Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Law Commission sticks with joint and several liability

Law Commission sticks with joint and several liability

The Law Commission is strongly of the view that New Zealand should retain joint and several liability but has suggested some changes to make the system fairer for both sides.

The options
The big question for the Law Commission was whether to retain joint and several liability or recommend that New Zealand move to a system of proportionate liability.

Joint and several liability from the principle that all parties who contributed to a loss are each liable for the full amount of the damages awarded. The effect of this is that, if one party is insolvent or for any other reason unavailable to pay, the others may have to front up with the difference in order that the plaintiff can recover in full.

Proportionate liability used in a number of jurisdictions, including Australia. Under this rule, each liable defendant is apportioned a share of the total liability based on the court's assessment of their share of the responsibility or fault. No-one can be made to pay more than their share, meaning that the plaintiff carries the risk that there may be a missing liable party.

The Commission found that joint and several liability was "clearly the preferable system" but has recommended a number of adjustments to deliver fairer outcomes. Key among these are:

• giving the courts power to make orders that would mitigate the full application of joint and several liability where this would create a "clear injustice" to defendants who have only a minor responsibility. In such situations, the court would be expected to ensure that the plaintiff still receives an "effective remedy"

• changing the rules of contribution so that the costs of an uncollected share can be spread proportionately among the remaining solvent and liable defendants (currently a defendant which has been required to pay losses in excess of its share can chase up the others but they cannot be required to pay more than their allocated contribution)

• introducing liability caps for building consent authorities for new liabilities after the leaky home claims have been dealt with

• introducing to New Zealand a version of the capped liability schemes for auditors applying in almost all of the Australian States. It is anticipated that the capped scheme would apply only where a very large audit firm was exposed to a catastrophic loss.

Where now?
The Government has undertaken to respond to the recommendations early next year.


© Scoop Media

Business Headlines | Sci-Tech Headlines


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Health: New Zealand's First ‘No Sugary Drinks’ Logo Unveiled

New Zealand’s first “no sugary drinks logo” has been unveiled at an event in Wellington... It will empower communities around New Zealand to lift their health and wellbeing and send a clear message about the damage caused by too much sugar in our diets. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news