Where two or more persons are liable in respect of the same liability, in most common law legal systems they may either be:

• jointly liable
• severally liable
• jointly and severally liable

Joint liability

If parties have joint liability, then they are each liable up to the full amount of the relevant obligation. So if a husband and wife take out a loan from a bank, the loan agreement will normally provide that they are to be "jointly liable" for the full amount. If one party dies, disappears or is declared bankrupt, the other remains fully liable. Accordingly, the bank can sue one, or other, or both, for the full amount. But in suing, the creditor only has one course of action, i.e. they can only sue for each debt once. If, for example, there are three partners, and the creditor only sue two of them for the outstanding loan amount and could not recover the full amount,he cannot recover the remaining amount from the partner who is left out in the lawsuit.

Several liability

The converse is several liability, where the parties are liable for only their respective obligations. A common example of several liability is in syndicated loan agreements, which will normally provide that each bank is severally liable for its own part of the loan. If one bank fails to advance its agreed part of the loan to the borrower, then the borrower can only sue that bank, and the other banks in the syndicate have no liability.

Joint and several liability

Joint and several liability is a hybrid of both; with respect to the claimant, the parties are jointly liable, but as between obligors themselves, the liabilities are several. This means that if the claimant pursues one party, and receives payment in full, that party can then pursue the other obligors for a contribution to their share of the liability.

Joint and several liability is most relevant in tort claims, whereby a plaintiff may recover all the damages from any of the defendants regardless of their individual share of the liability. The rule is often applied in negligence cases, though it is sometimes invoked in other areas of law. In the United States, forty-six of the fifty States have a rule of joint and several liability, although in response to tort reform efforts, some have limited applicability the rule.

Criticisms of joint and several liability

Joint and several liability is premised on the theory that the defendants are in the best position to apportion damages amongst themselves. Once liability has been established and damages awarded, the defendants are free to litigate amongst themselves to better divide liability. The plaintiff no longer needs to be involved in the litigation and can avoid the cost of continuing litigation.

Defenders of the principle of joint and several liability further argue that it protects victims from being undercompensated if one of the defendants can not pay his or her share of proportionate liability.

Opponents of the principle of joint and several liability note that its use (instead of proportionate responsibility) has led to absurdly unfair results. The classic example is the uninsured drunk driver who injures someone; the plaintiff will sue both the insolvent drunk driver and the state highway department (or automobile manufacturer), hoping to hold the latter 1% or 2% responsible yet forcing them to pay the entire award. Joint and several liability, reform supporters argue, leads to lawyers searching for "deep pockets" to sue (in the expectation that they will settle rather than risk trial), even though those defendants may only be remotely related to an incident.