Chapter 1
The reasons for this review

The scope of this Report

1.15The principal question that this Report must answer is which, of joint and several liability and proportionate liability, is the appropriate rule for New Zealand today. We set out our analysis of the issues and consequent recommendation on this central point in Chapters 2 and 3. We provide a general answer and recommendation, applicable to all cases where liability of multiple defendants arises. We also give separate consideration to whether the features and needs of particular sectors require some individual treatment, in Chapters 6 to 8.

1.16The terms of reference require us to examine hybrid schemes, involving some mixture of elements of joint and several liability, proportionate liability, or some other arrangement, as well as arrangements for capping liability, either by contract or through statute. We deal with the possibility of hybrids in Chapter 4. Capping is discussed in Chapters 7 and 8 as part of our consideration of limitation of liability for building consent authorities, professional advisers and service providers. Capping is most relevant for these groups because it may mitigate the catastrophic loss risk, and reflects that capping is already a reality in Australia.

1.17We have also considered whether other adjustments could or should be made. In the building sector, we note the desirability of more comprehensive and effective building guarantee or warranty products, whether or not the liability rule changes. In the building sector it is also necessary to work through the implications for the liability of building consent authorities (local authorities) from changes to consenting rules and allocation of responsibility. The landscape for local authority liability in this area is changing and this should be clearly understood and consistently expressed in the relevant legislation.

1.18There are issues this Report was not intended to, and does not, address. This Report mainly concerns an important set of secondary liability rules, namely how liability is allocated amongst multiple defendants after they have each been held liable according to some primary liability rule.17 Whether a party is liable to a plaintiff is clearly the fundamental issue in any potential claim, and will normally be of much greater or immediate significance to the plaintiff and defendant than the secondary liability rules regarding multiple defendants. Controversial issues exist in respect of many of these primary liability rules, for instance the liability of local authorities for negligence regarding commercial or non-residential building projects, as found recently in Spencer on Byron.18 As indicated in the previous paragraph, we consider that recent legislative changes to building legislation implicitly affect the commercial buildings issue, as well as other liabilities in the sector, and it would be helpful if such liabilities were spelled out as clearly as possible. However this Report cannot and does not seek to address the many and varied issues surrounding primary liability in negligence, either in the building or local government sector, or generally.
17For example liability in negligence, breach of contract, or on some other basis, such as statute.
18Body Corporate 207624 v North Shore City Council [2012] NZSC 83, [2013] 2 NZLR 297 [Spencer on Byron]. See Issues Paper, above n 5, at [5.19]–[5.23] for a discussion of that case.