On 29 November 2013, the Western Australia Supreme Court found that the proportionate liability regime does not apply to commercial arbitrations.

Justice Beech determined the question (at least in part) in the case of Curtin University of Technology v Woods Bagot Pty Ltd [2012] WASC 449.

This decision is significant for:

  • Contracting parties in determining what method of dispute resolution should be included in contracts, particularly where that party assumes a liability greater than it would ordinarily assume such as a lead design consultant
  • Professionals and professional indemnity insurers in that a professional, having agreed to arbitrate a dispute, will be placed in a significantly different position to that which exists where the dispute is before a court or tribunal
  • Legislators, as the decision has the potential to undermine the intent of the legislation to limit a defendant's liability to an amount proportionate to its degree of fault rather than its financial capability to fund an award or judgment.

The decision will also be of interest to the proponents of domestic arbitrations as this will be yet another reason why some contracting parties will seek to avoid arbitration in order to protect their rights under the proportionate liability regimes. Read our more detailed article here.

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