Can You Avoid a Proportionate Liability Scheme by Referring All Disputes to an Arbitration?

A recent court decision has confirmed that in most States and Territories it won't be possible to avoid the application of proportionate liability by simply requiring disputes to be resolved by arbitration, as previously suggested by some commentators. It may still be possible to achieve the same result if the arbitration agreement clearly states that the arbitrator cannot apply the proportionate liability legislation.

As principals to construction and service contracts are more likely to be the plaintiffs (ie. the claimant) in any claim between a principal and a contractor regarding a failure by a party to take reasonable care, it is generally advantageous to principals to contract out of the application of the proportionate liability regimes operating in all States and Territories (where it is possible to do so).