"Same Damage" – Section 1 of the Contribution Act of 1978

News

21/09/2015

 

An old conundrum was posed during a recent TCC hearing I had: what exactly is meant by ‘same damage’ within the meaning of section 1 of the Contribution Act of 1978?

 

The background of the instant case concerned a compromise in the original action that had been effected on different bases to that being alleged for the contribution claim. 

 

It was held that the mechanism/allegations for claiming were immaterial for the purposes of the 1978 action – what was needed was to ask whether or not the claim concerned a liability for the ‘same damage’ as the original action.

 

The nature of why each party was liable in respect of the same damage clearly went to apportionment, not the right per se.  There are of course other requirements, such as that a settlement be bona fide etc. but the case illustrated that it is still worth remembering the following, from the late Lord Bingham, when faced with a contribution claim that includes a difficult assessment of that all important ‘same damage’…

 

“It is plain beyond argument that one important object of the 1978 Act was to widen the classes of person between whom claims for contribution would lie and to enlarge the hitherto restricted category of causes of action capable of giving rise to such a claim. It is, however, as I understand, a constant theme of the law of contribution from the beginning that B’s claim to share with others his liability to A rests upon the fact that they (whether equally with B or not) are subject to a common liability to A. I find nothing in section 6(1)(c) of the 1935 Act or in section 1(1) of the 1978 Act, or in the reports which preceded those Acts, which in any way weakens that requirement. Indeed both sections, by using the words “in respect of the same damage”, emphasise the need for one loss to be apportioned among those liable.

 

When any claim for contribution falls to be decided the following questions in my opinion arise:

(1) What damage has A suffered?

(2) Is B liable to A in respect of that damage?

(3) Is C also liable to A in respect of that damage or some of it?

 

At the striking-out stage the questions must be recast to reflect the rule that it is arguability and not liability which then falls for decision, but their essential thrust is the same. I do not think it matters greatly whether, in phrasing these questions, one speaks (as the 1978 Act does) of “damage” or of “loss” or “harm”, provided it is borne in mind that “damage” does not mean “damages” (as pointed out by Roch LJ in Birse Construction Ltd v Haiste Ltd [1996] 1WLR 675, at p 682) and that B’s right to contribution by C depends on the damage, loss or harm for which B is liable to A corresponding (even if in part only) with the damage, loss or harm for which C is liable to A. This seems to me to accord with the underlying equity of the situation: it is obviously fair that C contributes to B a fair share of what both B and C owe in law to A, but obviously unfair that C should contribute to B any share of what B may owe in law to A but C does not.”

Royal Brompton Hospital v Hammond & Ors. (2002) UKHL 14

 

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