Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Net contribution definition

What does Net contribution mean? Net contribution describes allocating loss so a party pays only the proportion attributable to its own breach or negligence, rather than the whole loss. In practice, this is achieved by a net contribution clause in professional appointments, collateral warranties and construction contracts. It is not a standalone legal principle; without an effective clause, joint and several liability will usually apply, leaving a solvent wrongdoer potentially liable for 100% of the claimant’s loss, with recourse by contribution against other concurrent wrongdoers under the relevant contribution/apportionment legislation. In England & Wales and Scotland, case law has upheld clearly drafted net contribution clauses where...

Net contribution clauses in UK construction appointments and collateral warranties: rationale, CL(C)A 1978, enforceability, apportionment, and standard forms

Published by a LexisNexis Construction expert

Practice notes

This Practice Note explores Net contribution clauses—also termed proportional or proportionate liability clauses—and their use in Collateral warranties and Consultants’ appointments. It explains why consultants, some contractors, and their professional indemnity insurers frequently press for a net contribution clause to be inserted into such warranties and appointments, and why employers are often reluctant to accept them. It further reviews the ability to claim a contribution from others under the Civil Liability (Contribution) Act 1978 where no net contribution clause is in place. It also considers case law concerning the effectiveness and enforceability of net contribution clauses. For suggested written guidance to provide to clients on net contribution clauses, see also Precedent: Advice to clients—Net Contribution clauses.

What is a net contribution clause?

In modern construction projects, multiple parties are typically engaged to contribute to the design process. If that design is subsequently found to be defective, this can make it challenging to apportion responsibility for the defects and to recover the resulting losses...

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Web page updated on 21/05/2026

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