Tort law (2022): Liability: Joint and several liability + Market share liability + Transferred intent

oint and several liability.

Where two or more persons are liable in respect of the same liability, in most common law legal systems they may either be:

jointly liable, or

severally liable, or

jointly and severally liable.

Joint liability.

If parties have joint liability, then they are each liable up to the full amount of the relevant obligation. So if a married couple takes a loan from a bank, the loan agreement will normally provide that they are to be "jointly liable" for the full amount. If one party dies, disappears, or is declared bankrupt, the other individual remains fully liable. Accordingly, the bank may sue all living co-promisors for the full amount.

However, in suing, the creditor has only one cause of action; for example, the creditor can sue for each debt only once. If, for example, there are three partners, and the creditor sues all of them for the outstanding loan amount and one of them pays the liability, the creditor cannot recover further amounts from the partners who did not contribute to the liability.

Several liability.

The converse is several or proportionate liability, where the parties are liable for only their respective obligations. A common example of several liability is in syndicated loan agreements, which will normally provide that each bank is severely liable for its own part of the loan. If one bank fails to advance its agreed part of the loan to the borrower, then the borrower can sue only that bank, and the other banks in the syndicate have no liability.

Joint and several liability.

Under joint and several liability or all sums, a claimant may pursue an obligation against any one party as if they were jointly liable and it becomes the responsibility of the defendants to sort out their respective proportions of liability and payment. This means that if the claimant pursues one defendant and receives payment, that defendant must then pursue the other obligors for a contribution to their share of the liability.

Joint and several liability is most relevant in tort claims, whereby a plaintiff may recover all the damages from any of the defendants regardless of their individual share of the liability. The rule is often applied in negligence cases, though it is sometimes invoked in other areas of law.

In the United States, 46 of the 50 states have a rule of joint and several liability, although in response to tort reform efforts, some have limited the applicability of the rule. About two dozen have reformed the rule, with several (Alaska, Arizona, Kansas, Utah, Vermont, Oklahoma, and Wyoming) abolishing. In some instances it is abolished except where the defendants "act in concert".