Appendix 1

Terms of reference

Review of the Joint and Several Liability Rule

The Government has asked the Law Commission to review the application of the joint and several liability rule in New Zealand.

Where two or more parties are liable for the same loss or damage to another party, because of separate wrongful acts, the joint and several liability rule holds both or all of the wrongdoers 100% liable for the loss caused . The party who suffered the loss can claim against one wrongdoer to recover the whole of the loss. That defendant can then seek contribution from any other wrongdoers.

The Law Commission will consider whether the rule should be retained, replaced or amended, either generally, or in relation to particular professions or industries, including the building and construction industry, auditors and accountants.

The Commission will consider the key advantages and disadvantages of different forms of liability, including:

joint and several liability;
proportionate liability;
liability capped by statute; and
contractual limitations on liability.