Recent HCA decisions reveal targeted claims approach to construction and building disputes

In recent months the High Court of Australia has handed down two judgments relevant for underwriters in assessing risk exposure of contractors and building professionals and the availability of proportionate liability defences.

Despite the tort reforms implemented following the Ipp Report in the early 2000s and introduction of proportionate liability, statutory reform in NSW, the decision in Pafburn Pty Ltd v The Owners – Strata Plan No 84674¹, has resulted in a reversion to joint and several liability for residential construction in respect of non-delegable building work. In contrast, whilst there is significant reform proposed for Victorian building liability, and warranty protections which are not apportionable, there is no suggestion that the Victorian parliament intends to further wind back the proportionate liability reforms.