SINGLE APPORTIONABLE CLAIMS
UNDER THE CIVIL LIABILITY ACT 2002
WHAT ARE THEY AND WHY DOES IT MATTER?
1. As part of the tort-law reforms of the early 2000s, statutory proportionate-liability regimes were established in various jurisdictions across Australia to address the so-called “deep-pocket syndrome”. Plaintiffs were seen as too often pursuing only one (typically insured) defendant for the entirety of their loss, notwithstanding that other potential defendants had contributed and ought to bear a share of the liability.The defendant sued was left to pursue the other culpable parties by way of cross-claim (or separate proceedings), and had to bear any shortfall.
2. The manner in which the regimes were implemented differed from jurisdiction to jurisdiction but their general effect was the same. Under the reforms, a defendant sued in respect of a claim to which the regime applied could notify the plaintiff that it considered that others had contributed to the alleged loss. The potential defendants were dubbed “concurrent wrongdoers”. Each concurrent wrongdoer was liable to pay damages only to the extent the court considered “just” having regard to that wrongdoer’s relative contribution to the loss compared to that of the other concurrent wrongdoers.
3. The reforms had significant implications for plaintiffs and for defendants. In contrast to the earlier position where a plaintiff could pursue the best-funded contributor, if one or more of the concurrent wrongdoers in respect of a particular claim is not in a position to pay, the plaintiff will not achieve full recovery. Conversely, where the regime applies, a defendant can assume that his or her liability will be limited to a proportion of the total loss that reflects his or her “culpability”.
4. The reach of the proportionate liability reforms was limited to claims of certain specific kinds. Initially, as noted above, the reforms focused on claims in tort (specifically negligence). In NSW, the relevant provisions to that effect were inserted into Part 4 of the Civil Liability Act 2002 (NSW). They apply to claims for “economic loss or damage to property in an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care”.
5. Subsequently, proportionate-liability provisions were also inserted into the Trade Practices Act 1974 (Cth) (as it then was), the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth). In each case, the regime was ostensibly limited in its application to claims for contraventions of particular, specific sections of the Act in which the provisions appeared (such as the prohibition on misleading and deceptive conduct that now appears in s18 of the Australian Consumer Law).
6. This gave rise to a question. Often plaintiffs plead multiple causes of action arising from the same conduct that is said to have caused the same loss. Where a plaintiff pleads an apportionable claim (such as a failure to take reasonable care or a breach of s18) and alongside it one or more non-apportionable claims, how is the court to apply the apportionment provisions? Do they only apply if the sole cause of the loss is a claim falling within the scope of the apportionment provisions? And is that to be determined based on how the claim is pleaded, what the evidence establishes or something else?