If that is the case you could consider making a contribution claim against the other party/parties responsible (the Third Party), essentially creating a “claim triangle” with you in the position of B:
How do I get that contribution?
When it comes to seeking that contribution you have two options:
- A claim under Part 20 of the Civil Procedure Rules (Part 20 Claim) which pulls the Third Party into the original claim as an additional defendant; or
- a claim under the Civil Liability (Contribution) Act 1978 (the Act) against the Third Party once the original claim is resolved
The best approach will depend on the circumstances of your case and there are advantages and disadvantages to either option.
If the original claim is resolved before you make a contribution claim, you would have to pay the settlement or damages to the claimant and then seek to recover those sums from the Third Party.
To avoid that, you could make a Part 20 Claim. This involves making an application to add the Third Party to the existing proceedings, which (if the additional claim is not served with the defence) may require the permission of the court.
There is, however, a balancing act to be considered. On the one hand the Third Party may use what is known as a “cut-throat defence” (each defendant blaming one another) if they are pulled into the main claim. On the other, they will have the same interest as you in defending the claim, which may make the defence more likely to succeed.
You snooze you lose
Like any other claim, contribution claims have a strict period in which they must be brought.
You can, by negotiating with the other parties, attempt to buy time to bring the Third Party into the main claim. However, if the usual statutory limitation period for the main claim has already expired (e.g. for negligence not resulting in personal injury the usual limitation period is six years) bringing a claim under the Act may be your only option.
If you do end up pursuing a claim under the Act it must be brought within two years of the right accruing. This accrual can happen in one of two ways:
- The making of a court order which quantifies the damages due
- The date of a negotiated bone fide settlement that includes agreement of the settlement sum.
The latter brings with it its own intricacies, more on which can be found here.
Same damage and liability
Once you know you are in time, you will then need to check whether the law agrees that the Third Party has contributed to the losses claimed by the claimant. To do this, under the Act, you must first show that the Third Party:
- Had a duty to the claimant;
- That duty was breached; and
- That breach caused loss to the claimant (section 1(4) of the Act and Percy v White).
The loss caused by the Third Party must then be shown to be the “same damage” as that which was the subject of the original claim (section 1(1) of the Act). This is a particularly tricky area and there has been a lot of case law which tells us what is not considered to be “same damage”, for example:
- Physical defects in a reservoir and the financial loss of having to construct a second reservoir were not the same damage (Birse Construction Ltd v Haiste Ltd)
- A liability to replace something is not the same as causing the damage to the thing itself (Luke v Kingsley Smith & Co)
- A lost chance to bring a claim for injuries suffered is not the same as the injury itself (Luke v Kingsley Smith & Co)
In contrast, an example where it would likely be considered the “same damage” is when an architect and a design and build contractor are both responsible for the same physical defect in a building, such as defective cladding.
If there is a question whether the damage is the same, you may be best to instead add the party as a Part 20 Defendant, provided (as discussed above) that you are within the statutory limitation period.
Is it worth it?
The final, but arguably most important thing to think about, is what contribution you are likely to be awarded. After all, there’s little point going through the stress and cost of making such a claim unless the Third Party is likely to contribute a reasonable sum.
As a starting point, the total liability to be divided amongst those responsible will be the ordered or agreed value of the original claim (Nationwide Building Society v Dunlop Haywards (DHL) Ltd). For example, if an initial claim is settled for £50,000 then any contribution claim you might make against a Third Party would be limited to recovery of a proportion of that £50,000.
The basic principle is that the court will order a contribution from the third party in line with what is “just and equitable” based on “that person’s responsibility for the damage in question” (section 2(1) of the Act).
To determine this, the court will look at a number of factors, including:
- Causation: the greater the role in causing the loss, the greater the contribution
- Fault: the more ‘morally blameworthy’ a party is, the greater the contribution
- Financial benefit: the larger the benefit gained (e.g. amount paid to a contractor for the faulty work), the greater their contribution is likely to be.
There are also some general principles that provide a bit of a further steer as to the proportion you can expect to recover:
- The more “specialist” advice is, the more reasonable it is likely to be for another party to accept and act on it (Ridehalgh v Horsefield) and as a result, the latter party’s contribution is likely to be reduced
- If a party has been fraudulent they are likely to be required to pay a higher contribution (Downs v Chappell)
- If the Third Party has a contractual limitation of liability in any applicable agreement with the claimant then the Third Party’s liability is capped at that level (section 2(3)(a) of the Act and Nationwide Building Society v Dunlop Haywards (DHL) Ltd).
While there is clearly some guidance to be had from case law, it does not amount to a hard and fast rule to calculate how much you will be able to recover. It will be case specific and, should it get to such a stage, ultimately would be down to the judge’s discretion.
This is a complicated area and specialist legal advice will be required to successfully navigate these claims.
For more guidance, see our articles when does limitation start to run for bringing a contribution claim? and assignment, novation and contribution
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