When one defendant settles a New York personal injury or wrongful death case before trial, the GOL 15-108 settlement credit controls how much the remaining defendants owe on the verdict. Under General Obligations Law Section 15-108, the court reduces the plaintiff’s award against the non-settling defendants by whichever of three figures is largest: the amount stated in the release, the money actually paid, or the settling defendant’s equitable share of fault calculated against the total verdict.1New York State Senate. New York General Obligations Law GOB 15-108 – Release or Covenant Not to Sue
How the Credit Is Calculated
The calculation runs after the jury returns its verdict and assigns fault percentages. The court compares three numbers:
- the dollar figure written into the release,
- the consideration the plaintiff actually received, and
- the settling defendant’s percentage of fault multiplied by the total verdict (that defendant’s equitable share under CPLR Article 14).
The largest of the three is subtracted from the verdict. The release amount and the payment amount are usually identical, so in practice the live comparison is between the settlement payment and the equitable share.
A worked example: a jury awards $200,000 and finds the settling defendant 40% at fault. The equitable share is $80,000. If that defendant settled for $50,000 before trial, the court subtracts the larger figure, $80,000, from the verdict. The remaining defendants owe $120,000.
Reverse the numbers and the result reverses. If the same defendant paid $90,000 to settle but the jury assigns only 10% fault, the equitable share is $20,000. The court subtracts $90,000 because it is larger, and the remaining defendants owe $110,000.1New York State Senate. New York General Obligations Law GOB 15-108 – Release or Covenant Not to Sue
The mechanism protects non-settling defendants from absorbing fault that belongs to a party who already left the case. It also means the plaintiff bears the gap when a settlement comes in below the settling defendant’s eventual share of fault. The remaining defendants do not make up that difference.
What Counts as a Qualifying Settlement
Not every payment between a plaintiff and a defendant triggers the credit. Subdivision (d) of the statute sets three requirements:1New York State Senate. New York General Obligations Law GOB 15-108 – Release or Covenant Not to Sue
- The consideration must exceed one dollar. A token payment does not qualify.
- The release or covenant must completely or substantially terminate the dispute between the plaintiff and the settling party. A partial release leaving significant claims alive between the same parties may not count.
- The agreement must be executed before judgment is entered. A post-judgment deal falls outside the statute.
Both a full release and a covenant not to sue trigger the credit if those conditions are met. The document should identify the parties, state the settlement amount, and make clear that the plaintiff is discharging the settling defendant from liability tied to the incident. Vague drafting invites disputes from non-settling defendants over how the credit should be applied, or from the plaintiff over whether a qualifying settlement exists at all.
The Good Faith Requirement
Subdivision (b) requires that the release be given “in good faith” for the settling defendant to receive protection from contribution claims.1New York State Senate. New York General Obligations Law GOB 15-108 – Release or Covenant Not to Sue If the remaining defendants can show the settlement was collusive or structured to prejudice them, such as a sweetheart deal between related parties or a payment designed to shift fault unfairly, the settling defendant can lose the statutory shield.
Courts look at the totality of the circumstances: the relationship between the settling parties, how the payment compares to potential liability, and whether negotiations were conducted at arm’s length. A settlement reached through genuine adversarial bargaining will almost always survive challenge. Problems arise when the numbers look suspicious or when a pre-existing business or personal relationship could explain an artificially low payment.
What the Jury Hears About the Settlement
Nothing. CPLR 4533-b requires that evidence of a co-defendant’s settlement be presented outside the jury’s hearing. The jury decides total damages and allocates fault with no knowledge of any prior payment. The court then applies the GOL 15-108 credit after the verdict by deducting the appropriate amount from the award.2FindLaw. New York Civil Practice Law and Rules CPLR Rule 4533-B
Keeping the settlement confidential prevents jurors from reducing the award or adjusting fault to account for money the plaintiff already received. The credit is a post-verdict judicial calculation, not a trial issue.
Contribution Claims Are Cut Off in Both Directions
The statute’s core bargain is finality, and it runs both ways:
- Subdivision (b) shields a defendant who settles in good faith from contribution claims by the remaining defendants. No one can pull the settler back into the case to share the final judgment.1New York State Senate. New York General Obligations Law GOB 15-108 – Release or Covenant Not to Sue
- Subdivision (c) strips the settling defendant of its own right to seek contribution from anyone else. Finality is the trade: you get out, but you cannot turn around and pursue the remaining defendants for their share.1New York State Senate. New York General Obligations Law GOB 15-108 – Release or Covenant Not to Sue
Insurance carriers and self-insured defendants rely on this mutual cutoff to quantify their maximum exposure. Once the check clears and the release is signed, the file closes.
Indemnification Claims Still Survive
GOL 15-108 cuts off contribution. It says nothing about indemnification, and that silence matters. Contribution divides fault proportionally among wrongdoers; indemnification shifts an entire loss from one party to another based on a contract or a special legal relationship. New York courts have consistently held that both contractual and common-law indemnification claims survive a GOL 15-108 settlement.
The point surfaces often in construction cases, where general contractors and subcontractors routinely sign indemnification agreements. A subcontractor who settles with the injured plaintiff does not necessarily escape an indemnification claim from the general contractor. If you are settling a case with a hold-harmless agreement or a principal-agent relationship in the background, do not assume the release ends all financial exposure.
How the Credit Stacks with CPLR Article 16
Article 16 gives low-fault defendants a second layer of protection. Under CPLR 1601, a defendant found 50% or less at fault is only responsible for its own proportional share of non-economic damages such as pain and suffering, emotional distress, and loss of consortium. That defendant is not jointly liable for the full non-economic award.3New York State Senate. New York Civil Practice Law and Rules Law CPLR 1601 – Limited Liability of Persons Jointly Liable
When both reductions apply, the remaining defendant’s exposure shrinks from two directions at once. Consider a $300,000 verdict split evenly between economic and non-economic damages, with the remaining defendant found 30% at fault. Article 16 caps that defendant’s non-economic liability at $45,000 (30% of $150,000). The settlement credit then takes a further bite out of the economic portion, with the exact figure depending on the settlement amount and the settling defendant’s fault share. The plaintiff can collect substantially less than the headline verdict.
Plaintiffs’ counsel considering a partial settlement should model both reductions before accepting one defendant’s offer and proceeding to trial against the rest. A large settlement with a co-defendant who later draws most of the fault at trial can leave the remaining low-fault defendant owing a fraction of the jury’s number, with the plaintiff absorbing the rest.