The High Court gives proportionate liability in arbitration the green light

In its recent decision of Tesseract International Pty Ltd v Pascale Construction Pty Ltd [2024] HCA 24, the High Court of Australia has provided some clarity on the application of proportionate liability to arbitrations.

By majority, the High Court held that the proportionate liability laws of the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) (Law Reform Act) and Part VIA of the Competition and Consumer Act 2010 (Cth) (CCA) can apply in arbitration, unless expressly excluded by the parties.

Background

Pascale Construction Pty Ltd (Pascale) engaged Tesseract International Pty Ltd (Tesseract) for engineering consultancy work in connection with building Pascale's design of a multilevel warehouse building in South Australia. There was a dispute between the parties as to whether Tesseract's work met the standard required under the contract, with Pascale claiming damages for breach of contract, negligence and misleading or