Welcome to the Investors Trading Academy talking glossary of financial terms and events.
Our word of the day is “Joint and Several Liability”
When multiple parties can be held liable for the same event or act and be responsible for all restitution required. In cases of joint and several liability, a person who was harmed or wronged by several parties could be awarded damages and collect from any one, several, or all of the liable parties. The liable parties would be required to pay the entire damage award, which could be split among multiple parties or could come from just one party. Each party would be liable for part of the damages, or up to as much as all of the damages.
Joint and several liabilities differ from comparative fault, where the multiple parties would be assigned responsibility for a portion of the damages in relation to the percentage of fault that they bore for the harm.
In comparative fault, if the greatest percentage of harm comes from the least financially solvent liable party, this might leave the plaintiff in the position of seeking damages from an insolvent party.
By Barry Norman, Investors Trading Academy
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