Professional Liability Guide

PROFESSIONAL LIABILITY GUIDE

Proportionate liability Proportionate liability limits a defendant’s liability to an amount reflecting what the Court considers fair, having regard to the extent of that party’s responsibility for the loss and damage, provided the plaintiff’s claims are apportionable. Proportionate liability schemes are contained in State and Territory legislation 179 in addition to the ASIC Act, the Corporations Act 2001 (Cth), and the CCA (collectively, the Commonwealth Acts ). Where liability is joint and several (opposed to proportionate), the usual practical outcome is that a deep-pocketed defendant may be exposed to the entirety of any award of damages even if that defendant’s conduct is a minor cause of the plaintiff’s loss. Conversely, under proportionate liability schemes, when there are impecunious, uninsured, insolvent or unidentifiable defendants satisfying certain criteria set up within the scheme, the plaintiff must bear the share of the loss attributable to those defendants. These schemes can therefore advantage defendants who may otherwise have been exposed to a disproportionate share of an award of damages, having regard to their involvement in the conduct giving rise to the claim. Some statutes allow the parties to contract out of the proportionate liability schemes. 180 Other jurisdictions are either silent (Victoria, Australian Capital Territory, Northern Territory, South Australia and the Commonwealth Acts) or, in the case of Queensland, expressly prohibit this practice. 181 ƒ the claim made against the defendant is an ‘ apportionable claim ’; and ƒ the defendant is a ‘ concurrent wrongdoer ’, and the relevant Act does not expressly exclude the defendant’s liability from being apportioned. Apportionable claims All State and Territory-based schemes, apart from South Australia’s, define ‘ apportionable claim ’ as a claim for damages for economic loss or property damage arising from a breach or a failure to take reasonable care (or in Queensland, a breach of a duty of care) in tort or contract, or for damages under the misleading or deceptive conduct provisions of each State and Territory’s consumer laws. 182 In South Australia, ‘ apportionable liability ’ is defined as property and economic loss, not including economic loss from personal injury, where two or more wrongdoers, who are not joint tortfeasors, commit a negligent and innocent wrongdoing. 183 While the schemes differ in various respects, proportionate liability will generally arise where:

In the Commonwealth Acts, apportionable claims are limited to claims for economic loss or property damage caused by misleading or deceptive conduct. 184

179 CLA (ACT); CLA (NSW); Proportionate Liability Act 2005 (NT) ( PLA (NT) ); CLA (Qld); CLA (Tas); Wrongs Act (Vic); CLA (WA); LRA (SA). 180 CLA (NSW) s 3A; CLA (WA) s 4A; CLA (TAS) s 3A. 181 CLA (Qld) s 7(3). 182 CLA (ACT) s 107B(2); CLA (NSW) s 34(1); PLA (NT) ss 3, 4(2); CLA (Qld) s 28(1)(a); CLA (Tas) s 43A(1); Wrongs Act (Vic) s 24AF(1); CLA (WA) s 5AI. 183 LRA (SA) s 3(2)(a). 184 CCA s 87CB(1); Corporations Act 2001 (Cth) s 1041L(1); ASIC Act s 12GP(1).

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