Is it fair that if you are found to be 1% liable in a claim, the Plaintiff can still come after you for 100% of the bill?
Where judgment is given against concurrent wrongdoers in proceedings, each concurrent wrongdoer is liable for the whole amount of the damages. The Plaintiff is entitled to recover the whole amount from each wrongdoer.
Part III of the Civil Liability Act 1961, as amended, provides that concurrent wrongdoers are two or more wrongdoers who are all responsible to the Plaintiff for the same damage. It is crucial here that each of the Defendants are responsible for the same damage, regardless of how small that responsibility is. The focus is on the damage caused rather than the role of each of the Defendants.
Therefore, in practice, this means if you are found to be 1% liable as a concurrent wrongdoer, the Plaintiff is entitled to recover 100% of the damages from you alone. This is long known as the “1% Rule”. For example, you are one of two Defendants in a case and you only have a marginal role in what is seen as the cause of action, and the other Defendant has a primary role. The Plaintiff is awarded €3,000,000 in damages. Regardless of your marginal role, if judgment is made against you as a concurrent wrongdoer, you may have to foot the whole €3,000,000 bill if the other Defendant cannot pay up.
This, however, is subject to:
1. The Plaintiff cannot recover more than the total amount of damages awarded. Therefore, if the Plaintiff recovers 100% of the damages from you, this discharges the other concurrent wrongdoer from payment; and
2. Concurrent wrongdoers should be entitled to recover fair contributions from each other in the payment of the damages. The 1961 Act allows for a Defendant to claim for indemnity or contribution from the other concurrent wrongdoer(s). However, in most scenarios we see, the Defendant that you would be seeking contribution from is not a mark for recovery, i.e. does not have the means to pay the damages awarded. Therefore, although you might serve a Notice of Indemnity and Contribution, you may not go further than this so as not to waste further costs unnecessarily.
So in reality, if you have a marginal role in the subject matter of proceedings but you are a mark for recovery (due to your means) or have insurance, you can expect to be joined to proceedings. Even if you are not 1% liable, you could be a party to the proceedings on the chance that you will be somewhat liable and will make a contribution to settlement. We have had clients who are parties to proceedings where it is apparent that they are not concurrent wrongdoers and not liable. These clients still need to incur legal costs dealing with frivolous litigation. This can also impact their insurance premiums or ability to get insurance if they need insurance.
This was regularly seen in the fallout from the last recession. Construction professionals who had professional indemnity insurance were regularly Defendants in proceedings where the bankrupt or disappeared contractors were the primary cause of the loss. It might have been that an engineer or an architect, charging fees of less than €1,000, who was then the only viable Defendant left for claims for €500,000 or €5,000,000.
The rule increases exposure of Defendants who have means. Plaintiffs will without a doubt follow the money and pursue the Defendant who has it, regardless of their role in the damage caused. We have discussed this with many clients, all of whom say this rule is not fair. It is a difficult aspect of the law for our clients to accept but the reason for this rule is a matter of public policy.
The constitutionality of the rule was considered in the High Court in Iarnrod Eireann / Irish Rail v Ireland and the Attorney General  3 IR 321. The Court stated that the alternative would be that an innocent injured Plaintiff would be partially or wholly without remedy depending on the means of each of the concurrent wrongdoers.
Therefore, this well-established rule is necessary to protect and enhance a Plaintiff’s entitlement and ability to recover awarded damages to the full extent.
Jill Quigley is a solicitor in our Litigation team. For more on our legal services visit www.leman.ie.