Law body seeks proportionality
Proportionate liability should be a statutory contractual alternative to the current joint and several arrangement, according to a Law Society report.
Responding to the Law Commission’s feasibility investigation into joint and several liability, the society argues that people entering a joint enterprise should be able to agree on proportionate liability terms in a commercial contract.
It has also said that restrictions on limiting auditors’ liability in the 1985 Companies Act should now be abolished.
The society claims it is ‘not satisfactory’ for a major trading nation such as the UK to be without an appropriate framework for modern professional practices. But the society was not in favour of abolishing the legal principle that people causing civil wrongs should be jointly and severally liable for the losses they cause.
Subject to safeguards to protect consumers, it proposed that both sides in a commercial contract should have the freedom of choice in negotiation.
Chairman of the society’s reporting committee, Trevor Aldridge QC, said: ‘People making commercial contracts should be able to agree to divide the impact of damages claims.’
