Truck accident cases in Georgia often involve several defendants at once. A single collision may produce claims against the truck driver, the motor carrier, a broker, a maintenance contractor, and a parts manufacturer. When multiple defendants are sued, one of them sometimes reaches a settlement with the plaintiff while remaining in the lawsuit and continuing to participate in the trial against the other defendants. A settlement of this type is often called a “Mary Carter” agreement, named after a Florida case in which such an arrangement appeared. This article explains what these agreements are and how Georgia law treats them.
What a Mary Carter agreement is
A Mary Carter agreement is a settlement between a plaintiff and at least one defendant in a multi-defendant case that has several distinctive features. The settling defendant typically agrees to pay the plaintiff a set amount, but the settling defendant stays in the lawsuit as a named party and continues to take part in the trial. The amount the settling defendant ultimately pays often depends on the outcome of the case against the non-settling defendants. The more the plaintiff recovers from the other defendants, the less the settling defendant pays, and sometimes the settling defendant’s payment is reduced or eliminated by a large recovery against the others.
This structure changes the settling defendant’s incentives. Although still nominally a defendant, that party now has a financial interest in seeing the plaintiff win a large verdict against the co-defendants. The settling defendant may, in effect, become aligned with the plaintiff while appearing to the jury to be an ordinary opposing party.
The general legal status of these agreements
Settlement of claims is favored in the law, and parties are generally free to compromise disputes. A settlement agreement in Georgia is a contract and must satisfy the ordinary requirements of contract formation and enforceability, including a definite agreement on terms. There must be a true meeting of the minds for a settlement to be binding.
Some states have decided that agreements with the Mary Carter structure violate public policy and have prohibited or sharply restricted them. Other states permit them, sometimes with conditions. Georgia has not adopted a blanket statute declaring Mary Carter agreements void, and the structure is generally analyzed under existing contract and procedural law rather than under a specific named prohibition. Because Georgia treats settlement agreements as contracts, an agreement with these features is examined for the same formation and public policy issues that apply to any contract.
The central concern: jury awareness of the alignment
The primary danger of a Mary Carter agreement is that it can mislead the jury. If a settling defendant continues to sit at the defense table and present a defense while secretly hoping the plaintiff wins big against the co-defendants, the jury sees a courtroom alignment that does not reflect reality. The settling defendant might cross-examine witnesses or argue in a way that quietly helps the plaintiff, while the jury believes it is watching a genuine adversary contest.
For this reason, the major safeguard in jurisdictions that allow these agreements, and a concern Georgia courts share, is disclosure. Courts generally take the position that the existence and basic terms of a settlement that realigns a party’s interests should be disclosed so that the jury and the non-settling defendants understand the true posture of the parties. Disclosure allows the non-settling defendants to cross-examine the settling defendant’s witnesses about the financial incentive and allows the jury to weigh testimony with that incentive in mind. A trial court has discretion to manage how the agreement is presented and to prevent the arrangement from creating an unfair or confusing trial.
How settlement with one defendant affects the others
Apart from the disclosure issue, the settlement of one defendant has consequences under Georgia’s apportionment and damages rules. Georgia law directs that fault be apportioned among the parties, and a damages award against a defendant generally reflects that defendant’s share of responsibility rather than the entire harm. Georgia also follows a modified comparative negligence rule under O.C.G.A. 51-12-33, under which a plaintiff who is 50 percent or more at fault recovers nothing, and a plaintiff’s recovery is reduced by the plaintiff’s percentage of fault.
When one defendant settles, the remaining defendants are generally responsible for the share of fault assigned to them. The settlement amount paid by the settling defendant and the way Georgia apportionment rules treat that settlement affect what the non-settling defendants ultimately owe. The interaction between a particular settlement structure and the apportionment statute can be complex, and the precise effect depends on the terms of the agreement and the verdict.
Good faith and reasonableness
Because a Mary Carter agreement can be used to manipulate trial dynamics, courts examine whether the settlement was entered in good faith. A settlement designed primarily to distort the trial, conceal a party’s true alignment, or unfairly burden the non-settling defendants raises public policy concerns. Georgia courts evaluate settlement arrangements for fairness and may use their authority over trial procedure and evidence to prevent abuse. The trial judge can require disclosure, allow cross-examination on the financial arrangement, and craft jury instructions or evidentiary rulings to keep the trial fair.
Why the structure remains controversial
Supporters of these agreements argue that they allow a defendant to limit financial exposure and encourage settlement, which the law generally favors. Critics argue that the agreements create a hidden conflict, reward the settling defendant for helping the plaintiff, and place the non-settling defendants at a disadvantage by facing what looks like one opponent but is actually two. This tension is the reason courts focus heavily on disclosure and good faith rather than treating the agreements as ordinary settlements.
Summary
A Mary Carter agreement in a multi-defendant Georgia truck accident case is a settlement in which a defendant pays the plaintiff, remains in the case, and has a financial interest tied to the outcome against the co-defendants. Georgia analyzes such an agreement as a contract, subject to ordinary formation requirements and public policy review, and has not enacted a categorical ban. The dominant legal concern is the risk of misleading the jury about the settling defendant’s true alignment, which courts address through disclosure, cross-examination, good faith review, and the trial judge’s discretion over evidence and procedure. The settlement also interacts with Georgia’s apportionment and comparative negligence rules in determining what the non-settling defendants owe.
Disclaimer
This article is provided strictly for general educational and informational purposes. It is intended to explain how Georgia law works as a matter of public legal education, and it does not constitute legal advice, a legal opinion, or a recommendation about any particular course of action. Reading this article, or contacting the website on which it appears, does not create an attorney-client relationship between the reader and any law firm, attorney, or author.
The law changes over time. Statutes, regulations, court rules, and judicial decisions discussed here may have been amended, repealed, superseded, or reinterpreted after the date of publication, and citations to specific code sections or cases reflect the law only as it was understood when this article was written. The application of any legal principle also depends heavily on the specific facts and circumstances of an individual matter, and outcomes vary from case to case.
For these reasons, no one should rely on this article as a substitute for advice from a licensed Georgia attorney who can review the particular facts involved. The author and publisher make no warranty, express or implied, regarding the accuracy, completeness, timeliness, or applicability of the information provided, and disclaim any liability for any action taken or not taken based on this content.