In 1979 the Illinois Legislature enacted the Joint Tortfeasor Contribution Act (“JTCA”). 740 ILCS 100/2. The goal was to promote 2 policies: encouraging tortfeasors to settle disputes and equitable apportionment of damages among tortfeasors.
It’s a complicated law – mostly because its brief and does not give a lot of direction. It also affects other joint liability statutes in Illinois. Below I give some highlights of the JTCA.
The Act itself really only has one requirement: that the settlement be made in “good faith.” 740 ILCS 100/2 (c). The act does not define good faith, does not state what should be considered when making a good faith determination, and does not give guidelines to a court on whether a full evidentiary hearing is necessary to make this determination.
The Illinois Supreme Court has given the only guidance stating “a trial court should consider the totality of the circumstances surrounding the settlement to make this determination. In re Guardianship of Babb, 642 N.E.2d 1195 (1994).
This standard enables the trial court to strike a balance between the public policy favoring the peaceful settlement of claims and the policy favoring the equitable apportionment of damages among tortfeasors. Associated Aviation Underwriters, Inc. v. Aon Corp., 800 N.E.2d 424 (Ill. 2003).
On the flip side, a settlement will not be found to have been made in good faith where there has been collusion, unfair dealing, or wrongful conduct by the settling parties. Babb, 642 N.E.2d 1195.
In addition, a settlement agreement that conflicts with the terms of the Contribution Act or is inconsistent with its underlying policies cannot satisfy the good-faith requirement. Dubina v. Mesirow Realty Development, Inc., 756 N.E.2d 836 (Ill. 2001).
A finding of good faith though is extremely beneficial to the settling tortfeasor. A settlement and the apportionment made in good faith relieves a settling party of any liability for contribution to the non-settling defendants. Babb, at 1198.
Other than the “good faith” requirement, the Act gives restrictions for when it applies, such as only when there exists a right of contribution among tortfeasors where one has paid more than their fair share of the liability. 740 ILCS 100/2(a), (b).
The JTCA also effects apportionment of fault at trial. Until 2008, Illinois courts could apportion liability among plaintiffs, settling parties, non-settling parties, and even non-parties. That changed in Ready v. United/Goedecke Services, Inc., 905 N.E.2d 725 (Ill. 2008).
Courts cannot apportion damages to settling parties anymore. To have a settling party be considered in apportionment of fault, the defendant must implead them as liable to the defendant for contribution. However, if the court made a finding the party settled in good faith, then they cannot be liable for contribution. That is the JTCA at work to promote settlement.