Because a tort plaintiff in Illinois is entitled to only one satisfaction for an injury, the state’s Joint Tortfeasor Contribution Act (the Act), 740 ILCS 100/0.01, et seq., provides that a settlement from one defendant reduces the amount that the plaintiff may recover from another defendant:

Against this statutory backdrop, the Illinois Appellate Court recently addressed whether a settlement payment made pursuant to a high-low agreement entered into during trial must be set off against a jury verdict, even where the jury ultimately finds the settling defendant not liable. In a decision favorable to the civil defense bar, the court answered that question in the affirmative.

Factual and Procedural Background
In Thompson v. Centegra Management Services, Inc., 2026 IL App (2d) 240667, the appellate court held that a settlement payment made under a high-low agreement reduces the judgment against a non-settling defendant pursuant to section 2(c) of the Act, notwithstanding a jury verdict exonerating the settling defendant.

Plaintiff brought a medical malpractice action against Centegra Management Services (Centegra), an operator of urgent care facilities, and Dr. Nirav Shah and McHenry Radiologists (collectively the Shah defendants). Plaintiff alleged that her husband went to a Centegra urgent care facility with complaints of pain in his back and lower abdomen. An abdominal CT scan was performed, which included views of decedent’s abdominal aorta. Dr. Shah reviewed the CT scan and noted in her report that there was no aortic aneurysm. Plaintiff’s husband was discharged with a diagnosis of high blood pressure, and died the next day of an abdominal aortic aneurysm. Plaintiff alleged medical negligence, including a failure to diagnose the aneurysm. Id., ¶¶5-7.

The case proceeded to trial. During jury deliberations, plaintiff and the Shah defendants entered into a high-low agreement providing that the Shah defendants would pay plaintiff $950,000 if they were found not liable and $1.95 million if they were found liable.

The jury ultimately found Centegra liable and the Shah defendants not liable, awarding $2,920,575 in damages. Centegra moved post-trial for a setoff of $950,000 under section 2(c) of the Act. The trial court denied the request. Id., ¶¶16-26.

Appellate Analysis
The appellate court reversed, holding that section 2(c) required a setoff of the Shaf defendants’ $950,000 payment. The court’s analysis proceeded in two steps.

The court first concluded that the high-low agreement qualified as a settlement under section 2(c) of the Act.

The court next addressed whether the Shah defendants were “liable in tort” within the meaning of section 2(c), notwithstanding the jury’s verdict in their favor.

Because section 2(a) states “even though judgment has not been entered against any or all of them,” its phrase “liability in tort” has been held to mean “potential tort liability determined at the time of the plaintiff’s injury.” Id. at ¶41 (italics in original). Section 2(c) of the Act must be interpreted the same way.

Accordingly: “[T]he only reasonable interpretation of section 2(c)’s phrase ‘liable in tort’ is an interpretation consistent and harmonious with the interpretation of section 2(a)’s phrase ‘subject to liability in tort.’ That is, both phrases refer to a defendant’s potential liability in tort determined at the time of the plaintiff’s injury. Under this interpretation of section 2(c), the Shah defendants were liable in tort, as Dr. Shah provided medical services for [plaintiff’s decedent], including examination of a CT scan of [decedent’s] aorta, the day before [decedent’s] aorta ruptured.” Id. at ¶43.

Rejection of Plaintiff’s Limiting Arguments
The appellate court rejected plaintiff’s argument that section 2(c) applies only where the settling defendant is an “actual tortfeasor” rather than one merely potentially liable.

“This court has long held that section 2(c) of the Act does not require proof that settling co-defendants were actual tortfeasors, as this would thwart the mandated purposes of the Act and the policy against double recovery.” Id. ¶42 (citation omitted).

The court further explained that, “[m]ost settlements covered by section 2(c) will occur before a factfinder’s determination of liability. To interpret ‘liable in tort’ to require actual proof of liability would necessitate additional, and likely extensive, judicial hearings to determine a settling defendant’s liability, significantly reducing judicial economy, and would generally frustrate the legislative intent to prevent double recovery.” Id.

The appellate court also rejected plaintiff’s argument that high-low agreements should be exempted from section 2(c) altogether. “High-low agreements, like the one in this case, are simply a form of a settlement agreement anticipated by the Act, which are negotiated before a verdict or finding to hedge the risks of the settling parties. We see no reason to deviate from the clear legislative intent that settlements by a joint tortfeasor may be set off from the judgment against a non-settling tortfeasor, consistent with the principle in Illinois permitting a plaintiff only one recovery for an injury. The fact that the Shah defendants were found not liable after entering the high-low agreement is immaterial; what is material is that the $950,000 low payment was part of a negotiated settlement with plaintiff for [decedent’s] wrongful death.” Id. at ¶44.

Practice Considerations: Drafting and Characterization of High-Low Agreements
Thompson also offers guidance for practitioners confronting high-low agreements in multi-defendant cases. Plaintiff argued that the Shah defendants’ payment of the agreement’s low amount should not be set off the judgment because it was a payment “based on a conditional contract, not on tort. That is, when the jury found the Shah defendants not liable, their liability in tort under the Act was extinguished, leaving only their contractual liability.” Id. at ¶50. The appellate court rejected this argument as follows:

In light of Thompson, plaintiffs entering high-low agreements may attempt to draft agreement language characterizing low-end payments as something other than settlement of the tort claim, such as attorney fees or litigation costs, to avoid a section 2(c) setoff. While Thompson may be the first word on this issue, it is unlikely to be the last.