i-law

International Construction Law Review

PROPORTIONATE LIABILITY—REFORM OR REGRESSION?

PROFESSOR DOUG JONES

AM, RFD, BA, LLM, FCIArb, FIAMA Head of Major Projects Group, Clayton Utz 1

1. INTRODUCTION

At common law, where a party suffers loss or damage due to the wrongful actions of another, the wrongdoer becomes liable to pay damages. Damages may arise in tort or contract law. An award of damages is compensatory, that is, it aims to restore the plaintiff as far as possible to the position it would have been in, but for the damage. This is achieved by shifting the cost of the loss from the plaintiff to the wrongdoer.
In cases where there is a single wrongdoer (except in some instances of tortious liability involving contributory negligence), the approach to liability is simple and uncontroversial: the wrongdoer is liable for 100% of the plaintiff’s loss, and the plaintiff bears the risk that the wrongdoer will turn out to be insolvent or otherwise unavailable and therefore unable to pay.
Commonly, however, the injury suffered by the plaintiff is caused by more than one wrongdoer. This is often the case in construction projects. For example, a builder (X) might defectively construct a house. In addition, the builder’s defective construction may have been able to be avoided by appropriate estimating, design or supervision by an architect or other professional (Y). Further, a local authority (Z) may have had responsibility for inspecting the construction, which inspection (if properly carried out) would have detected the defect. X, Y and Z have all acted independently of one another, but the ultimate outcome of the defective structure and the need for its rectification will represent a single loss suffered by the house-owner, or perhaps by a subsequent purchaser.
For the purposes of this paper, it is intended to refer to the types of conduct described above as the conduct of wrongdoers who have caused the loss or damage described.
Where two or more wrongdoers have caused the same loss or damage to the claimant, the traditional approach to determining their liability for damages has been to hold them jointly and severally liable, sometimes by


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Proportionate Liability—Reform or Regression?

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