216
Opinion of the Court
considerations may be more significant than stark hypotheticals persuades us that the pro tanto rule has no clear advantage in promoting settlements.24
The effect of the two rules on judicial economy is also ambiguous. The pro tanto rule, if adopted without the requirement of a good-faith hearing, would be easier to administer, because the relative fault 25 of the settling defendant would not have to be adjudicated either at a preliminary hearing or at trial. Nevertheless, because of the large potential for unfairness, no party or amicus in this suit advocates the pro tanto rule untamed by good-faith hearings. Once the pro tanto rule is coupled with a good-faith hearing, however, it is difficult to determine whether the pro tanto or proportionate share approach best promotes judicial economy. Under either approach, the relative fault of the parties will have to
24 An excellent discussion of the effect of the various rules on settlement is Kornhauser & Revesz, Settlement Under Joint and Several Liability, 68 N. Y. U. L. Rev. 427 (1993). After considering the effects of strategic behavior, litigation costs, and whether the probabilities of the defendants' being found liable at trial are "independent" or "correlated," they conclude that "neither rule is consistently better than the other." Id., at 492. In addition, in comparing the pro tanto and proportionate share rules, they generally assume that the pro tanto rule is implemented without good-faith hearings. Good-faith hearings, however, "mak[e] the pro tanto setoff rule relatively less desirable from the perspective of inducing settlements than the apportioned [i. e. proportionate] share set-off rule." Id., at 476. Moreover, the pro tanto rule contains a unique disincentive to settlement in cases, like this one, in which the settlement covers more items of damage than the litigated judgment. McDermott argued that the settlement covered damage both to the crane and to the deck, whereas the judgment against River Don related only to the deck. The Court of Appeals refused to apportion the settlement between deck damages and crane damages and to credit River Don only with that portion related to deck damages. 979 F. 2d, at 1080. This refusal to apportion will greatly discourage settlement, because parties like McDermott will be unable to recover their full damages if they settle with one party.
25 By referring to the relative fault of the parties, we express no disapproval of the lower courts' use of relative "causation" to allocate damages. See 979 F. 2d, at 1081-1082.
Page: Index Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 NextLast modified: October 4, 2007