Can You contract out of the proportionate liability regime in Australia?
Contracting out of the proportionate liability regime is permitted in New South Wales, Western Australia and Tasmania. If appropriate, the parties could choose one of those jurisdictions as the law of the contract and include a clause contracting out of the proportionate liability regime.
When does a defendant rely on the proportionate liability defence?
Each concurrent wrongdoer must have legal liability to the plaintiff for a defendant to rely on a proportionate defence. [1] Selective pleading cannot generally avoid the operation of the proportionate liability regimes. [2] Some states permit parties to contract out of the proportionate liability regimes, while others do not. [3]
What is proportionate liability in commercial contracts?
Proportionate liability can apply in a broad range of commercial contracts. This includes products and services such as: commercial contracts. absolute or strict warranties or conditions in a contract. Contracting out is where parties to a contract agree between themselves that the proportionate liability legislation will not apply.
Do proportionate liability schemes apply to personal injury cases?
Proportionate liability schemes do not apply to personal injury actions. Each concurrent wrongdoer must have legal liability to the plaintiff for a defendant to rely on a proportionate defence.[1] Selective pleading cannot generally avoid the operation of the proportionate liability regimes.[2]
What does proportionate liability mean?
Proportionate Liability Regime In general terms, the effect of proportionate liability legislation is that each party to the claim is only liable to compensate the claimant for the proportion of the loss they were actually responsible for causing.
What is proportionate liability Australia?
The liability of a defendant who is a concurrent wrongdoer in relation to a claim is limited to an amount reflecting that proportion of the loss or damage claimed that the court considers just, having regard to the extent of the defendant's responsibility for the loss or damage: s 24AI(1)(a).
Does proportionate liability apply to personal injury?
While each separate piece of legislation differs in form, a number of general principles underlie them all. Proportionate liability schemes do not apply to personal injury actions.
Can you contract out of proportionate liability Qld?
To compound the uncertainty further, in Queensland (unlike most other state jurisdictions) section 7(3) of the CLA expressly prohibits parties from contracting out of the proportionate liability regime.
Can you contract out of proportionate liability legislation?
The proportionate liability legislation in New South Wales, Tasmania and Western Australia expressly permit parties to contract out of the proportionate liability regime.
Can you contract out of duty of care?
Such a duty cannot be discharged by delegating or transferring liability to another person or company. In other words, a non-delegable duty cannot be contracted out of.
What is jointly and severally liable?
Joint and several liability is a legal term for a responsibility that is shared by two or more parties to a lawsuit. A wronged party may sue any or all of them, and collect the total damages awarded by a court from any or all of them.
Is misleading and deceptive conduct Apportionable?
Each of the Commonwealth, State and Territory proportionate liability statutes provide that statutory misleading or deceptive conduct damages claims are apportionable claims.
What is Part 4 of the Civil Liability Act 2002?
Under Part 4 of the Civil Liability Act 2002 (NSW), courts apportion liability between concurrent wrongdoers in claims for economic loss or damage to property (not personal injury) arising out of actions for damages (such as for negligence or breach of contract).
What is an Apportionable claim?
The New South Wales legislation defines “apportionable claims” as follows: A claim for economic loss or damage to property in an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care, but not including any claim arising out of personal injury; or.
Can a plaintiff be a concurrent wrongdoer?
Concurrent Wrongdoers – the Plaintiff/Claimant has the risk of an insolvent wrongdoer. The Civil Liability Act 2002 (the Act) in New South Wales creates the concept of concurrent wrongdoers who may have several liability for a Plaintiff's loss in certain circumstances.
What is concurrent wrongdoing?
Section 11 of the Act defines a concurrent wrongdoer as “one of two or more people responsible to a plaintiff for the same damage”. Damage in this regard includes loss of property (including money), loss of life and personal injury.
What is jointly and severally liable?
Joint and several liability is a legal term for a responsibility that is shared by two or more parties to a lawsuit. A wronged party may sue any or all of them, and collect the total damages awarded by a court from any or all of them.
What is the Civil Liability Act QLD?
The Civil Liability Act 2003 (Qld) (Civil Liability Act) applies to claims for personal injuries and states the requirements for an action in negligence and the available defences. However, the following personal injuries are not included: work related injuries. dust-related injuries (asbestos, coal, silica)
What is Part 4 of the Civil Liability Act 2002?
Under Part 4 of the Civil Liability Act 2002 (NSW), courts apportion liability between concurrent wrongdoers in claims for economic loss or damage to property (not personal injury) arising out of actions for damages (such as for negligence or breach of contract).
Can a plaintiff be a concurrent wrongdoer?
Concurrent Wrongdoers – the Plaintiff/Claimant has the risk of an insolvent wrongdoer. The Civil Liability Act 2002 (the Act) in New South Wales creates the concept of concurrent wrongdoers who may have several liability for a Plaintiff's loss in certain circumstances.
Which state has the only law that prohibits contracting out of proportionate liability?
While most Australian states will allow parties to contract out of proportionate liability in commercial contracts where loss results from a ‘failure to take care’, Queensland, under section 7 (3) of the Civil Liability Act 2003 (Qld), is the only state which expressly prohibits this.
What is the law that states that a defendant must be held proportionately liable for a plaintiff's?
Under section 31 of the Civil Liability Act 2003 (Qld) a defendant who is a ‘concurrent wrongdoer’ must only be held proportionately liable for a plaintiff’s loss. This means that a plaintiff cannot sue and claim 100% of the damages from one individual party when numerous parties have been responsible for ‘multiple causes’ of the loss.
What is concurrent wrongdoing?
A concurrent wrongdoer is defined in s 30 of the Civil Liability Act as: a person who is 1 of 2 or more persons whose acts or omissions caused, independently of each other, the loss or damage that is the subject of the claim.
Why did the Civil Liability Act change?
The Civil Liability Act, however, changed this and instead placed an onus on plaintiffs under s 32 to bring an action for economic loss or property damage against all ‘concurrent wrongdoers’ in the same action. This was to reduce litigation and to avoid multiple proceedings in respect of the same loss.
Can a defendant escape proportionate liability?
A defendant cannot escape proportionate liability for a breach of contract that results in economic loss or property damage if the defendant owed a duty to take care to the plaintiff (usually an implied term of the contract). It is important for parties in commercial contracts to be aware that they may still be liable for a plaintiff’s loss due ...
Can you contract out of proportionate liability in Queensland?
While most states allow parties to contract out of the statutory proportionate liability regime, Queensland’s Civil Liability Act prohbits parties from making “express provision for their rights, obligations and liabilities under the contract” in relation to proportionate liability. It has been suggested that it may still be possible ...
Can a party be liable for a plaintiff's loss due to a breach of contract?
It is important for parties in commercial contracts to be aware that they may still be liable for a plaintiff’s loss due to a breach of contract pursuant to the proportionate liability provisions in the Civil Liability Act 2003 (Qld). This may apply even if a party can rely on an indemnity clause and an exclusion of proportionate liability has been drafted into the agreement to relinquish responsibility.
What does ‘proportionate liability’ mean?
The legislative schemes enable defendants to take advantage of a proportionate liability defence.
What are the pre-conditions required to use a proportionate liability defence?
Generally speaking, the following pre-conditions are needed in order to use a proportionate liability defence:
What is the defendant's liability?
The defendant’s liability is for harm consisting of economic loss, or loss of or damage to property, and (relevantly) not loss consequential upon personal injury. There is more than one wrongdoer (concurrent wrongdoers) who committed the wrongdoing from which harm arose.
Does proportionate liability apply to personal injury?
Proportionate liability schemes do not apply to personal injury actions. Each concurrent wrongdoer must have legal liability to the plaintiff for a defendant to rely on a proportionate defence. [1] Selective pleading cannot generally avoid the operation of the proportionate liability regimes. [2]
What is proportionate liability?
Proportionate liability enables the court to apportion the responsibility for a damages claim amongst each wrongdoer as the court considers fair. The legislation which governs proportionate liability varies in each State and Territory in Australia. It is not uniform in every jurisdiction.
How to have liability apportioned?
To have its liability apportioned, a defendant must also establish that other parties#N#are “concurrent wrongdoers” as defined by the applicable legislation. A defendant must identify other parties whose acts or omissions caused the loss or damage which is the subject of the claim and establish that the potential wrongdoer:
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Why do contract parties need to be careful when entering into and negotiating new contracts?
Contract parties need to be careful when entering into and negotiating new contracts that contain clauses which affect a party’s liabilities to ensure that they do not inadvertently contract out of the proportionate liability regime.
Can you indemnify one another on a basis that does not reflect proportionate liability?
They can also agree to indemnify one another on a basis does not reflect proportionate liability principles. In order to contract out of the proportionate liability regime, parties are required to allocate liability under the contract between them in a manner inconsistent with the normal operation of the regime.
Where is contracting out of proportionate liability allowed?
Contracting out of the proportionate liability regime is permitted in New South Wales, Western Australia and Tasmania. If appropriate, the parties could choose one of those jurisdictions as the law of the contract and include a clause contracting out of the proportionate liability regime. However, if parties seek to manufacture ...
What is the High Court's decision in Selig v Wealthsure?
In May, the High Court's decision in Selig v Wealthsure [2015] HCA 18 clarified the reach of the proportionate liability regime.
What is the practical implication of the decision in Selig?
One practical implication of the decision in Selig is that plaintiffs can avoid the operation of the proportionate liability regime by also pleading and providing non-apportionable claims.
What is section 29 and 30?
Similarly under the Australian Consumer Law, sections 29 and 30 provide potential alternative causes of action for false and misleading representations about goods and services, and land, respectively. Those claims are non-apportionable and, like section 1041E in Selig, would result in 100% recovery if pleaded and proven as alternatives to an apportionable claim.
What do defendants need to know about the way in which cases against them are pleaded?
Defendants need to be keenly aware of the way in which cases against them are pleaded and carefully consider whether they are exposed to 100% of the liability and need to claim contribution from other wrongdoers. Further, if non-apportionable claims are pleaded but are ill-founded, defendants should consider the potential strategic benefit of a strike-out application.
Can proportionate liability be contracted out of?
in Queensland, unlike some States, proportionate liability cannot be contracted out of; this means that contractual indemnities from a counterparty who agrees to indemnify you against 100% of your loss may not be enforceable in certain circumstances; and.
Can a concurrent wrongdoer include alternative claims?
In the circumstances outlined above, it is likely that plaintiffs who want to avoid the operation of the proportionate liability regime (for example, because a concurrent wrongdoer is insolvent) will include alternative claims that are not apportionable.
What is proportionate liability?
While the scheme differs slightly between jurisdictions in Australia, generally proportionate liability applies to situations where two or more people/entities have, by their simultaneous but independent wrongful acts or omissions, caused a single instance of economic loss or damage to property (that is, not personal injury) which arises in the circumstances listed in the relevant legislation (for example damage arising as a result of a failure to take reasonable care) [1].
Which jurisdictions allow contracting out of proportionate liability?
Different jurisdictions have different approaches to contracting out of the scheme. New South Wales [2] [3], Tasmania and Western Australia expressly allow contracting out of proportionate liability).
What are the scenarios of limitation of liability and indemnity clauses?
The distributor may want to rely upon its limitation of liability and indemnity clauses in one of the following four scenarios: Scenario 1: the manufacturer sues the distributor for loss arising as a result of distributor's performance of the contract. Scenario 2: the distributor is sued by a third party for loss arising as a result ...
What is the limitation of liability clause?
The limitation of liability clause will generally limit the distributor's liability for loss and damage arising out of the distribution of the manufacturer's product. The indemnity clause will generally give the distributor the right to be indemnified by the manufacturer for any liability arising as a result of the performance ...
What is the scenario 3 of a distributor's contract?
Scenario 3: the manufacturer is sued by a third party for loss arising as a result of the distributor's performance of the contract; and
Do concurrent wrongdoers have to indemnify another concurrent wrongdoer?
On a plain reading of the provisions in the respective proportionate liability statutes under which concurrent wrongdoers are not required to contribute and/or indemnify another concurrent wrongdoer in respect of an apportionable claim, it would appear that contractual indemnities and limitations of liability are no longer effective to the extent that they require a concurrent wrongdoer to bear more than the liability apportioned to it by the court.
Does proportionate liability affect distributors?
Given that the distributor and the manufacturer are not "concurrent wrongdoers" in Scenario 1, the Proportionate Liability Scheme will not affect the distributor's ability to rely on the limitation of liability and indemnity clause in its contract in that scenario.
What is proportionate liability?
Where it applies, the proportionate liability regime replaces the common law rules of joint, several and joint and several liability with a system which requires liability for the loss to be apportioned between all the concurrent wrongdoers according to their respective responsibility for the loss. Each concurrent wrongdoer's liability is then limited to the amount of loss attributable to it.
What happens if you assume joint and several liability?
Note that if an insured party to a contract contractually assumes joint and several liability of an obligation to indemnify in respect of a claim which would otherwise be apportionable, it may be assuming a liability that would otherwise not have arisen at law. Most liability insurances will exclude protection for contractually assumed liability that would not ordinarily arise at law. Therefore, before contracting out in this way, parties should consider whether their insurers need to be aware of and accept this proposed risk allocation.
What is concurrent wrongdoing?
concurrent wrongdoer is generally defined broadly to include one of two or more persons whose acts or omissions caused, independently of each other or together, the loss or damage that is the subject of the claim.22 However, in Queensland and South Australia, the relevant persons must have acted independently of each other and not jointly.23
What is an apportionable claim?
An apportionable claim also includes claims for economic loss or damage in an action for misleading or deceptive conduct under designated State or Federal legislation (not limited to a failure to take reasonable care).15
What is the difference between South Australia and Queensland?
In Queensland, the regime only applies if there is a claim for economic loss or property damage “arising from a breach of a duty of care”.12 Whereas in South Australia, the regime only applies to liability in damages that arises under the law of torts or under statute or “for breach of a contractual duty of care”.13
What was the impact of the common law doctrine of joint and several liability on litigation decisions?
A consequence was a significant increase in insurance premiums for liability insurance (especially professional liability). While recommendations for reform were made as a result of that inquiry, they lay dormant until the collapse of the HIH Insurance Group in 2001, which provided the catalyst for change.
Can a defendant be required to apportion a concurrent wrongdoer?
The legislation in all jurisdictions (apart from South Australia) provides that a defendant against whom judgment is given as a concurrent wrongdoer in relation to an apportionable claim cannot be required to: