Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 


Joint And Several Liability Retainention Recommended

UNDER EMBARGO UNTIL TUESDAY, 24 JUNE 2014 2:00PM


MEDIA RELEASE 24 June 2014 Hon Sir Grant Hammond KNZM

President

Law Commission


Law Commission Recommends Joint And Several Liability Be Retained

In their Report, Liability of Multiple Defendants (NZLC R132), which was tabled in the House of Representatives today, the Law Commission recommends that the existing rule of “joint and several liability” be retained, with some modifications.

Joint and several liability provides that where two or more persons (defendants) are liable to a person they have harmed (claimant) for the same harm or loss, they are each individually liable for all the damages awarded for the loss.

The President of the Law Commission, Hon Sir Grant Hammond, comments:

“There are a number of alternatives to joint and several liability, and our review investigated them all, in detail. We concluded that none was sounder in principle, or more likely to produce better policy outcomes. For example, proportionate liability can deliver cost benefits to defendants, in some cases. But this could only be done by putting claimants at much greater risk of not achieving effective compensation. Joint and several liability’s emphasis on achieving compensation for wrongs makes it still clearly the best system.”

Problems arise under any liability system, when some persons cannot pay because they are missing or insolvent. The fundamental issue between joint and several liability and proportionate liability comes down to who should bear the risk of these non-paying defendants: the other liable defendants, or the claimant? The Commission’s clear view is that defendants should continue to bear this risk.

The main alternative rule is some form of proportionate liability. This approach involves allocating each liable defendant their share of responsibility for the loss and then making them liable to pay only that share. The difference is that if a defendant cannot pay their share, the claimant cannot recover that uncollected amount from other defendants, even though they all contributed to the loss.

Law Commissioner Hon Dr Mapp said:

“Under joint and several liability, costs are only borne by parties who have been held to be at fault – they are all liable for all the undivided damage they have caused. Defendants can reduce their liability costs by seeking contribution orders against other defendants. Defendants will sometimes bear higher liability costs because of missing defendants and uncollectable shares. However, the Law Commission considers that an exception should be made for minor defendants so that they do not bear the full impact of joint and several liability, in extreme cases.”

Discretionary relief for minor defendants

The Commission proposes a discretion to grant relief to such a minor defendant, to allow courts to do justice in particular cases. The discretion should be exercised rarely and within limits that balance the interests of the person who suffered the loss with the person who caused the loss.

Capped liability for local authority building consent authorities

Local authorities acting as building consent authorities can experience excessive liability because they become potential “deep pockets” for building negligence claims.

The Commission proposes caps on local authority liabilities from future residential building consents. The caps should make it possible for local bodies to insure against potential liability. The Commission recommends initial caps of: $300,000 for each claim relating to a single dwelling; and $150,000 per dwelling for claims from dwellings in a multi-unit complex, with a $3 million cap per multi-unit development. The caps are not retrospective and joint and several liability still applies, up to the cap.

Capped liability for some auditors

The Commission accepts that a trans-Tasman market exists for audit services for New Zealand’s largest and most complex entities. Major auditors in Australia, who now compete for large New Zealand audit assignments, have access to state-by-state capped liability schemes. This provides them with a potential competitive advantage over their New Zealand counterparts. The Commission therefore recommends a capping scheme on similar terms to those in Australia, to allow fair competition between New Zealand and Australian firms competing for large audits in New Zealand.

The Commission concluded that the case for capped liability for other professional advisers or service providers is not similar. The Commission does not recommend capping schemes for various professional groups in New Zealand, as currently exist in Australia.

ENDS

This media release and a pdf of the publication is available from our website at

http://www.lawcom.govt.nz/project/review-joint-and-several-liability

NZLC_R132_Media_briefing_UE.pdf

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

PARLIAMENT TODAY:

Missed Opportunities: Amnesty International Report Card On NZ's UN Role

As New Zealand steps down from its month as President of the Council, Amnesty International has taken the opportunity to review New Zealand’s role on the Council so far and assess their performance and contribution to protecting human rights worldwide. More>>

ALSO:

Prince Charles Get More Jobs: PM Announces Honorary Military Appointments

PM John Key has announced that Her Majesty The Queen has approved the appointment of HRH The Prince of Wales to three honorary positions: Admiral of the Fleet of the Royal New Zealand Navy; Field Marshal, New Zealand Army; Marshal of the Royal New Zealand Air Force. More>>

ALSO:

No TPP Deal: Gordon Campbell On Why We Should Still Oppose Investor-State Dispute Measures

Even in this dark hour for the TPP, the secrecy farce continues... What is left to hide? Every single negotiator went into those talks in Maui knowing exactly where everyone else stood. More>>

REACTION:

Salvation Army On Homelessness: Hard Times In West Auckland

The report details an uncomfortable story of people whose only option is to live an unhealthy, dangerous and damaging street life... The social housing needed by these people is not currently available in sufficient quantity. More social housing is required in the West. More>>

ALSO:

Message For PM: NZ Supports Te Reo Māori – You Should Too

As Māori Language Week celebrations and commemoration of 40 years draws to an end, the Māori Language Commission, Te Taura Whiri i te Reo Māori, is once again hugely encouraged by the widespread support for Māori language from throughout the country ... More>>

ALSO:

Arming Police: Frontline Police To Routinely Carry Tasers

"In making the decision, the Police executive has considered almost five years worth of 'use of force' data… It consistently shows that the Taser is one of the least injury-causing tactical options available when compared with other options, with a subject injury rate of just over one per cent for all deployments." More>>

ALSO:

Gordon Campbell: On D-Day For Dairy At The TPP

While New Zealand may feel flattered at being called “the Saudi Arabia of milk” it would be more accurate to regard us as the suicide bombers of free trade. More>>

ALSO:

Leaked Letter: Severe Restrictions on State Owned Enterprises

Even an SOE that exists to fulfil a public function neglected by the market or which is a natural monopoly would nevertheless be forced to act "on the basis of commercial considerations" and would be prohibited from discriminating in favour of local businesses in purchases and sales. Foreign companies would be given standing to sue SOEs in domestic courts for perceived departures from the strictures of the TPP... More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news