A Mary Carter agreement settles with one defendant who remains a party at trial, with the settling defendant's liability reduced or eliminated by the recovery against remaining defendants. It creates an incentive for the settling defendant to assist the plaintiff.
Many states prohibit or restrict them.
Alternative Names:
Mary Carter, Gallagher Agreement
Why it Matters?
The structural problem is that a defendant appearing to contest liability actually benefits from a large verdict against a codefendant, which misleads the jury about the adversarial posture. States addressing the issue have either prohibited these agreements outright or required disclosure to the court and the jury. Discovering whether such an agreement exists is a standard inquiry where a codefendant's trial conduct seems inconsistent with its interests.
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Related terms
Frequently asked questions
What makes these agreements problematic?
How do states address them?
