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

 

Water, Pests, Erosion...: Commissioner Releases Mixed Report Card On Environment

The Parliamentary Commissioner for the Environment has released a mixed report card in her assessment of the state of New Zealand’s environment. “We are lucky to live in an exceptionally beautiful country, but we have some big issues to face up to” said Dr Jan Wright. More>>

ALSO:

Education: Private Schools Beneficiaries Of Extra Cash

“Not only did this year’s Budget freeze operational funding for state schools, but 86 per cent of secondary school principals say they don’t get enough funding, and the demand for school donations from parents is rising at 10 times the rate of inflation... Now we’ve got Hekia Parata proposing more cash for private schools." More>>

ALSO:

Gordon Campbell: On The Shewan Inquiry Into Our Tax Haven Rules

Like the political equivalent of lithium, Prime Minister John Key is routinely administered to dull any politically dangerous mood swings amidst the general public... More>>

ALSO:

Law Commission: Review Of Search And Surveillance Act Begins

“For example, the Act was drafted before cloud-based storage of data was commonplace. In the light of these and other developments, the Commission will be examining whether the investigative powers in the Act are sufficient for law enforcement purposes. We will also consider whether the safeguards that surround those processes are adequate.” More>>

ALSO:

Houses, Campers And Cops: LGNZ Media Briefing

At their quarterly media briefing today Local Government New Zealand addressed areas where local authorities are feeling pressure and outlined their approach for the upcoming local body elections in September-October. More>>

ALSO:

17 Year Sentences In Baby Moko Case: Attorney General On Plea Bargain

“The Crown’s decisions in this case, including the decision to accept the manslaughter pleas, were motivated by the need to secure convictions for this horrendous killing and to avoid the significant risk that either of the defendants could escape such a conviction because of evidential issues.” More>>

ALSO:

As Govt Cuts Lobby Anti-Smoking Group Funds: On The Nation - Plain Packaging Debate

Imperial Tobacco leaves open possibility of law suit against New Zealand government if plain packaging is introduced, as planned. Says it’s a “last resort” but “of course we will defend the right to use our brands”. More>>

ALSO:

No Rail For New Harbour Crossing: National Giving Up On Rail In Auckland

The National Government’s decision to scrap two planned rail lines in Auckland shows it is giving up on a city-wide rail network in Auckland, and on thousands of commuters who sit in traffic jams every single day, the Green Party said today. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news