Risks of settling with one of multiple defendants

Many times, as a case progresses towards trial, one defendant may be more eager and willing  to settle the case than the other defendants. A plaintiff is then faced with a decision as to whether to settle with one defendant while taking the remaining defendant(s) to trial.

There will be several factors involved in such a decision, including whether the settling Defendant is making a fair offer in relation to the exposure of their liability (they may be only slightly liable versus the other defendants).There’s little doubt that it’s easier taking on fewer defendants at a trial, particularly if the settling defendant offers some assistance in trial, such as the offer of a witness to assist the plaintiff in exposing the other defendants of their culpability.

However, there are also significant risks in settling with one defendant over others. It will certainly change the landscape of the trial, and the remaining defendant(s) are likely to point the finger at the settling defendant as the most culpable and responsible party.  They will likely file a Notice of Non-Party Fault which will officially raise the “empty chair” defense.  It makes it difficult for the settling party to defend itself, since they settled out and are no longer in the case.

Further, depending on your jurisdiction, the remaining defendant(s) are entitled to a setoff if a verdict is found against them.  In almost all jurisdictions, the jury will be unaware of the previous settlement, and they will have no idea how their potential verdict will affect the amount of funds the remaining defendant(s) must pay.


For example, if the settling party paid $100,000 in settlement, the remaining defendant(s) will be entitled to a $100,000 setoff in the event they receive a verdict against them.  If the jury returns a $200,000 verdict, the remaining defendant(s) will only have to pay $100,000 since they received a $100,000 setoff.  If the jury returns a $100,000 verdict, they don’t have to pay anything.

Therefore, it’s imperative to consider all possible outcomes and all risks and benefits of settling with one defendant to the exclusion of the others.  For these reasons, it is imperative to hire a veteran trial lawyer who has experience in settlement negotiations and trial preparation.

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