Contribution Theory

Contribution is a label used to describe the remedy that A has against B to recover some portion of the money A paid to C that C could have recovered from either of A or B, where A’s payment to C reduces the amount of B’s liability to C by some portion of the amount of A’s payment. The traditional justification for allowing A to collect from B is that A’s payment benefits B to the extent that it reduces the amount of B’s liability to C. It is usually said that this benefit to B is a necessary element of a successful contribution claim. However, in some circumstances, an event occurs after the common liability of A and B to C came into existence which has the effect of providing B, but not A, immunity to a claim by C in respect of the loss for which A and B once had the common liability. A pays C after that event occurs, at a time when B is no longer liable for any portion of the amount A pays to C. A then claims contribution from B. B’s defence will be that the contribution claim must fail because of B’s immunity to C’s claim. B asserts that A’s payment to C did not benefit B because B can not be held liable for any portion of that amount, therefore A cannot establish a prerequisite for contribution. Will A’s contribution claim succeed or fail?

Continue reading