Net contribution clause under scrutiny
If more than one party is liable for the same damage, the common law assumes that they are jointly and severally liable for any loss. This means that any one of those parties can be sued for the whole of the loss.
The Civil Liability (Contribution) Act 1978 offers a right of recourse for parties by allowing a fair and equitable contribution to be recovered from the other party, in proportion to the amount of damage that party is actually liable for. In the construction industry, the net contribution clause is the weapon of choice, limiting the professional’s liability to a ‘fair share’ of losses suffered. However, a recent case demonstrates that although historically a vital risk management tool, these clauses are coming under the spotlight…
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