The building sector: room for a special case?
7.1Despite our recommendation to retain joint and several liability, we considered whether a proportionate scheme could be justified in any sectors. Proportionate liability could be considered where the normal operation of joint and several liability in a particular sector causes such significant distortions or injustice that some intervention is justified, or the characteristics of a sector mean that a proportionate regime could result in enhanced sector outcomes and still provide adequate protections for plaintiffs.
7.2The building sector, and more particularly the residential building sector, is the main sector for such consideration primarily because the impact of the leaky homes crisis on this sector was the principal catalyst for this reference to the Law Commission, and the majority of submissions to the Commission came from participants in this sector. The large majority of building sector submitters report what they perceive as substantial unfairness to solvent defendants in leaky home cases. We have not found evidence that building sector defendants, other than local authorities, have had to meet uncollected shares in a way that is clearly disproportionate to defendants in other sectors. But we do accept that local authorities have had their cost of liability approximately doubled by having to meet uncollected shares in leaky home matters, adding several hundred million dollars to local authority liability costs.
7.3We therefore agree that it is necessary to consider the practicality of introducing proportionality in the home building sector, to determine whether it could reduce liability for uncollected shares without creating similar or greater unfairness to plaintiffs. The possibility is worth considering, not only because of the potential or actual impact of joint and several liability on some defendants, but also because specific, targeted schemes have previously been attempted in the construction sector in neighbouring jurisdictions.