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Learn how the ACE campaign highlights issues with joint and several liability in the UK, impacting fee levels, client choices, and consultant liability. Find out the implications and proposed solutions.
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ACE – An overview of activities Nora Fung 7 September 2005
ACE campaign - proportionate liability • Linked to high cost of PI insurance • No recognition of proportionate liability under English Common Law • Civil Liability (Contributions) Act 1978 • Survey of ACE members in May 2005
60% of firms have been forced to raise fee levels as a result of increases in premiums and excess levels Nearly 50% of firms have turned work down due to the level of PII cover demanded by the client Impact on the client • Less choice and higher costs for clients • Clients should undertake project insurance
Joint and several liability • Issues of joint and several liability arise in nearly a quarter of all claims Analysis of 29 claims
Joint and several liability • On average, final liability is apportioned equally between contractors and consultants, however consultants are subject to liability being apportioned against them more frequently than any other party • In a third of cases, consultants believe that their PII has been adversely affected by the claim against them, through increased premiums and excesses
Conclusion • Lobbying of MPs after summer recess in pursuance of change to liability laws • Change of liability laws however, insufficient in itself • Comprehensive risk management system vital • Project insurance
The End Thank you!