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  • A recent NSW Court of Appeal decision has fundamentally altered legal liability in NSW in almost every design and building case.
  • In construction cases, this means the effective death of proportionate liability in NSW, although leave to appeal to the High Court has been granted.
  • This outcome strikes at the heart of over two decades of legal practice in NSW.

Design and construction liability issues have been simmering for some time and increasingly caught the public interest, especially considering recent media coverage of notorious developer, Jean Nassif, fleeing Australia to escape liability. Prior to this, on 13 December 2023, the landscape of construction law liability cases had a major fault line emerge, creating a schism from which over two decades of legal practice has been turned on its head.

Over two decades ago, March 2002 saw the introduction of the proportionate liability scheme in Part 4 of the Civil Liability Act 2002 (NSW) (‘CL Act’), as well as the associated legislative abolition of joint and several liability. Proportionate liability was a fundamental change to the law of liability in New South Wales (‘NSW’).

For over twenty years, in construction and related cases, legal practitioners and their litigant clients fine-tuned a body of law limiting the liability of principal contractors for that of their subcontractors and consultants.

Wind forward to 2024, practitioners in areas such as construction law can only look in wonderment at the stunning fallout of the Court of Appeal’s decision in The Owners – Strata Plan No 84674 v Pafburn Pty Ltd [2023] NSWCA 301 (‘Pafburn’). Practitioners now face the practical fallout of this landmark decision.

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