Rhode Island Amends its Contribution Statute, R.I. Gen. Laws § 10-6-1 et seq., Eliminating Set-Offs for Jury Apportionment
On July 14, 2021, the Rhode Island General Assembly passed P.L. Ch. 21-411 (21-H 5560), which dramatically changed the state’s rules regarding the effect of joint-tortfeasor releases.
Under the newly amended statute, a release, whether given before or after judgment, reduces the claim against other tortfeasors in the amount of consideration paid for the release. R.I. Gen. Laws § 10-6-7. The prior statute in place for decades, provided that a joint-tortfeasor release reduced the total claim by the greater of the consideration paid for the release or the proportion by which the release provides that the total claim shall be reduced. See, R.I. Gen. Laws § 10-6-7 (repealed). This sea change may have been foreshadowed by the 2006 amendment to the statute enacted in response to the Station Nightclub fire tragedy that resulted in the deaths of 100 people and injuries to over 200 others. At that time, the statute was amended to provide that, in circumstances involving a single occurrence in which twenty-five or more persons died, a release simply reduced the claim by the amount paid for the release. R.I. Gen. Laws § 10-6-7 (REPEALED).
The statutory language reducing claims by the proportionate share of a settling defendant’s liability has long been the target of the plaintiffs’ bar. Under the prior statutory language, plaintiffs’ attorneys were required to negotiate a settlement approximating the likely proportionate share to be assigned to the tortfeasor with whom the plaintiff is negotiating. The new statute relieves plaintiffs’ attorneys from the consequences associated with any misjudgment when making that calculus.
The statutory changes shall have the most dramatic effect on defendants perceived as having little liability but with the “deep pockets” necessary to satisfy any judgment. The effect is best illustrated by example.
Assume a verdict of $100,000. Defendant A settles prior to trial for $10,000. The jury, however, assigns Defendant A 90% of the liability and Defendant B 10%. Under the prior statute, the verdict would be reduced by Defendant A’s proportionate share of liability, that being greater than the amount paid for the release, assuming, of course, that Defendant A took a release with the required pro rata or proportionate share language. See, Augustine v. Langlais, 402 A.2d 1187, 1188 (R.I. 1979). Defendant B would be liable for a $10,000 judgment, a result mirroring the jury’s determination of liability. Under the current statute, however, the verdict against Defendant B would only be reduced by the amount Defendant A paid for the release. Defendant B, deserving of a 10% share of the liability as determined by the jury, is saddled with a verdict of $90,000.
In addition, the amended statute provides that a settling tortfeasor is immune from claims for contribution. See, R.I. Gen. Laws § 10-6-8. This feature was absent from the prior statute, thereby requiring that the plaintiff and settling defendant negotiate a resolution mirroring as closely as possible the likely jury verdict.
While the statute has yet to be interpreted by the Rhode Island Supreme Court, it appears to permit defendants that did not settle and have paid more than their pro rata share to pursue contribution claims against unsettled co-defendants who failed to pay their proportionate share. See, R.I. Gen. Laws § 10-6-3 – 10-6-4. These provisions may offer some solace to “deep pocket” defendants that have paid a full judgment to seek recompense from others.
The Public Law provides that the statute takes effect upon passage and applies to all “claims” pending at the time of passage or asserted thereafter. 2021 Rhode Island Laws Ch. 21-411 (21-H 5560). The word “claims” suggests that the statute goes beyond any litigated case currently filed. The Public Law did, however, exclude its effect from releases executed before July 14, 2021.
Ultimately, plaintiffs involved in multi-party litigation stand to benefit from the new statute. Plaintiffs’ counsel can now resolve cases with defendants who clearly bear the brunt of liability without fear of having struck a poor bargain. The statute shifts the risk of bargaining from the parties who negotiated the settlement to non-settling co-defendants whose liability may bear little resemblance to the risk created by the new law. At the same time, it deprives those same defendants of a fair hearing on the ultimate issue and renders the jury’s verdict as to apportionment of fault little more than advisory.