his duty of care caused her injuries.

All three answered, so it’s sounding like Stephen’s pretty liable.

So you’ve got the gist of legal liability. But recently, there have been mentions in the news of joint and several liability.

Huh?

Joint and several liability are when more than one party share a legal obligation. In joint liability, all parties are liable up to the full amount of the obligation. It’s the “we’re all in this together, baby” form of liability. And the easiest way to understand joint liability is to take an example most folks are familiar with—a married couple taking out a joint loan. Let’s say that after signing on the dotted line, cash in hand, the husband decides to take off. The wife is still left holding the bag—she can be held liable—for the full amount of the loan. Not cool.

From a lawsuit perspective, when dealing with joint liability, both (and joint can mean more than just two liable parties) liable parties are equally charged, and equally accountable if the decision is in the plaintiff’s favor.

In several liability, there may be several parties that are liable, but unlike with joint liability, their individual liability is separate from one another. This is the “hey, I didn’t order the extra glass of wine so I’m not paying as much” way of divvying up the liability tab. Bottom line is each party winds up being responsible for only a part of the total liability. For example, in certain types of loans each party is only responsible for their portion of the loan. If one party fails to meet its obligations, the other parties still only have to pay their share—they are not responsible for the person who could not make up his share.

Now, you when it comes to lawsuits, you typically see joint and several liability involved in negligence cases. Often, an initial lawsuit is filed against a particular party or company—however, in the course of the proceedings, it may become apparent that a second party (or more) was also liable. The other liable parties would then need to be sued—creating “several liability”—by the initial defendant and a portion of the damages would be paid by each liable party. The idea of joint and several liability has come under fire because it can lead to a snowball effect of lawsuits whereby the initial defendant may in turn go after other responsible parties (i.e., sue them) in an attempt to have them share the liability—and the damages. It becomes the initial defendant’s only way to recoup some of what they’re being asked to cough up in damages.

So, that explains liability. Got questions about other legal terms? Let me know—and see our post Legalese & Legal-speak: 10 for 2010 where we discuss damages, statute of limitations and fraud. 

Tags: Joint Liability, Liability, Pleading Ignorance, Several Liability

This was posted on Wednesday, March 17th, 2010 at 1:16 pm and is filed under Pleading Ignorance . Feel free to respond, or trackback. Read our comments policy.