Guide to Using the RIBA Professional Services Contracts 2018 - Other - Page 62
Contract terms
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However, the effect is to negate the principle of joint and several liability in English
law, which allows a claimant to pursue any one of the contributors to the loss for the
whole amount. The defendant then carries all the risks, particularly those associated
with insolvency, and the burden of proving the extent of any contributions on to the
loss. Further, difficulties might arise if an arbitrator or the court has to determine the
contributions of parties not included in the proceedings or if one of the contributors
becomes insolvent.
What is joint and several liability?
Joint and several liability is a form of liability that is used in civil claims where a
plaintiff may recover all the damages from any of the defendants regardless of
their individual share of the liability. In such cases, the successful plaintiff may
collect the entire amount of the damages from any one of the parties, or from any
other, or from all of the parties in various amounts until the damages are paid in
full, i.e. if any of the defendants do not have enough money or assets to pay an
equal share of the award, the other defendants must make up the difference.
For further details a CIC Liability Briefing on net contribution clauses is available
at www.cic.org.uk. The provisions of the net contribution clause are also included
in the RIBA Domestic Professional Services Contract 2018 for use on a domestic
project for a consumer client. However, to ensure that the net contribution clause
is considered fair and reasonable in the context of the Unfair Contract Terms Act
1977, the Architect/Consultant should ensure that this is one of the clauses to be
explained to the Client and that it is fully understood. This has been reintroduced into
the RIBA Domestic PSC as a result of developments in case law, namely the case of
West & West v Ian Finlay & Associates,5 in which the Technology and Construction
Court confirmed in its judgement that a net contribution clause does not offend the
Consumer Protection Regulations as being ‘unfair’.
Although the inclusion of a net contribution clause is considered to be fairer to the
Architect/Consultant, a Client may not relish the thought of losing the option of
claiming on a joint and several basis. Any concession by the Architect/Consultant
on this issue is a matter of risk and/or principle and advice should be sought from
insurers. This may affect the level of professional indemnity insurance premiums
payable and, in turn, the Architect/Consultant may wish to reconsider the amount of
the fee required.
What if the Client wants to delete the net contribution clause?
If the Client is considering deleting the clause, it is important that the Architect/
Consultant obtains an overall cap on liability to cover all claims beyond which the
Architect/Consultant will not be liable. Whenever practicable, the cap should be
discussed and specifically agreed with the other party. Although a cap could be
more onerous than a net contribution clause, in James Moores v Yakeley Associates
Ltd, the court accepted that in that case the level and method of calculating the cap
was reasonable – see http://cic.org.uk/admin/resources/managing-liability-financialcaps.pdf. To implement a cap, the clause could be replaced, after discussion with
the insurers/broker, by ‘The total liability of the [Architect/Consultant] under or in
connection with this Agreement shall not exceed £
.’
[5] West v Ian Finlay and Associates [2014] England and Wales Court of Appeal Civ 316 (27 March 2014).
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