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ARTICLE · 03 JULY 2023

Legal Developments In Construction Law

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If a main contractor settles a claim by an employer and wants to recover a contribution from a subcontractor, what does it have to prove? Must it prove its own liability to the employer?

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1. Settling an employer's claim; what does a main contractor have to do to recover a contribution from a subcontractor?

If a main contractor settles a claim by an employer and wants to recover a contribution from a subcontractor, what does it have to prove? Must it prove its own liability to the employer? In Energy Works (Hull) Ltd v MW High Tech Projects UK Ltd, the court noted that case law says it does not, but that it can seek recovery by proving that:

  • the employer's claim was not so weak that no reasonable party would take it sufficiently seriously to negotiate any settlement that involved making a payment;
  • the settlement amount paid was reasonable, having regard to the strength of the claim, being within the range of settlements which reasonable parties in the main contractor's position might have made in all the circumstances;

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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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