Contents

Chapter 6
Supplementary contribution

Introduction

6.1It is common in civil litigation for the courts to determine applications for contribution or indemnity in the same judgment as liability, although a claim for contribution, indemnity or both may still be brought in separate, later proceedings. Either way, as explained in Chapter 2,68 contribution is determined as between defendants, and does not affect the plaintiff’s rights to recover 100 per cent from any liable defendant or to enforce judgment against any of them. This enhances plaintiff autonomy and choice. If one liable defendant is better or more immediately able to pay than other liable defendants, the plaintiff can seek the full judgment debt from that defendant and leave it to them to seek contribution orders, if necessary, and then enforce them against other liable parties. Attaining a fairer spread of costs among the liable defendants is achieved by the contributions they are entitled to or must pay each other.
6.2While joint and several liability provides that any liable defendant can be required to pay the full loss to the plaintiff, the rules of contribution mean that other liable defendants cannot be required to pay another liable defendant more than their share or contribution, as determined by the court, even if the other defendant has been required to pay the plaintiff in full or pay a share left unpaid by an absent liable defendant. As discussed in Chapter 369 this does not cause problems where all defendants are judgment-worthy and are able to satisfy the contribution order against them. However, a disproportionate burden or effect from joint and several liability may still fall on a defendant who pays all or most of the judgment sum even when there are at least some solvent defendants available to make contribution. Unjust results can ensue when the defendants include a mixture of solvent parties and unavailable parties.

6.3The problem typically arises where a plaintiff makes a demand against one defendant and is paid in full by that defendant; but recoveries from other defendants, in accordance with respective contribution orders, do not cover the uncollected share of an insolvent or missing defendant. The defendant paying the plaintiff has effectively already paid and met that uncollected share to the plaintiff but has no means to recover or distribute the cost of the uncollected share.

6.4Such a result inevitably disrupts the broadly proportionate allocation of responsibility that may otherwise be achieved through orders for contribution. The issue here is not that a party faces extra costs as a result of an uncollected share – under joint and several liability it is expected that other defendants must pay uncollected shares. Rather, we seek to avoid an arbitrary, unfair and unnecessarily imbalanced result among defendants. The objective is that when an uncollected share needs to be made good, all solvent defendants can be made to contribute in proportion to their share of responsibility to that additional share.

6.5This problem can be addressed without curtailing the plaintiff’s freedom to enforce judgment as they see fit. The appropriate mechanism is to allow a liable party that has been required by the plaintiff to “overpay” to apply for orders for “supplementary contribution” from other remaining and solvent liable parties. Each liable party should contribute to the cost of the unmet share in proportion to their share of responsibility compared to other remaining liable defendants, including the applicant but excluding any missing party. In this chapter we discuss the rationale for this reform, and how it can be adopted.

68At [2.5].
69At [3.9].