Jointly and Severally
What Does Jointly and Severally Mean?
The phrase "jointly and severally" describes a partnership or group in which each individual shares equal legal responsibility. Jointly and severally is sometimes called joint and several liability.
This form of liability is typically relevant in tort claims of negligence, in which a plaintiff seeks damages from any of the defendants regardless of their share of the liability.
What's the Difference Between Jointly and Jointly and Severally?
When two or more parties can be held liable for the same liability, they can be held jointly, severally, or jointly and severally liable.
The legal term "jointly" differs from "jointly and severally." When individuals have "joint liability," each party has equal responsibility and is liable for the full amount of action as stipulated by their contract.
In "several liability," each party is responsible for their individual obligation as specified by their contract.
However, with “joint and several liability,” one or more parties share specific responsibilities or separately share the same responsibility outlined in the contract.
What Is an Example of Jointly and Severally?
For example, if two people apply for and receive a bank loan under a jointly and severally agreement, the bank has the right to pursue either person for the entire outstanding balance. The person who repays the entire loan may be able to pursue a legal claim against the other individual, but they may do so only after the full amount has been repaid to the bank.
The term "jointly and severally" may also come up in employment liability cases. For example, if a construction worker breaks a pipe in a house, the homeowner and employer might be held jointly and severally liable for the damages, depending on state law.
Joint and several liability cases often come into play when multiple parties are responsible for causing injury or harm, including the following:
- Motor vehicle accidents
- Medical negligence
- Defective products
- Injuries on property
In the motor vehicle accident example, if two drivers in an accident are both responsible for the injuries of a third party, they may be held jointly and severally liable, depending on state law.
State laws on joint and several liability
Seven states –Alabama, Delaware, Maryland, Massachusetts, North Carolina, Rhode Island, and Virginia– have pure joint and several liability laws on their books. Other states vary in how they handle liability cases; many states follow a hybrid rule.
Arguments Against Joint and Several Liability
Some people argue that joint and several liability is unfair. For example, they say that it would be wrong for someone who is only 10 percent responsible for the repayment of a loan to be held accountable for the entire balance.
An alternative to the rule of joint and several liability is the rule of proportionate liability. With the proportionate liability system, a defendant found by a jury to be 20 percent responsible for a plaintiff's injury would be required to pay no greater than 20 percent of the final settlement amount.
Helpful Resources:
Cornell Law - Joint and Several Liability
Corporate Finance Institute - Jointly and Severally
Forbes Advisor - What Is Joint And Several Liability?
What Does Jointly and Severally Mean?
The phrase "jointly and severally" describes a partnership or group in which each individual shares equal legal responsibility. Jointly and severally is sometimes called joint and several liability.
This form of liability is typically relevant in tort claims of negligence, in which a plaintiff seeks damages from any of the defendants regardless of their share of the liability.
What's the Difference Between Jointly and Jointly and Severally?
When two or more parties can be held liable for the same liability, they can be held jointly, severally, or jointly and severally liable.
The legal term "jointly" differs from "jointly and severally." When individuals have "joint liability," each party has equal responsibility and is liable for the full amount of action as stipulated by their contract.
In "several liability," each party is responsible for their individual obligation as specified by their contract.
However, with “joint and several liability,” one or more parties share specific responsibilities or separately share the same responsibility outlined in the contract.
What Is an Example of Jointly and Severally?
For example, if two people apply for and receive a bank loan under a jointly and severally agreement, the bank has the right to pursue either person for the entire outstanding balance. The person who repays the entire loan may be able to pursue a legal claim against the other individual, but they may do so only after the full amount has been repaid to the bank.
The term "jointly and severally" may also come up in employment liability cases. For example, if a construction worker breaks a pipe in a house, the homeowner and employer might be held jointly and severally liable for the damages, depending on state law.
Joint and several liability cases often come into play when multiple parties are responsible for causing injury or harm, including the following:
- Motor vehicle accidents
- Medical negligence
- Defective products
- Injuries on property
In the motor vehicle accident example, if two drivers in an accident are both responsible for the injuries of a third party, they may be held jointly and severally liable, depending on state law.
State laws on joint and several liability
Seven states –Alabama, Delaware, Maryland, Massachusetts, North Carolina, Rhode Island, and Virginia– have pure joint and several liability laws on their books. Other states vary in how they handle liability cases; many states follow a hybrid rule.
Arguments Against Joint and Several Liability
Some people argue that joint and several liability is unfair. For example, they say that it would be wrong for someone who is only 10 percent responsible for the repayment of a loan to be held accountable for the entire balance.
An alternative to the rule of joint and several liability is the rule of proportionate liability. With the proportionate liability system, a defendant found by a jury to be 20 percent responsible for a plaintiff's injury would be required to pay no greater than 20 percent of the final settlement amount.
Helpful Resources:
Cornell Law - Joint and Several Liability
Corporate Finance Institute - Jointly and Severally
Forbes Advisor - What Is Joint And Several Liability?