Chapter 2
The current law

The operation of the rule of joint and several liability

2.7The joint and several liability rule gives rise to two major issues where there are multiple defendants. The first is the nature of the loss: whether the actions or omissions of the defendants give rise to a single indivisible loss, or whether the loss is separate or separable. As indicated above, the answer to this question determines whether joint or several liability will apply in a given case, or not.

2.8The second issue is the apportionment of the loss between the defendants. The rule of joint and several liability operates as between the plaintiff and the defendants, but further, distinct rules of apportionment operate between the defendants.

2.9To take an example, in building disputes there may be claims for defective design, poor workmanship, faulty materials and negligent council inspections, all of which contribute to structural failures within the building.

2.10The first question is whether there is a single loss. A defendant who has contributed to the overall problems in the completed building will be liable jointly and severally with other defendants who have also contributed to overall problems. However, a defendant who has caused a separately identifiable loss but has not contributed to the overall problems will be liable only for the directly attributable loss. An example would be a subcontractor who fails to properly secure the dining room window flashings, leading to a specific area of water damage, but which has no effect on the main rot problem that affects floors and walls at the other end of the house.

2.11It is only if the loss is all of the same character, or the actions of each defendant all contributed to the overall loss, that the defendants will be jointly and severally liable. If this is the case and one defendant is unable to pay, the remaining defendants will together pay the full amount. For example, if the building supply company has become insolvent, the architect, the builder, and the council will each be liable for the full amount, even though the materials used were a relevant factor in causing the loss.

2.12The second question is apportionment as between the defendants. Under the current law, this is not the concern of the plaintiff. If a plaintiff claims against one defendant only and that defendant considers that there are further liable parties, the defendant can either join these parties to the proceeding or make a separate claim for contribution after judgment is issued in the initial claim. The plaintiff must demonstrate that any defendant it seeks judgment against has caused the plaintiff’s loss, but the plaintiff is not required to explore the relative level of each defendant’s contribution or fault compared to other potentially liable parties. Indeed, the plaintiff may choose to sue only one defendant, and leave it to that defendant to decide whether they look to anyone else for contribution.

2.13The joint and several liability regime protects plaintiffs by providing that each person who has caused the loss is liable to fully compensate for the loss. If the plaintiff is unable to recover from one defendant, they can still recover the full amount from other defendants. The principled basis for this rule is the common law approach to causation: Each of the defendants has relevantly caused a single, indivisible loss suffered by the plaintiff, so each should be liable for that loss. The common law has held that the injured party should not bear the risk of absent or insolvent defendants. Instead, the Courts have allocated that risk to the parties found to have caused the plaintiff’s loss.