California Supreme Court Removes Impediment to Settlements

Up until recently, the plaintiff in a personal injury lawsuit in California ran a risk if he or she settled with only one of the people or companies that caused his or her injuries and but not others at the same time. An old rule derived from the Common Law created the danger that if a plaintiff settled with and released one defendant, that release would prevent her from recovering for economic damages (like medical expenses, lost wages, future medical care costs) from the other defendants. The rule was known as the “release rule.”

That old “release rule” has just been overturned by the California Supreme Court. In Ming-Ho Leung v. Verdugo Hills Hospital, the Supreme Court decided that the release rule is unjust and inequitable, and for that reason, it will no longer be followed in California. In Ming-Ho Leung, the injured person was a baby who suffered a serious brain injury. The Supreme Court determined that the child’s settlement with one of the defendants did not preclude him from recovering from the other defendant.
With this decision, the Supreme Court has corrected a long-standing problem: a rule that created an impediment to injured people trying to settle their cases.