This bulletin provides an introduction to contribution and explores practical matters to consider when bringing a contribution claim.
When does contribution matter?
Where your client is a defendant and a plaintiff has brought a claim against them in relation to a personal injury, one of the first things to consider is whether your client has a contribution claim available to it. This is important because each wrongdoer is jointly and severally liable in these matters. This means that one wrongdoer can be held liable for the entire loss, even if there are other wrongdoers who are equally or more liable. (At this point, it is important to note that claims arising out of an injury are excluded from Part IVAA of the Wrongs (Vic) (the Wrongs Act) which addresses proportionate liability.)
What is contribution?
‘Contribution’ refers to dividing the plaintiff’s total damages between two or multiple parties that are found liable to the plaintiff.
What is the history of contribution?
Historically, contribution at common law was applied rigidly and did not allow a liable party to seek contribution from another party. In the 1799 case of Merryweather , the Court held that a wrongdoer (a defendant) could not bring an action against another wrongdoer for contribution, even where the other wrongdoer was responsible for the full claim of damages.
Over time Merryweather has been watered down. Courts have allowed for equity and equitable doctrines, such as fairness and justice, to overcome the differences between the positions of defendants to a proceeding. Court have recognised that, in a dispute where it is clear a third party is partly responsible, it is unjust to allow only one party to bear the responsibility for all damages.
What is the Victorian position now?
In 1986, Part IV of the Wrongs Act was enacted, creating a statutory right to seek contribution. Part IV creates an opportunity for a party to seek contribution from a third party who was not part of the proceeding. This option is available when the third party is a ‘person liable’ for the ‘same damage’ as is alleged.
For instance, in circumstances where a civil claim is brought by a plaintiff, for injuries arising from slipping on a wet surface in a theatre lobby, the corporate owner of the theatre (as occupier) could be a 'person liable' (for failing to ensure the floor was free from slipping hazards). Similarly, the contracted cleaning company of the theatre could also be a 'person liable'.
The concept ‘same damage’ means that the damage or loss suffered by a plaintiff must be the same damage or loss as that resulting from the actions of the 'person liable'.
While there must be a connection between the actual damage that occurred, and a responsible other party, it is possible that two parties may be liable to a plaintiff in distinct causes of action - for example, one in contract law and the other pursuant to statute (such as the Wrongs Act).
WHO determines contribution?
Section 24 of the Wrongs Act provides that a judge or jury may determine contribution. In doing so, the Court must consider what is ‘just and ‘equitable’, having regard to the extent of that person’s responsibility for the damage.
HOW do parties seek contribution?
Order 11 of the Supreme Court (General Civil Procedure) (Vic) (and Order 11 of the County Court Civil Procedure (Vic)) outlines the procedure for contribution:
|When the party is joined to proceedings|
When the party is not joined to proceedings (third party)
Are there any limitation periods?
Limitation periods are crucial in contribution claims as there is no mechanism for an extension of time to bring third party proceedings under the Wrongs Act.
Pursuant to s 24(4) of the Wrongs Act, a defendant can seek contribution:
- within the period the plaintiff could have brought the action against the other party; or
- 12 months from the service of the writ on the defendant,
whichever is the longer period.
Public sector bodies seeking contribution from another public sector body
Public sector bodies are public service bodies (e.g. Departments and Administrative Offices), public entities (such as Statutory authorities) and special bodies (e.g. Commissions) (see s 4 of the Public Administration Act (Vic)). Cabinet guidelines exist regarding the conduct of disputes between different public sector bodies. These guidelines are available from the VGSO and are based on the principle that litigation between public sector bodies is undesirable, in that it undermines the whole-of-government approach to problem solving. In this context, serious consideration would need to be given before another public sector body was joined as a third party to a proceeding or was served with a contribution notice.
What are the practical lessons?
When preparing a contribution claim, you should keep in mind the following:
- Part IV of the Wrongs Act governs the entitlement to seek contribution from a party, or non-party (third party) in personal injury litigation.
- Civil procedure governing contribution and third party proceedings is contained in Order 11 of the Supreme Court (General Civil Procedure) (Vic) (see also Order 11 of the County Court Civil Procedure (Vic)).
- There are strict limitation periods for taking these steps in civil litigation that practitioners must be aware of, or the right to seek contribution may be lost.
Contact our team
Please get in touch with our team if you need assistance.
Ankush Chauhan, Managing Principal Solicitor
Phone: 0408 352 283
Publication written by Luke Flegeltaub, Anna Pejovic, Kate Pereira, Adrian Lee and Ankush Chauhan
Reviewed 10 February 2022