Opinion ID: 1199154
Heading Depth: 3
Heading Rank: 2

Heading: Promoting Settlement

Text: We note initially that neither the Settlement-First Formula nor the Fault-First Formula is perfect in promoting settlement. See, e.g., Annotation, Comparative Fault: Calculation of Net Recovery by Applying Percentage of Plaintiff's Fault Before or After Subtracting Amount of Settlement by Less Than All Joint Tortfeasors, 71 A.L.R. 4th 1108 (1989) (cases adopting both the Settlement-First Formula and the Fault-First Formula). The Settlement-First Formula, for example, encourages plaintiffs to settle with one/some defendants but not all defendants. This action is encouraged because a plaintiff who settles with one/some defendants but not all defendants has the opportunity to recover more damages than those to which the jury has determined he is entitled. In this case, for example, Shelby will recover a total of $370,000 under the Settlement-First Formula: $250,000 from General and $120,000 from Action. This amount is $175,000 more than the $195,000 in damages Action caused to Shelby. Although the Settlement-First Formula is imperfect because it encourages plaintiffs to settle with one/some but not all defendants, the Fault-First Formula is even less perfect because it encourages defendants not to settle at all. The Fault-First Formula encourages this result because a defendant who refuses to settle may escape liability entirely if the plaintiff receives all to which the jury determines he is entitled from the settling defendant(s). In this case for example, Action would escape liability entirely under the Fault-First Formula because it would not be required to pay the $195,000 in damages that the jury determined Action caused to Shelby. In addition, the Fault-First Formula encourages plaintiffs to forego settlement opportunities with less than all joint tortfeasors. If, as occurred in this case, the jury sets damages at or below the amount the plaintiff has already received from a settling defendant, the plaintiff has wasted his time and money proceeding to trial against the remaining defendant even if the jury assigns fault to the remaining defendant. In sum, we candidly recognize that neither the Settlement-First Formula nor the Fault-First Formula is perfect in promoting settlement. On balance, however, we believe that the Settlement-First Formula, which encourages settlement (albeit only partial settlement), promotes settlement more than the Fault-First Formula, which actually discourages settlement. We believe that this result is consistent with the general legislative goals behind the legislature's adoption of the uniform contribution provisions in UCATA.