Critical change to proportionate liability “ the Court of Appeal decision in VellaAuthor : Patrick Boardman, Partner and April O'Keefe, Senior Associate

Financial Lines

On 15 December 2011, the New South Wales Court of Appeal delivered a judgment (Vella) which significantly limits the circumstances in which a defendant to a NSW claim can argue that its liability to the plaintiff should be limited to a œjust proportion.

The decision is consistent with previous Victorian authority which held that only entities which are liable to the plaintiff for the same damage (a different concept to damages or compensation) can have the benefit of proportionate liability.

As a result of Vella, insurers will need to review current claims (including those where judgments have been handed down) to determine if proportionate liability is still a viable defence.

For more information or if you have any questions about the Court of Appeal’s judgement, please contact Patrick Boardman, Partner or April O’Keefe, Senior Associate, in our Sydney office.