claim for contribution

Any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage, irrespective of whether the liability is joint with the other persons. The liability for contribution is imposed as recognition that more than one person can be liable for the same wrongful or unlawful acts; in essence, the defendant points their finger at third parties and alleged that they are liable in whole or in part for the claim made against them. Claims for contribution are often made in the same set of proceeding to avoid multiple instances of legal proceedings between related parties and claims.

A claim for contribution may be made against another person where that person ceased to be liable in respect of the damage in question since the time when the damage occurred, unless that person has ceased to be liable by expiration of a period of limitation which extinguished the right on which the claim against him was based.

Furthermore, where a person has settled a claim against made against themselves, the person entering into the settlement agreement is entitled to claim contribution from others involved in the same acts. The court may order contribution for the entire amount or a fair and equitable proportion, having regard for all the circumstances of the case, such as contributory negligence and/or any agreement between the contributing parties (if any).

Liability for contribution is able to be established against others based on findings made in previous judgments in appropriate cases.

Claims for Contribution

Claimants or defendants may make claims for contribution by adding parties to the legal proceedings where they themselves are sued for liability after being served with the claim form. Permission of the court is required to bring a claim for contribution where the person that they wish to claim against for contribution is not already a party to the proceedings. In other cases, the claim for contribution is filed with the defence. A defendant is required to file and serve a notice setting out the nature and grounds of the additional defence in advance of filing the claim for contribution in some circumstances.

Contribution claims may be for the entire sum claimed or for part of sum claimed

Examples of Contribution Claims

Claims for contribution against third parties to litigation may arise in any number of circumstances. They include:

1. In a winding up of a partnership, a partner that pays more than its share of the debts of the partnership is entitled to claim contribution from the other partners to maintain parity (in accordance with the equity in the partnership) of payments between each of them.
2. Joint owns of property are liable to one another to pay for the expenses an charges related to jointly owned property, such as expenditure, taxes and other charges.
3. Co-defendants are liable inter se equally for assets seized by way of writ of control or warrant of execution for the total sum of the judgment.

Suppose that four persons guarantee that a payment of £40 will be made to a creditor on behalf of a principal debtor. The principal debtor (who is primarily liable to pay the debt) defaults and does not pay any sum. The guarantors are jointly and severally liable to the creditor. The creditor sues the first of the guarantors. The first guarantor is ordered to pay the entire debt of £40 to the creditor. The guarantor may sue the other three guarantors for contribution in the sum of £10 each. The remaining three guarantors are liable to the first guarantor for £10 each.