New York Law (NYLE) Practice Exam

When one defendant in a negligence action settles, what happens to the remaining defendant?

1. Is also released from liability

2. Receives the benefit of the greater of their proportionate share of liability or the amount the settling defendant paid

3. Receives the benefit of the lesser of their proportionate share of liability

4. May seek contribution from the settling defendant

The correct answer is: Receives the benefit of the greater of their proportionate share of liability or the amount the settling defendant paid

In a negligence action, when one defendant settles with the plaintiff, the remaining defendant benefits in a specific way that reflects their liability for the damages. The key aspect is that the remaining defendant receives the benefit of either their proportionate share of liability or the amount paid by the settling defendant, whichever is greater. This principle is designed to encourage settlements and ensure that defendants are not unfairly punished if another party has chosen to settle. In practical terms, this means that if the settled amount is less than the proportionate share of the remaining defendant’s liability, that defendant will not be held liable for more than they should be, as they will be credited with the amount paid by the settling defendant. Conversely, if the settled amount exceeds what the remaining defendant would be proportionately liable for, they will benefit from the settlement figure, ensuring they do not face financial exposure beyond what is fair based on the facts of the case. The other options do not accurately reflect the law governing settlements in negligence actions. For instance, simply stating that the remaining defendant is released from liability fails to recognize that they may remain liable for damages after a settlement. Similarly, seeking contribution or focusing solely on the proportionate share of liability without the context of what the settling defendant paid does not