Sapere Research Group and Buddle Findlay were asked by the Department of Building & Housing to review the implications the current liability rule (as it relates to negligent acts) in the building and construction sector. Sapere’s role was to assess the economic arguments for alternative rules in terms of their effect on incentives, efficiency and underlying behaviour. The intention of the work was to assess the merits of alternative legal rules in terms of the Government’s ultimate goal of enhanced accountability in the building and construction sector.

Buddle Findlay and Sapere did not find evidence (either in law or economics) that a change to the current rule of joint and several liability would improve accountability. Rather, other rules for allocating liability look more unpalatable and are only likely to worsen the situation.