Nonparty Fault

Nonparty fault is a rule in some states that lets a jury assign a share of responsibility to people or companies who are not defendants at trial, such as companies that settled earlier or went bankrupt. The defendants at trial then pay only their own share, which can reduce what the injured person recovers.

Origin

Nonparty fault rules grew out of the shift from contributory negligence to comparative fault and the limits many states placed on joint and several liability, beginning mainly in the 1970s and 1980s. Each state decides by statute or case law whether nonparties can appear on the verdict form and how their shares are treated.

Significance in Asbestos Context

Asbestos cases often involve dozens of product makers, many of which went bankrupt and now pay through trusts. In states that allow it, a defendant at trial may ask the jury to assign fault to those bankrupt companies, which is sometimes called the empty chair defense. Because the plaintiff usually cannot collect the bankrupt companies' share from the trial defendant, a large allocation to nonparties can sharply reduce the verdict. This is one reason defendants seek discovery of a plaintiff's trust claims, and some states have passed trust transparency laws requiring those claims to be disclosed. States differ on whether nonparty fault is allowed at all, what evidence is needed to put a nonparty on the verdict form, and how settlements are credited.

Example Sentence

At trial, the remaining defendant asked the jury to allocate most of the fault to three bankrupt insulation makers whose trusts had already paid claims.

Related Terms

Joint and Several Liability, Comparative Negligence, Empty Chair Defense, Settlement Credit, Bankruptcy Trust Transparency, Bankruptcy Trust Claim

Notes

• Your lawyer will need a full list of every product and company you were exposed to, including bankrupt ones.
• Trust claims and lawsuit testimony should be consistent; tell your lawyer about any claims already filed.
• Rules differ by state, so where a case is filed can affect how fault is divided.