How do courts allocate responsibility when multiple parties contribute to the same harm?
The principle of proportionate liability refers to the legal rule that allows multiple parties (concurrent wrongdoers) to share the burden of rectifying damage or loss, based on their degree of fault. That is, instead of one party bearing full responsibility, the court determines how much each party should contribute according to their role in causing the harm.
In Pafburn v The Owners Strata Plan 84674 [2024] HCA 49, the High Court of Australia clarified the principle of proportionate liability in tort law for concurrent wrongdoers in the context of construction defects and economic loss claims under the Civil Liability Act.
In that case, the plaintiff sought damages from the developer and the head building contractor for economic loss resulting from defects caused by negligent construction work. The economic loss stemmed from a breach of the non-delegable duty imposed under sections 37(1) and 39 of the Design and Building Practitioners Act 2020 (NSW), which requires a person carrying out construction work to exercise reasonable care to avoid economic loss caused by defects in or related to the building arising from the construction work.
The High Court considered the question of whether the developer or the head building contractor could rely on the failure of another person to take reasonable care in carrying out construction work to limit their liability under Pt 4 of the Civil Liability Act 2002 (NSW). The court’s answer was no.
The High Court backed the Court of Appeal’s decision to uphold the view of the primary judge in the Supreme Court’s original decision, namely, that the subcontractors, manufacturers, installers and architects were not in fact “concurrent wrongdoers”, as the appellants had alleged. Why are those whose work physically enacted the harm not liable to pitch-in for damages?
The answer lies in the Civil Liability Act. Specifically, Division 7 of Pt IA of the CLA, s 5Q, provides for “liability based on non-delegable duty”. Whereby, the delegation of a task to another party does not in turn delegate the duty of care owed by the defendant onto that party. Such was the case for the appellants who, by the High Court’s determination, were unsuccessful in their aim to split the bill amongst their alleged list of responsible parties.
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