concurring in part and dissenting in part.
I concur with the majority except on one point. I dissent from the conclusion that the trial court committed *423prejudicial error by advising the jury that plaintiff had settled with the hospital.
Before the trial began, plaintiff filed a motion in limine, supported by a memorandum of law. Those documents showed that plaintiff originally had joined Good Samaritan Hospital and Medical Center (hospital) as a defendant, that plaintiff had settled with the hospital and dismissed the hospital from the case. Plaintiff’s motion requested that the court order that no reference be made to the settlement, the dismissal of the hospital, or that the hospital had been a defendant in the case.
Before the trial began, there was an extensive discussion between the judge and the lawyers. Defendant wanted to put the settlement in evidence; plaintiff wanted nothing to be said concerning the settlement. Relying on a Court of Appeals decision, Yardley v. Rucker Brothers Trucking Co., 42 Or App 239, 600 P2d 485 (1979), the trial court decided to inform the jury of the settlement.
After the jury was empaneled, the trial judge informed the jury that plaintiff already had reached a settlement with the hospital. The judge told them:
“I want to instruct you there has been a settlement between the plaintiff and Good Samaritan Hospital, and Good Samaritan is no longer in this case.
“Now, jurors, what is important is that you are not to infer from the settlement that the defendant Dr. Irish is or is not liable to the plaintiff. The settlement does not change the legal issues between these parties. It has nothing to do with your function. You’re simply being informed of that so you understand why Good Samaritan Hospital is not involved in the case at this stage.”
At the end of the trial, before the jury retired, he again instructed the jury:
“You are not to infer from the settlement that the defendant Dr. Irish is or is not liable to plaintiff. * * *
“I further instruction [sic] that if your verdict is for the plaintiff, and you find that the plaintiff has been damaged, you are to return a verdict for the full amount of plaintiff s damages. Do not reduce the amount of plaintiffs damages, if any, by reason of the settlement.”
*424The majority holds that those instructions constitute reversible error. To reach that result, the majority must conclude (1) that the instruction constituted error; (2) that the error substantially prejudiced the plaintiff; and (3) that the court’s other instructions did not cure the prejudice.1
The majority relies on two cases that clearly are distinguishable. In Roe v. Warren, 243 Or 373, 413 P2d 610 (1966), the court held that it was error to admit evidence that the plaintiff intended to sue a third party. Fenton v. Aleshire, 238 Or 24, 393 P2d 217 (1964), was a wrongful death action in which, during argument to the jury, defense counsel stated that the plaintiffs had the option to bring a separate action in the future for pain and suffering. The court held this to be error. In both Roe and Fenton, the defendants, by informing the jury that each plaintiff had possible future claims for more damages, was attempting to persuade the jury to limit the plaintiffs’ award of damages. The present case is distinguishable on at least two grounds: The jury was informed about a past settlement, not a possible future claim. And, second, the purpose of informing the jury about the prior settlement was to avoid jury confusion,2 not to suggest that the jury limit its award of damages.
I recognize that a jury instruction concerning a plaintiff’s prior settlement may be, in many instances, unfairly prejudicial to a party. In other instances, however, such an instruction may clarify for the jury the murky world of tort law without unfair prejudice to either party. In order to fashion a workable rule, the court should not rely on inap-posite case law. The majority has stated a proposition: “[I]n the usual case, it is not proper to inform the jury * * *, unless that information has independent relevance.” 316 Or at 414. That provides little guidance to trial court judges who must *425decide whether to instruct a jury concerning a plaintiffs settlement with a third party.
I believe that a workable rule should repose some discretion in the trial court judge to decide when an instruction about a prior settlement is appropriate. Two cases from Vermont are instructive. In Slayton v. Ford Motor Co., 140 Vt 27, 435 A2d 946, 947 (1981), the court stated:
“We declare it to be the policy of the Court henceforth that where there has been a liquidated settlement between one of several defendants and a plaintiff * * * the jury not be informed of such fact, or the sum paid * *
Five years later, the Vermont Supreme Court recognized that its holding in Slayton was too broad. In Sampson v. Karpinski, 147 Vt 315, 515 A2d 1066 (1986), the plaintiff sued three defendants in a product liability action when he drank a bottle of beer filled with lye. Plaintiff settled with the retailer, but the retailer remained a party to the action to pursue its indemnification claim against the manufacturer. The court instructed the jury that a verdict had been directed against the retailer, but that the retailer was remaining as a party for indemnification purposes. The trial court, relying on Slayton, refused to instruct the jury about the plaintiffs settlement with the retailer. The Vermont Supreme Court held this to be reversible error, reasoning:
“By directing a verdict against defendant [retailer] in the manner that it did, the court in effect told the jury that plaintiffs story was true. Further, the court’s cautionary instruction as to the limited effect of the directed verdict did little to minimize the prejudicial impact of the statement. * * * The issue of plaintiffs credibility was thus effectively removed from the jury’s consideration, to the inevitable prejudice of [the other defendants].” 515 A2d at 1069.
The Sampson court held that “the trial court is in the best position in a given case to determine whether, on the circumstances before it, prejudice is more likely to occur by informing the jury of the fact of settlement or by excluding it from its consideration.” Id. at 1070.
In Sampson, the Vermont Supreme Court recognized that, on occasion, failure to instruct the jury about a settlement may result in substantial prejudice to one of the parties. The court therefore gave discretion to the trial court *426judge to determine when it is necessary to inform the jury about a settlement. I agree with that approach.
The case at bar involves a situation that frequently arises in tort cases. The plaintiff has a claim against two or more persons who are alleged to be joint tortfeasors. The plaintiff settles with one or more of them, leaving the remaining tortfeasor or tortfeasors in the case. When, if ever, should the jury be advised that the plaintiff has settled with one or more persons who are alleged to be joint tortfeasors?
In the abstract the answer is clear. In application, the answer may be not so easy. The correct answer is along these lines: If it is likely that the jury would speculate about the absence of the settling party, and the speculation likely would prevent either or both sides from receiving a fair trial, and if it is likely that the speculation would be eliminated or reduced by an instruction to the jury, the trial court, in its discretion, should appropriately instruct the jury.
When, then, is it likely that the jury would speculate about the claim of a plaintiff against an absent third person, so as to prevent either or both parties from receiving a fair trial? Under what circumstances is it likely that either side would be prejudiced in the absence of an instruction?
The Vermont case cited above, Sampson v. Kar-pinski, is a good example. There, all tortfeasors were before the court, and the plaintiff had settled with the retailer. The trial court properly advised the jury of the fact that the plaintiff had settled with the retailer because the directed verdict against the retailer, in effect, told the jury that the plaintiffs story “was true.” 515 A2d at 1069. There, the unfairness to the nonsettling defendants was patent.
That is not the case here. The hospital was out of the case and, so far as the jury was concerned, had not been sued. Is it likely that the jury would speculate to anyone’s prejudice concerning the absence of the hospital as a defendant? Nothing in the record tells us much one way or the other. Defendant argues that, in the absence of an instruction, the jury might tend to find liability where none otherwise existed. That argument assumes that juries do not follow instructions. Plaintiff argues (and the majority concludes) that, by telling the jury that plaintiff had settled with the hospital, the *427court “ ‘plant[ed] in the jury’s mind the idea that they should allow no damages.’ ” 316 Or at 415 (quoting Fenton v. Aleshire, supra, 238 Or at 28). That argument also assumes that the jury would not and did not follow the trial judge’s repeated instructions that the settlement did not change the legal issues, and that the jury should not “reduce the amount of the plaintiffs damages, if any, by reason of the settlement.”
The vice of either position is obvious. Both arguments are based on the premise that juries do not follow instructions. Therefore, both positions are flawed, for juries are presumed to follow the court’s instructions. DeMaris v. Whittier, 280 Or 25, 31, 569 P2d 605 (1977); Fulton Ins. v. White Motor Corp., 261 Or 206, 223, 493 P2d 138 (1972). In Fulton Ins., the trial court erroneously instructed the jury. The court noted that a second instruction was given that negated the error, and concluded that there was no prejudice because “[w]e must presume that the jury followed the court’s instructions.” 261 Or at 223. In the present case, regardless of that presumption, the instruction concerning the settlement was quite easy for the jury to follow, given that no clear inference can be drawn from the fact of a previous settlement. Even if the trial court committed error by instructing the jury regarding plaintiffs settlement with the hospital, prejudice to plaintiff is doubtful given the court’s other instructions.
I maintain that the proper rule is this: In cases involving a plaintiffs claim against two or more alleged joint tortfeasors, if the plaintiff has settled with one or more of the claimed joint tortfeasors and only the nonsettling tortfeasor remains in the case, the trial judge should say nothing about the settlement to the jury unless the record shows that it is likely that the jury would speculate about the absence of one or more parties in the case, to another party’s prejudice. That might arise in a variety of ways. One might be that a witness, theretofore adverse to the plaintiff, now is in league with the plaintiff because of a settlement; or it might be shown that a witness’ testimony has changed because of the settlement. If it is demonstrated that the settlement may have affected the witness’ testimony, it may be proper to receive evidence of the *428settlement and instruct the jury accordingly, in language similar to the instruction given here.
This is not the occasion to speculate further as to the cases in which an instruction appropriately might be given. Here, the trial judge was advised, by plaintiff, of the settlement, and the trial judge concluded that it would be better to advise the jury of the settlement, as he did. I agree with the majority that it would have been better had the trial judge not done so. I disagree, however, that the error was prejudicial.
In the first section of its opinion, the majority correctly concluded that
“there was no evidence in this case that the operating room nurses were defendant’s agents or employees and, thus, no evidentiary support for giving plaintiff’s requested jury instructions on vicarious liability.” 316 Or at 413.
If defendant could not be vicariously liable, the only remaining theory of liability in plaintiffs amended complaint is that defendant ‘ ‘fail[ed] to check and determine that all sponges * * * were removed.” We must determine, therefore, whether the instructions concerning plaintiffs settlement with the hospital made the jury less likely to find that Dr. Irish failed to check and determine that all sponges were removed; or, stated otherwise, more likely to conclude that even if Dr. Irish breached his duty to plaintiff, the jury nonetheless found for him because of the court’s instruction. The majority concludes:
“In this case, the jury could have been encouraged to conclude that plaintiff had been compensated fully for the claimed injury and thereby could have been distracted from the appropriate line of analysis.
“After examining the entire record of the trial, we are convinced that the errors, considered cumulatively, were prejudicial. The ‘natural tendency [of the court’s statement and instruction] was to plant in the jury’s mind the idea that they should allow no damages,’ Fenton v. Aleshire, supra, 238 Or at 28, because plaintiff already was compensated for her loss. Accordingly, we hold that plaintiff is entitled to a new trial.” 316 Or at 415.3
*429The instructions given emphatically and convincingly negate that conclusion. The court instructed the jury “not to infer from the settlement that the defendant Dr. Irish is or is not liable to the plaintiff’ and that, “if your verdict is for the plaintiff, and you find that the plaintiff has been damaged, you are to return a verdict for the full amount of plaintiffs damages. Do not reduce the amount of plaintiff s damages, if any, by reason of the settlement.” The majority apparently believes that the jury disregarded the court’s instructions and decided to find defendant not liable even though it believed that he was liable.
I believe that the jury system works best when speculation is minimized. The trial judge apparently concluded that it was likely that the jury would speculate about the role of the hospital and its employees in plaintiffs injury had no instruction been given. The trial judge was within permissible bounds of discretion in instructing the jury as it did.
If an erroneous instruction does not cause prejudice, it does not require reversal. U.S. National Bank v. Boge, 311 Or 550, 566, 814 P2d 1082 (1991); ORS 19.125(2) (“No judgment shall be reversed or modified except for error substantially affecting the rights of a party.”). OEC 103(1). provides that “[ejvidential error is not presumed to be prejudicial.”
The majority’s analysis is cursory at best. Even under the majority’s independent relevance standard, *430plaintiff was not prejudiced by the jury instructions, and I would reverse the decision of the Court of Appeals. Thus, as to the second part of the opinion, I respectfully dissent.
ORS 19.125(2) provides that “[njo judgment shall be reversed or modified except for error substantially affecting the rights of a party. ’ ’ An erroneous instruction should not be reversed unless it causes prejudice. U.S. National Bank v. Boge, 311 Or 550, 566, 814 P2d 1082 (1991).
The trial court, in ruling on plaintiffs motion to prevent mention of the settlement, stated:
' T understand from your file material here, that the nurses made a sponge count and reported correct to the surgeon, obviously a jury’s going to wonder why the hospital’s not involved in the case * * *.”
The majority compounds its error by relying on Honeywell v. Sterling Furniture Co., 310 Or 206, 797 P2d 1019 (1990). There, punitive damages were awarded to *429the plaintiff following instructions from the trial court to the jury that the punitive damages award would be distributed
“ ‘as follows: First, the attorney for the prevailing party shall be paid the amount agreed * * *; secondly, one-half of the remainder shall be paid to the prevailing party; third, the other half of the remainder shall be paid to the Criminal Injury [sic] Compensation Account * * ” 310 Or at 209.
The defendant appealed. This court affirmed a Court of Appeals order of reversal, saying:
“We agree with the Court of Appeals that the potential effect of the instruction was to ‘[permit] a jury to consider as a part of its deliberations on punitive damages that a plaintiff should receive a certain amount of money and, in order to ensure that he does, to add additional amounts to pay for attorney fees and contributions to the Criminal Injuries Compensation Account.’ ” Id. at 211.
The vice of that instruction is clear. The instruction potentially affected a jury’s punitive damages award, based on the distribution of damages. In light of the instructions given by the trial court in this case, I fail to see how its instruction affected the award in this case.