The Joint Tortfeasor Contribution Act, 740 ILCS 100/0.01, et seq., codified the Illinois Supreme Court’s opinion in Skinner v. Reed-Prentice Division Package Machinery Co., 70 Ill. 2d 1 (1977), and created a right of contribution among joint tortfeasors. Since its inception, the Act’s application has been the subject of numerous Illinois appellate court and supreme court opinions. Despite this abundance of jurisprudence, many questions remain unanswered when addressing the competing interests covered by the Act.
The Interplay Between Good Faith Requirement and Confidential Settlements
One question that has not been addressed concerns the interplay between the good faith requirement of the Act and confidential settlements. Specifically, a conflict often arises between settling parties and a non-settling defendant when the settling parties refuse to disclose the terms and amounts of the settlement but nevertheless seek a good faith finding under the Act. This scenario places the trial court in the position of deciding whether to order settlement terms disclosed to the remaining defendants or to simply find the settlement in good faith based on the court’s in-camera review of the settlement terms.
The Burden of Proof Requires Disclosure
First and most importantly, a non-settling defendant must be given an opportunity to examine the settlement terms in order to determine whether to challenge the settlement or investigate the settlement further. The burden of challenging a good faith settlement rests with the non-settling defendant once the existence of a legally valid settlement agreement has been shown. It is illogical to require a non-settling defendant to prove by a preponderance of the evidence that the agreement is not in good faith when that defendant is not even given an opportunity to review the agreement or its terms.
Disclosure Advances Judicial Efficiency and Economy
In the interest of judicial efficiency and economy, settlement terms should be disclosed upon request of any non-settling defendant. The entry of a good faith finding necessarily means that the settling defendant will not be included on the jury verdict form. In other words, jurors will be unable to apportion any degree of fault to the previously-settled defendant (absent sole proximate cause). This result, of course, is problematic if the court failed to require disclosure of settlement terms at the good faith hearing.
Conclusion
In conclusion, a non-settling defendant is entitled to know the terms of any settlement for which a settling co-defendant and the plaintiff seek a good faith finding. There is no statutory or common law authority supporting an argument that a confidential settlement is privileged from disclosure to the other parties. Indeed, knowledge of a co-defendant’s settlement terms is critical to a non-settling defendant’s arguments against a good faith finding and is necessary to meet their burden. It is also helpful for a non-settling defendant’s subsequent exposure analysis and settlement approach. As a non-settling defendant, knowing the terms and amounts of prior settlements helps prevent your client from overpaying and diminishes the likelihood of a windfall for the plaintiff. In addition, knowing prior settlement terms could assist a non-settling defendant in showing bias or prejudice in trial testimony. Moreover, requiring disclosure of settlement terms helps to prevent and deter bad faith or collusive settlement arrangements.
