Legal Definitions - contribution bar

A contribution bar is a legal rule that prevents a defendant who is still involved in a lawsuit from seeking financial reimbursement (known as "contribution") from other defendants who have already reached a settlement with the plaintiff. Essentially, once a defendant settles with the plaintiff, they are protected from further claims for contribution by any co-defendants who choose not to settle and continue with the litigation.

In exchange for this protection, the non-settling defendant typically receives a reduction, or "credit," against any judgment the plaintiff might obtain against them. This credit is often based on the amount the settling defendants paid or their proportional share of fault, depending on the specific laws of the jurisdiction. The purpose of a contribution bar is to encourage settlements and provide finality for parties who resolve their disputes early.

Here are a few examples to illustrate how a contribution bar works:

• Example 1: Multi-Vehicle Accident

  Imagine a scenario where a pedestrian (the plaintiff) is injured in a complex accident involving three cars. The pedestrian sues Driver A, Driver B, and Driver C, alleging that all three drivers were negligent. Driver B and Driver C decide to settle with the pedestrian for a specific amount each to avoid the uncertainty and cost of a trial. Driver A, however, believes they were not at fault and chooses to proceed to trial. Due to a contribution bar, if Driver A is found liable to the pedestrian, Driver A cannot then sue Driver B or Driver C to make them pay a portion of that judgment. In return, Driver A would receive a credit against the total judgment, reducing the amount Driver A owes the pedestrian by the amounts Driver B and Driver C paid in their settlements.

• Example 2: Construction Defect Lawsuit

  A homeowner (the plaintiff) discovers significant structural issues in their newly built house and sues the General Contractor, the Foundation Subcontractor, and the Architect. The homeowner alleges that all three parties contributed to the defects through faulty work or design. The Foundation Subcontractor and the Architect decide to settle with the homeowner. The General Contractor, believing the issues were primarily due to the other parties' negligence, refuses to settle and proceeds to trial. A contribution bar would prevent the General Contractor from later suing the Foundation Subcontractor or the Architect for contribution if the General Contractor is found liable to the homeowner. Instead, the General Contractor would receive a credit against any damages awarded to the homeowner, reflecting the settlement amounts paid by the Foundation Subcontractor and the Architect.

• Example 3: Product Liability Case

  A consumer (the plaintiff) suffers an injury from a defective household appliance and sues the Manufacturer, the Distributor, and the Retailer of the product. The consumer claims that the product was defectively designed, improperly distributed, and negligently sold. The Distributor and the Retailer decide to settle with the consumer to avoid lengthy litigation. The Manufacturer, confident in the product's safety, chooses to go to trial. A contribution bar would mean that if the Manufacturer is found liable to the consumer, the Manufacturer cannot then seek contribution from the Distributor or the Retailer for a share of the damages. However, the Manufacturer would benefit from a credit against the judgment, reducing the total amount they have to pay the consumer based on the settlements made by the Distributor and the Retailer.