Govt to keep joint and several liabilty, tasks officials to look at tweaks

Wednesday 10th December 2014

The government plans to keep the existing rules governing how multiple defendants are treated in the legal system, though wants officials to have a look at certain areas to see if they need some tweaking.

Justice Minister Amy Adams tabled the government's response to the Law Commission's report 'Liability of Multiple Defendants' in Parliament today, and said the Crown agrees with the main recommendation of keeping the current rule of joint and several liability across the legal system. The issue arose from the leaky building saga through the early 2000's, where some stakeholders considered they had been unfairly targeted with having to pay more than their fair share because of the rules.

"Joint and several liability provides the best assurance that the plaintiff will be compensated for their loss," Adams said. "The rule means that when multiple defendants are found to have caused the same damage, each defendant can be obliged to pay out to the full amount of the loss suffered."

The Law Commission's report found joint and several liability provided the best assurance the plaintiff will be compensated for their loss, and that there was no sound evidence the proportionate liability would be more efficient for the wider economy.

Building and Housing Minister Nick Smith said building consent authorities are often seen as the defendants with the deepest pockets and "are therefore shouldering an unfair financial burden for damages costs if other liable defendants are absent or insolvent."

While the government plans to retain the rule, it has asked officials to see whether targeted amendments are needed, and is considering capping liability for building consent authorities, who do not enter the market voluntarily, and auditors, who need to remain competitive.

Officials have also been asked to consider relief for a minor defendant, and supplementary contributions, Adams said.

The Ministries of Justice and Business, Innovation and Employment have been tasked to analyse the value and potential impact of the recommended changes, and are to report back by the end of next year.

BusinessDesk.co.nz

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