Wednesday, April 4, 2012

Fair Share is Unfair, Protect Yourself

The legal concept of Joint and Several Liability was designed to protect victims and require those responsible for injuries to compensate those victims. The concept simply required that the victim be fully compensated for the damages sustained. When there were multiple at-fault parties, the victim could collect full damages from any one party and that party could seek reimbursement from the other at-fault parties. This concept, which I have described in its most elementary form, was developed by legal scholars throughout the United States and the Commonwealth of Pennsylvania over the past two hundred years. Nearly every legal scholar today firmly believes that it has served the people of the Commonwealth of Pennsylvania quite well.

Despite the opinions of nearly every legal scholar, the Pennsylvania Legislature and Senate decided, most likely under pressure from big insurance, to eradicate Joint and Several Liability. Governor Corbett, as one of his first acts, signed Senate Bill 1131 (Act No. 17) into law on June 28, 2011, dramatically changing Pennsylvania law with the stroke of a pen. What is the future for those injured in Pennsylvania when there are multiple at-fault parties? Some will face financial ruin. In many instances, the damage expenses, which would have been recovered from the at-fault parties, will now be passed on to all Pennsylvanians, as victims with unpaid medical bills will be forced to seek payment through the Department of Public Welfare. Therefore the expenses, no matter how great, will be passed on to all of the taxpayers. The result is the victim is not fully compensated, (possibly rendered insolvent), and an at-fault party avoids the responsibility of fully compensating the victim, instead passing the responsibility on to all Pennsylvania taxpayers.

Consider the following scenario:

A young girl from a poor family has been assaulted at a daycare center by a repairman called into the center to repair an electrical problem. The daycare center failed to investigate the worker, who was a convicted child molester. The offender assaulted the child. The child’s injuries will force her to undergo medical and psychological care for the rest of her life. The child’s parents sue the daycare center and the repairman/child molester. The daycare center has liability insurance of $100,000.00, while the repairman/child molester is uninsured. The jury awards a verdict of $100,000.00 to compensate the child for the medical expenses and the pain and suffering she has undergone and will undergo in the future. The jury allocated negligence at Ten (10%) Percent against the daycare center and Ninety (90%) Percent against the repairman/child molester. Under the “old Pennsylvania law,” the insurance company for the daycare center would be required to pay the verdict and seek contribution from the repairman/child molester. Under the current law, Act No. 17, the child would collect $10,000.00 from the daycare’s insurance company and the remainder of the verdict would remain uncollected as the repairman/child molester has no insurance and it is unlikely he would have any assets with which to satisfy the verdict. The cost for this child’s medical expenses, past, present and future, will most likely fall upon the taxpayers of Pennsylvania.

In the scenario outlined above, there is very little anyone can do to protect themselves from the inequities of Act No. 17 which has been inappropriately labeled by its supporters as “Fair Share Act.” However, in the area of automobiles and automobile insurance, I would urge everyone to carefully review their automobile insurance policy and, to the extent that they can afford it, increase their liability coverage and purchase underinsured and uninsured motorist coverage in an equal amount. I would also encourage everyone to stack their underinsured and uninsured motorist coverage, which means that the amount of coverage which they actually have would be multiplied by the number of vehicles that they own or, in many situations, are owned in their household.

I would also suggest that all consumers speak with their insurance representatives about the possibility of purchasing an umbrella insurance policy which would provide coverage and include in that policy underinsured and uninsured motorist coverage.

In a society where legislation is driven not by legal scholars by uninformed and misinformed legislators, an individual must avail himself or herself of all available protection.

-- James T. Davis, Esquire