An ADR procedure for loss allocation in a joint defense agreement

Abstract

AbstractSuccessful joint defense agreements require a procedure by which settlements or adverse judgments can be allocated among the participating defendants. Such agreements usually preclude inter‐defendant argument during the principal trial; as a result, neither a judgment nor the terms of a prudential settlement are useful as a guide to allocating the joint loss among the participants.Submitting claims (for contribution) to formal litigation after the principal trial defeats the purpose of the joint defense agreement vis‐a‐vis future plaintiffs. Hence the need for a private ADR (Alternative Dispute Resolution) procedure.The following pages outline an ADR procedure specially tailored to the needs of multi‐party or multi‐chemical toxic tort litigation. The components of the process are largely well known ADR techniques, supplemented by a novel science process that addresses the unique characteristics of the allocation problem in instances of scientific uncertainty or disputed scientific causality. The process is only partly binding; while it permits litigation as a last resort, it imposes sanctions on its use. The multiple‐defendant and often multiple‐chemical dimensions of the underlying litigation also call for practical groupings of interests, to keep the complexity of the process manageable. How those groups are assembled, when necessary, is a matter of negotiation in each case. Other selected features of the process are discussed in additional, although still brief, detail in these pages.