International Construction Law Review
THE “INSOLVENT CONTRIBUTOR” PROBLEM: CONSIDERING THE APPORTIONMENT OF LIABILITY IN CONSTRUCTION CASES*
Caitlin Moore
Pupil Barrister, Atkin Chambers
I. INTRODUCTION
To a commercial party facing the prospect of liability, the likely sum that they may be ordered to pay is of primary importance. Indeed, this sum informs parties’ assessment of their litigation risk and pursuit of out of court settlements. However, a single construction and engineering project will invariably involve multiple professionals, engaged directly or indirectly by the employer. Where other such professionals are liable for the same damage, parties can only make a useful assessment of the extent of their liability, if consideration is given to any contribution claims that may be brought.
The courts have developed an identifiable set of principles concerning the conditions triggering liability under the Civil Liability (Contribution) Act 1978 (“the 1978 Act”).1 Yet key to identifying the likely sums a party will be liable for is the approach that courts shall adopt towards apportioning liability. Notionally, apportionment appears a neat exercise, in which damages are sectioned and distributed by the slice. However, the commercial reality is less straightforward where one of the parties liable to make contribution is insolvent and not before the court. The risk of the insolvent contributor is highly probable in the context of the construction industry, yet the case law fails to provide principled guidance on how it should be allocated. The aim of the present discussion is to provide a solution as to how apportionment in such circumstances should be approached.
* The paper was highly commended in the Society of Construction Law’s Hudson essay competition and has been published by the SCL at www.scl.org.uk and is published here with the permission of the author and the SCL.
1 See, for example, Royal Brompton Hospital NHS Trust v Hammond and Others (No 3) (HL) [2002] UKHL 14; [2002] BLR 255; [2002] 1 WLR 1397; [2002] 2 All ER 801; 81 Con LR 1.
174