22 Nov 2012

Leaky homes liability rules could change

7:07 am on 22 November 2012

The Law Commission is reviewing legal liability rules that could overhaul who pays what over matters like leaky homes.

It wants submissions on plans to change so-called joint and several liability rules.

Under these rules, a city council can be liable for 100% of the costs of a leaky homes case if joint defendants such as building companies have gone bankrupt.

The proposal would change this last-man-standing rule so that a council would be responsible for only its share of the damage that was caused, and the plaintiff would have to chase the bankrupt defendants for the rest.

Commissioner Wayne Mapp says the matter has come up because of the leaky homes crisis, but could apply to other lawsuits.

He says changing the rules could leave plaintiffs out of pocket and notes where they have been changed in other countries, a tighter system of warranties has been brought in to provide greater protection.

The report was called for last year by the Government and a response is expected by early next year.