The Salesforce Tower, which recently became the tallest office building in Sydney, at 263m. Credit: Ben & Gab, CC BY-SA 2.0, via Wikimedia Commons

Alice Hayes
Corrs Chambers Westgarth, Melbourne, Victoria
alice.hayes@corrs.com.au

Introduction

The majority of infrastructure projects both globally and in Australia are delivered using a joint venture structure.¹ Joint ventures (JVs) are the predominant model for delivering major projects because the scale and complexity of such endeavours requires a combined approach to expertise and resources.

A major benefit of JVs are the opportunities they create. JVs allow contractors in the industry to broaden their horizons, learn better practices and grow by taking on projects they may have never dreamed possible on their own. However, despite the benefits, the legal risk for a contractor looms large. Firstly, simply forming a JV with another party provides no additional risk protection from that party. It is important for contractors in the construction industry to recognise that the relationship between participants in a JV will be governed by the particular JV agreement (and often with reference to the head contract) rather than any extrinsic principles of law. Secondly, there is an inherent risk within the traditional JV structure itself. The very nature of JVs is the union of two (or more) businesses to achieve a common goal. The businesses expect to benefit from each other’s expertise and talents. However, they have different backgrounds and skillsets which, when not managed properly, will lead to conflicts and disputes.

A major risk in JVs is the difference between the members. That is why JV agreements require a strategic and robust approach to risk allocation in order to avoid disaster for the parties involved. To be most effective, these processes must occur at the outset of the project, in the pre-tender stage. In order to manage the risk of difference between the parties, JV members must engage in detailed strategy development to uncover where their interests and abilities are not aligned and how to overcome this. The result of this is clarity as to the scope of each parties’ obligations. This essay argues with examples from recent decisions that an integrated scope model is the less risky option for most contractor JVs operating in the construction industry. It further argues that parties must define and manage their economic independencies, including their respective liabilities if (and when) the need arises.²

A JV will be successful if the parties take a balanced and considered approach to risk allocation. JVs will remain a favourable method for two or more contractors to deliver major projects, as long as the risk that lies between the JV partners can be effectively managed.

The non-existent law of JVs

The term ‘joint venture’ has no settled meaning in Australian law. In determining whether a relationship was a partnership or joint venture, the High Court of Australia noted that key features of a JV include working towards a common aim, where the parties each contribute money, property or skill.³ The most basic definition of a JV is two or more entities co-operating for a common purpose.⁴ For the purposes of this essay, the common purpose is the delivery of a major construction project.

In Brian Pty Ltd v United Dominion Corporation Ltd, the High Court confirmed that the ‘term “joint venture” is not a technical one with a settled common law meaning’.⁵ This was also made clear in White City Tennis Club Ltd v John Alexander’s Clubs Pty Ltd, where Macfarlane JA noted: ‘Describing the arrangements as a “joint venture” does not however have any particular legal consequences. The rights and obligations of the parties remain to be determined by examination of the detail of what they have agreed and done’.⁶

As such, there is no ‘law’ of JVs. Instead, the benefits and disadvantages of a JV will depend on the structure of the JV agreement and the terms and conditions included in it.

JVs – a match made in heaven

Within the construction industry, the JV structure is considered to have the best capacity to deliver complex projects because parties can share significant capital and operational costs and have access to greater financial resources than a party might have access to on its own. For contractors, JVs provide for commercial opportunities such as sharing the risk of taking on a project and increasing buying capacity. It is essential for certain projects, where contractors with particular experience seek partners with a different skill set or where local law requirements specify that contracting entities must have a certain amount of local representation. Principals, on the other hand, find JVs attractive because there is typically joint and several liability between the contractors, leading to less exposure to risk in event of contractor insolvency.⁷

JVs have proliferated in recent decades in the Australian construction landscape because they encourage the growth of companies and allow companies to work on projects which they otherwise would not be able to. According to the Grattan Institute, mid-tier contracting firms won 31 per cent of the contracts on Australian megaproject work over the past 15 years without the involvement of a tier one firm.⁸ JVs enable this. Tier one firms won 27 per cent in joint ventures with mid-tier firms and 41 per cent without them.⁹ Internationally, of the 31 project finance schemes valued at US$500m or above that reached financial close during 2020, more than two thirds were to be delivered by JVs.¹⁰ JVs create opportunities and they broaden horizons and networks which strengthens the construction industry overall.

Many of these projects are being delivered with significant private sector financial support by way of a variety of public-private-partnerships (PPPs) which include JVs within them. These are complex logistically and legally, and as demonstrated by the West Gate Tunnel Project in Melbourne, are fraught with substantial risk.¹¹ In the past few years in Australia, several international firms have entered partnerships and joint ventures with domestic firms. For example, UK-based Laing O’Rourke partnered with Australasian firm Fulton Hogan on Victoria’s Level Crossing Removal Project.¹² JVs are a particularly attractive structure for players seeking to participate in large projects, but at the same time, these projects are incredibly complex and fraught with risk.

Claims and disputes – not so happily ever after

JVs are increasingly popular, but their success rate is patchy, at best. A 2001 study into JVs found that 53 per cent were ‘successful’ in the sense that each partner had achieved returns greater than the cost of capital.¹³ What is even more sobering, is the statistics suggest that JVs overwhelmingly give rise to disputes. A 2019 arbitration study found that 27 per cent of international construction disputes arose from disputes between JV or consortium members.¹⁴ A worldwide report by Arcardis in 2018 found that where a dispute involved a JV, the dispute was between the JV partners or driven by a JV-related difference 35.7 per cent of the time.¹⁵ Not even the immensely successful construction of the London Olympics Park has come out unscathed. Of the Tier 1 contractors that formed joint ventures for the project, 69 per cent said that they would not take the relationship forward to future projects.¹⁶ These results force us to consider what it is about JVs that cause losses, disputes and broken relationships?

The answer to this is that not enough work is done during the ‘launch’ or tender stage to resolve the inherent strategic conflicts and differences between two or more commercial enterprises. James Bamford argues there are well known reasons for JV failure, being ‘wrong strategies, incompatible partners, inequitable or unrealistic deals, and weak management’.¹⁷ However, these failures occur when parties fail to give sufficient attention to strategic issues relevant to the JV during the tender period of a project. Instead, parties are busy analysing pre-tender documentation and assessing the overall risks of the project. JVs create the need for an additional layer of risk assessment which is often overlooked, despite it being essential. Potential JV partners must assess the risk of the differences posed by each other.

JVs generate the need for a unique risk assessment because they involve multiple parties dealing with disparate interests and this leads to unique challenges.¹⁸ Therefore, the major risk in JVs is in the difference between the parties.

The all-encompassing JV agreement

The relationship between JV members is contractual and the scope is determined by the joint venture agreement (JVA). A JVA allocates the roles, responsibilities, rights, obligations and liabilities of the JV parties (often under a head contract). For unincorporated JVs, the subject of this essay, the JVA will typically set out that the JV has no legal identity separate from its members and the relationship between the participants is contractual.

The drafting of a JVA is an element in the risk management process, because it will allocate risk between the parties. Parties who consider how risks ought to be allocated, as opposed to how risks will be allocated, should bear the fruits of a more successful partnership. This is advocated by the Abrahamson principles for risk allocation, the first being that it is best practice that the party who is best able to ‘manage’ or ‘control’ the risk should bare it.¹⁹

The JV members have come together to pool skills and resources. Understanding what each party is bringing, as well as the differences between them, helps to strategically align the JV. This requires consideration of how the works will be allocated between the parties such as whether there is an integrated or a clear delineated split. Parties must also define what the economic interdependencies are between them, in terms of what is being contributed and what is being taken at the end of the JV agreement. Most importantly, this requires clarity on how liability will be apportioned between the JV members in the event of a claim by a third party.

Ultimately, successful JVs come from a balanced and transparent contribution from both parties, not just risk allocation.

Strategic alignment

One way of managing risk in JVs is to ensure the parties are strategically aligned. Upon entering a JV, each party has its own goals, market pressures and shareholders.²⁰ If these disparate interests are not addressed and aligned, conflicts will develop.

Ideally, a JV will be fully integrated with participation based on a percentage split rather than a specified scope split. This is because disputes can arise easily when a scope split is not clearly defined. Even if one party is bringing a particular skill to the JV that the other party lacks, an integrated model is preferred. Furthermore, JVs partners should have clearly defined obligations, but also act as ‘one business’ as much as possible throughout the project. This can be achieved by clearly defining the objectives and purpose of the JV and recording it into the JVA.

Early involvement in strategic alignment, including an analysis of where their interests are not aligned in the performance of delivering the work agreed to under the head contract, is an essential element of risk management for parties to a JV.

Integrated models lessen scope risk

Ed Merrow says ‘joint venture partners can be a blessing or a curse’.²¹ These are wise words, but the structure of a JV can also encourage cooperation between partners. At the outset of a JV, parties will typically negotiate the division of responsibility for different activities to reach completion of the project. As a consequence of this arrangement, they will be liable to towards each other for the proper execution of only their individual parts of the total scope of work. While this makes sense due to differing skills sets that the parties bring to the table, a less risky option is an integrated work scope.

When parties’ work scopes are separate and discrete, the risk of disputes between JV partners is actually greater. In this scenario, for example, one JV member provides the design and the other provides the construction services. When things go wrong, arguments as to which party was responsible for the loss occurred and the parties will seek to recover from each other. Disputes between JV members can also occur earlier in the project, where one party believes the activities that another party expects them to undertake are unreasonable or not what was agreed under the contract. One example of the issues faced by partners to a large, complex project is the Sydney Light Rail PPP project. There, the consortium, ALTRAC agreed to take on site and interface conditions risk. Acciona, a party to the consortium, was responsible for designing and building the light rail tracks that run through Sydney’s central business district (CBD). It claimed that after the deal closed, it received a set of completely different and more stringent requirements from electricity distributor Ausgrid, including extensive work on 106 utility pits, extra relocations of services and more.²² Acciona said if it had known of this extra work, it would not have pursued the contract.²³ While that dispute with the NSW Government was ultimately settled, Acciona was also awarded 90 per cent of an AUD37m claim against its ALTRAC partners under the state’s Security of Payment legislation.²⁴ From this it is clear that an additional risk in the form of disputes can occur when JV partners’ work scopes are separate.

One way to avoid issues like the above is a completely integrated work scope between JV partners. Integration brings the two organisations working together from the start of the project. In this model, the JV members share all risks, liabilities, rights, benefits and profits in proportion to their participation in the joint venture.²⁵ This is usually expressed as a percentage share, such share normally being determined based on the resources that each party will supply to the joint venture for the execution of the total scope of work under the contract with the principal.

This is particularly useful to JV members who are both contractors and are generally similar companies in their field of business because they understand each other’s businesses and the risks. A recent example of this is John Holland and Lendlease Engineering (along with Bouygues Construction Australia), two of Australia’s largest contracting entities, who very much understand each other’s businesses, forming an unincorporated JV to design and construct the tunnel and stations of the Melbourne Metro Project.²⁶

Fully integrated work scopes do not happen in practice as much as they should. One reason for this is parties fear that liability will be difficult to work out in the event of a claim from the principle of the project. However, joint several liability can effectively manage this risk as discussed below.

Split scope – no pain, no gain?

Split scope JV agreements require upfront discussions between parties about what will occur when, as inevitably happens on large projects, JV members’ interests diverge. The UK case of Doosan Enpure Ltd v Interserve Construction Ltd (‘Doosan’) serves as an illustrative warning as to the types of disputes that can arise between members of a construction JV.²⁷ The parties were the two members of a JV who had contracted with the principal, a water authority, to upgrade a water treatment works. The head contact was an NEC3 Option C form, which is a target cost contract with an activity schedule to allow the financial risks to be shared between the principal and contractors in agreed proportions.²⁸ This is known as a pain/gain share mechanism.

The procedure adopted for payment under the JVA was that Doosan and Interserve would each produce a monthly spreadsheet and payment certificate showing the payments to which each of them was entitled from the JV account.²⁹ Payments were then certified by a Project Manager, as stipulated in the head contract. When Doosan asked Interserve to sign the Allocation Spreadsheet in respect of a payment certificate, Interserve declined to do so. Interserve argued that that there was a risk that the amount certified on an interim basis in respect to the work done would exceed the amount it could expect to recover as a result of the pain/gain share provisions of the head contract.

Before turning to the JVA, the court first reviewed the head contract provisions, whereby the NEC3 sets out that the parties agree a target cost or price to include the contractor’s best estimate of its cost to carry out the works, as well as a fee for costs, overheads and profit. Upon completion, an assessment is made of the ‘price for work done to date’ and any overrun or cost saving is allocated according to a formula under the ‘pain/gain share’ mechanism.³⁰ Justice Jefford ruled that it is clear from clause 53.3 of NEC3 that the comparison of the price for work done to date to the total of the prices, had to be carried out at completion of the whole of the works and once the price for the work done had finally been established.³¹ This highlights the importance of ensuring, to the extent possible, that the terms of the JVA are consistent with the relevant construction contract and that the JVA sets out which agreement (the JVA or the Contract) takes precedence where there is an inconsistency.

Further, Interserve’s basis for declining to sign the payment certificate reveals the split scope of works contributed to the dispute, because Interserve alleged that Doosan’s works were causing delay.³² In the JVA, both parties bore all commercial, technical and other risks in respect of the parts of the works it had undertaken to complete. That is, it was not an integrated scope of works. Difficulties and disputes in this regard can arise where both parties are carrying out elements of the same item of work. Doosan v Interserve serves as a warning as to the scope risk that can occur in non-integrated JVs, even when the contract allows for a shared risk payment mechanism. Where there are scope splits, JVs partners should discuss how their interests may not be aligned in the event of a disagreement and have clearly defined obligations based on this.

Overall, early planning is required to achieve strategic alignment between JV members. Split scope JVs are riskier than an integrated model. In order to avoid disaster, parties must undertake an early analysis of where their interests diverge, so that any differences can be strategically aligned and obligations can be clearly defined. Effective strategic alignment such as this allows the parties to understand their obligations within the structure of the JV as they undertake the delivery of the project.

Economic interdependencies

Parties must also define the nature of financial risks that attach to each other by virtue of being involved in the JV. The purpose of a JV is for its members to provide capital, people, intellectual property, equipment and more. These contributions will, as set out in the JV agreement, determine their return on investment. However, damage will occur if those contributions are not discussed and clarified during the pre-tender stage of a project.

Of specific interest to this article is how liability will be apportioned in the event of a dispute between the JV and the principal. Risk sharing arrangements between joint venture parties can be affected if joint and several liability is not sufficiently specified, as well as by the operation of proportionate liability regimes.

Joint and several liability is where multiple parties can be held liable for the same event or act. As mentioned above, one attractive feature of JVs from a principal’s perspective is that joint and several liability allows it to recover the whole of its loss from the JV, notwithstanding that one JV member’s responsibility may have been less or nil compared to another’s responsibility. This is particularly helpful to the principal where one JV party becomes insolvent. On the other hand, legislated proportionate liability regimes share fault among concurrent wrongdoers according to their respective levels of responsibility. While this in theory sounds fairer, JVs formed for the purpose of delivering projects should, where possible, avoid proportionate liability regimes as they undermine the parties’ intended risk allocation and are unsuitable for parties who plan to escalate any disputes that may arise to arbitration.

Joint and several liability – less mess

Joint and several liability allows a principal to take action against any one of the JV members and receive full compensation for the loss suffered. The onus is then put on the liable party to seek contributions from its JV partner(s), usually under the JV agreement. This can seem unfair, particularly in circumstances where the solvent or well-insured JV contractor, who may be less responsible than others, is made liable for the entirety of the loss.³³ While offering certainty to principals, joint and several liability can be less attractive to JV member contractors, particularly those of lesser financial strength but whose contribution is essential to the success of major infrastructure, such as technology providers.³⁴ However, JV partners can and should protect themselves from this through careful drafting of the JV agreement.

Proportionate liability regimes were brought in across Australia to force those found liable to pay damages according to their level of responsibility for the loss arising from a breach of contract.³⁵ It replaces the common law principle of joint and several liability. The legislation expressly allows parties to contract out of the proportionate liability regime in New South Wales, Tasmania and Western Australia.³⁶ Queensland expressly prohibits contracting out, while in Victoria, the statute is silent, and arguments are available either way.³⁷ The regime’s application is uncertain for parties contracting across multiple states. The effect of the legislation is that parties are not able to rely upon the risk allocation agreed in the contract.

It also undermines the effective financing and delivery of projects. Joint and several liability is particularly important in large infrastructure projects, because it allows debt, equity and government parties to be satisfied that the JV partners have (when their balance sheets are considered together) the capacity to deliver on the promises made or to pay damages in the event that they fail to so deliver.³⁸ Even if one of the joint venturers was to become insolvent (perhaps due to losses on other projects), the owner will still be entitled to fully enforce the contract against the others.³⁹

Under the regime, where two JV parties are wrongdoers, their liability may be determined by their responsibility, rather than their contractual arrangement which may provide for liability in accordance with their proportional interest in the JV. The main problem with this is that it prevents parties of equal bargaining power to choose how to allocate their risk. If parties do not, or are not able, to contract out of proportionate liability schemes, and where all joint venture contractors are actively involved in construction activities and all fail to exercise reasonable care, the maximum liability of each will be that proportion of the total loss which the court considers fair having regard to the extent of each contractor’s responsibility.⁴⁰

Apart from being unsuitable from a risk allocation perspective, there is also doubt over whether proportionate liability regimes can be applied in arbitration proceedings. Doug Jones suggests it is unlikely.⁴¹ The Victorian Supreme Court has recently held that where proportionate liability is to apply between parties to an arbitration, it must do so through an express or implied term to that effect.⁴²

This makes good commercial sense. Arbitration is the preferred dispute resolution mechanism between all parties in construction disputes.⁴³ Courts are willing to have the disputes which the parties agreed to be referred to arbitration determined at arbitration. This agreement should not be interfered with by proportionate liability regimes.

It is worth noting that it may be possible to avoid a proportionate liability regime by using a carefully drafted indemnity clause where the JV members agree to indemnify each other to the extent of their respective investments, regardless of the outcome of any litigation.⁴⁴ This could be, for example, a 40-60 per cent split. This is, of course, dependent on both JV parties staying solvent. If one party becomes insolvent, the other will likely be saddled with a bigger liability than contemplated in the JVA agreement.⁴⁵ However, it is unclear whether or not an agreement such as this would supersede a court order or be considered by the court when making its determination on proportionate liability.⁴⁶

The proportionate liability legislation should not apply in construction contracts, because it should not interfere with JV parties who agree to allocate their joint liability in a particular way. It also is inconsistent with arbitration, the most commonly used dispute resolution method in the construction industry. Successful JVs will be transparent as to the provision of resources from the parties. In order to clearly understand their risks, parties must define their economic independencies, including liability.

Conclusion

The delivery of major projects already involves substantial risk to all parties involved. While JVs can create opportunities, they also add a layer of complexity to these projects.

There is no ‘law of JVs’, so the JV agreement must provide for a balanced allocation of risk. There is also an inherent danger in the very structure of JVs. Parties, with different strategic ambitions, cultures and balance sheets come together to achieve a common, yet risky goal of delivering a project. This can lead to large conflicts which undermine the benefit of the parties joining the JV in the first place.

JV members should place a high importance on the structure of the JV and should strongly consider an integrated model to mitigate the risk of dispute against the other JV members. In the early phase of the project, the parties must also work together to clarify not only the purpose and remit of the JV, but what the parties are co-operating in relation to and the scope of their obligations. This will allow the parties to think as ‘one’ as much as possible during the project. Once the structure of a JV is settled, a clear approach to economic interdependencies, including joint and severable liability, is essential. Proportionate liability regimes undermine effective risk sharing agreements by parties to a JV and should be avoided if possible.

JVs will continue to be a popular structure for companies to deliver major projects. However, parties must work together at the outset of the project to clarify, define and understand the allocation of risk. This requires an acknowledgement that risk in JVs lies with the differences between the parties to a JV.

Notes

1 This is a shortened version of an essay submitted for a Melbourne University Master of Construction Law subject.

2 The terms ‘Strategic Alignment’, ‘Governance’ and ‘Economic Interdependencies’ are described in Bamford, James, Ernst, David and Fubini, David G ‘Launching a World-Class Joint Venture’, Harvard Business Review, February 2004, 92–93.

3 United Dominions Corporations Ltd v Brian Pty Ltd (1984-1985) 157 CLR 1, 10 (Mason, Brennan and Deane JJ).

4 Williamson, Douglas, ‘Trade Practices Law – Its Implications for Mining and Petroleum Joint Ventures’ (1977) 1 Australian Mining and Petroleum Law Journal 59, 85.

5 See note 3.

6 White City Tennis Club Ltd v John Alexander’s Clubs Pty Ltd (2009) 2 ASTLR 116, [2009] NSWCA 114, [27] (Macfarlane JA). This passage was noted with approval by the High Court on appeal: John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1, 84 ALJR 446, [2010] HCA 19, [44].

7 O’Reilly, M, ‘Risk, Construction Contracts and Construction disputes’ Construction (1995) Construction Law Journal 11(5), 344, 347.

8 Tier one firms are capable of delivering a project worth AUD1bn solo. The tier one firms operating in Australia today are CPB Contractors, John Holland, and Acciona as per Terrill, M, Emslie, O, and Fox, L (2021) ‘Megabang for megabucks: Driving a harder bargain on megaprojects’, Grattan Institute, 20.

9 Based on analysis of all major construction work packages, on all government transport infrastructure projects valued at AUD1bn or more and begun since 2006, whether completed or still in progress, as per Terrill, M, Emslie, O, and Fox, L (2021) ‘Megabang for megabucks: Driving a harder bargain on megaprojects’, Grattan Institute 21.

10 Lewis, Dean and Connor, Vincent, Global joint ventures require consistent approach to liability ‘Pinset Masons Out-Law Analysis’ article, 4 December 2021: www.pinsentmasons.com/out-law/analysis/global-joint-ventures-require-consistent-approach-liability, accessed 26 January 2023.

11 Jones, Doug ‘Proportionate Liability Revisited’, 8th Pinset Masons Lecture, 17 November 2020, 18, Timna Jacks and Patrick Hatch, ‘West Gate Tunnel budget blows out by $3.3 billion, Transurban reveals’, The Age (9 August 2021), available at: www.theage.com.au/national/victoria/west-gate-tunnel-budget-blows-out-by-3-3-billion-transurban-reveals-20210809-p58h0q.html, accessed 26 January 2023.

12 Terrill, M, Emslie, O, and Fox, L ‘Megabang for megabucks: Driving a harder bargain on megaprojects’ (2021) Grattan Institute, 18.

13 Bamford, James, Ernst, David and Fubini, David G, ‘Launching a World-Class Joint Venture’, Harvard Business Review, February 2004, 91.

14 ‘International Arbitration Survey – Driving Efficiency in International Construction Disputes’, Queen Mary University of London and Pinset Masons (November 2019), 7.

15 ‘Does the Construction Industry learn from its mistakes?’, Arcadis Global Construction Disputes Report (2018), 11.

16 Sir John Armitt, ‘London 2012 – A Global Showcase for UK PLC’ (Department for Culture, Media and Sport, July 2012), 24.

17 Bamford, James, Ernst, David and Fubini, David G ‘Launching a World-Class Joint Venture’, Harvard Business Review, February 2004, 92

18 Ibid.

19 M Abrahamson, ‘Risk Management’ (1983) 1 International Construction Law Review 241, 244.

20 See note 17 above.

21 Merrow, Edward W, Industrial Megaprojects: Concepts, Strategies, and Practices for Success (John Wiley & Sons, Incorporated 2011), 183.

22 Daniel Kemp, ‘Sydney Light Rail legal disputes settled with revised PPP’ Infrastructure Investor (5 June 2019), available at: www.infrastructureinvestor.com/sydney-light-rail-legal-disputes-settled-revised-ppp, accessed 27 January 2023.

23 ‘Best-laid plans: Sydney’s light rail fiasco’, Railway Technology (28 November 2018), available at: www.railway-technology.com/features/sydney-light-rail-fiasco.

24 Jenny Wiggins, ‘Acciona wins $37m financial claim against ALTRAC on George Street light rail’, Financial Review (22 May 2018), available at: www.afr.com/companies/acciona-wins-37m-financial-claim-against-altrac-on-george-street-light-rail-20180522-h10dya, accessed 27 January 2023.

25 David Kinlan, ‘Joint Ventures: Integrated or Vertical split? Linked In Pulse (16 June 2020), available at: www.linkedin.com/pulse/joint-ventures-integrated-vertical-split-david-kinlan, accessed 27 January 2023.

26 Melbourne Metro Rail Authority and Victoria State Government, Tunnel and Stations Public Private Partnership (Project Summary, February 2018) 20.

27 Doosan Enpure Ltd v Interserve Construction Ltd [2019] EWHC 2497 (TCC).

28 Ibid, para 1.

29 Ibid, para 2.

30 Ibid, para 11, 50.2.

31 Clause 53.3 provided: ‘The Project Manager makes a preliminary assessment of the Contractor’s share at completion of the whole of the works using his forecasts of the final price for work done to date and the final total of the prices. This share is included in the amount due following completion of the whole of the works.’ Ibid, para 11, 39.

32 Ibid, para 2.

33 ‘Why should the whole of the burden of possibly insolvent wrongdoers, fall entirely on a well insured, or deep pocket defendant?’: AWA v Daniels (1992) 10 ACLC 993, 1022 (per Rogers CJ).

34 Lewis, Dean and Connor, Vincent, ‘Global joint ventures require consistent approach to liability’, Pinset Masons Out-Law Analysis article (4 December 2021) at: www.pinsentmasons.com/out-law/analysis/global-joint-ventures-require-consistent-approach-liability, accessed 27 January 2023.

35 For example, as a means of apportioning loss between concurrent wrongdoers for claims involving, as an element of the cause of action, a failure to take reasonable care (per Tanah Merah Vic Pty Ltd and Others v Owners Corporation No 1 of PS613436T and Others [2021] VSCA 72).

36 See, for example, Civil Liability Act 2002 (NSW), Part 4.

37 Stephenson, Andrew, Lee Carroll and Nandacumaran, Jey, ‘GAR Know How Construction Arbitration’ (Global Arbitration Review – July 2021) 14.

38 Stephenson, Andrew, ‘Proportional Liability In Australia – The Death Of Certainty In Risk Allocation In Contract’ (2005) The International Construction Law Review, 1, 65.

39 Hayford, Owen, ‘Proportionate Liability and its impact on Contractual Risk Allocation’ (2010) 26 Building and Construction Law Journal 11, 21.

40 Ibid.

41 Prof D Jones, ‘Proportionate Liability Revisited’, 8th Pinset Mason Lecture, 17 November 2020, 9, citing Curtin University of Technology v Woods Bagot Pty Ltd [2012] WASC 449 (Beech J). This is because the legislation in all jurisdictions refers to the court being required to apportion liability in proceedings as explained in Transurban WGT Co Pty Ltd v CPB Contractors Pty Ltd [2020] VSC 476, [10] (Lyons J).

42 Transurban WGT Co Pty Ltd v CPB Contractors Pty Ltd [2020] VSC 476, 10 (Lyons J).

43 ‘International Arbitration Survey – Driving Efficiency in International Construction Disputes’, Queen Mary University of London and Pinset Masons (November 2019) 6.

44 Prof D Jones, ‘Proportionate Liability’ (2004) 98 (September/October) Australian Construction Law Newsletter 20, 36.

45 Stephenson, Andrew, ‘Proportional Liability in Australia – The Death of Certainty in Risk Allocation In Contract’ (2005) The International Construction Law Review, 1, 78.

46 Hayford, Owen, ‘Proportionate Liability and its Impact on Contractual Risk Allocation’ (2010) 26 Building and Construction Law Journal 11, 21.