2006 Code of Virginia § 8.01-35.1 - Effect of release or covenant not to sue in respect to liability and contribution

8.01-35.1. Effect of release or covenant not to sue in respect to liabilityand contribution.

A. When a release or a covenant not to sue is given in good faith to one oftwo or more persons liable in tort for the same injury, or the same propertydamage or the same wrongful death:

1. It shall not discharge any of the other tort-feasors from liability forthe injury, property damage or wrongful death unless its terms so provide;but any amount recovered against the other tort-feasors or any one of themshall be reduced by any amount stipulated by the covenant or the release, orin the amount of the consideration paid for it, whichever is the greater. Indetermining the amount of consideration given for a covenant not to sue orrelease for a settlement which consists in whole or in part of future paymentor payments, the court shall consider expert or other evidence as to thepresent value of the settlement consisting in whole or in part of futurepayment or payments. A release or covenant not to sue given pursuant to thissection shall not be admitted into evidence in the trial of the matter butshall be considered by the court in determining the amount for which judgmentshall be entered; and

2. It shall discharge the tort-feasor to whom it is given from all liabilityfor contribution to any other tort-feasor.

B. A tort-feasor who enters into a release or covenant not to sue with aclaimant is not entitled to recover by way of contribution from anothertort-feasor whose liability for the injury, property damage or wrongful deathis not extinguished by the release or covenant not to sue, nor in respect toany amount paid by the tort-feasor which is in excess of what was reasonable.

C. For the purposes of this section, a covenant not to sue shall include any"high-low" agreement whereby a party seeking damages in tort agrees toaccept as full satisfaction for any judgment no more than one sum certain andthe party or parties from whom the damages are sought agree to pay no lessthan another sum certain regardless of whether any judgment rendered at trialis higher or lower than the respective sums certain set forth in theagreement and whereby such party provides notice to all of the othertort-feasors of the terms of such "high-low" agreement immediately aftersuch agreement is reached.

D. A release or covenant not to sue given pursuant to this section shall besubject to the provisions of 8.01-55 and 8.01-424.

E. This section shall apply to all such covenants not to sue executed on orafter July 1, 1979, and to all releases executed on or after July 1, 1980.This section shall also apply to all oral covenants not to sue and oralreleases agreed to on or after July 1, 1989, provided that any cause ofaction affected thereby accrues on or after July 1, 1989. A release orcovenant not to sue need not be in writing where parties to a pending actionstate in open court that they have agreed to enter into such release orcovenant not to sue and have agreed further to subsequently memorialize thesame in writing.

(1979, c. 697; 1980, c. 411; 1982, c. 196; 1983, c. 181; 1985, c. 330; 1989,c. 681; 2000, c. 351.)