ABSTRACT
The usual rule under most systems of law is that ‘the guilty party pays’. Therefore, if loss or damage or personal injury is caused by the negligence, breach of statutory duty, etc., of a particular party, that party is ultimately liable to compensate the injured party either directly or indirectly. However, whilst such a structure makes commercial and practical sense in day-to-day cases where there is a limited number of affected parties, such a structure becomes increasingly unattractive where the incident arises during activities that involve a large number of affected parties engaging in complex operations pursuant to complex contractual relationships. The establishment of final responsibility in such circumstances involves substantial complexity, delay and cost in establishing causation and liability. It also means that each party is potentially at risk and must, therefore, take out separate liability and other insurances to protect its interests. This in turn results in additional layers of cost that must somehow or other be passed on to others through contractual relationships or borne as an additional overhead expense. Therefore, in one way or another, such a requirement increases the cost of the relevant operation overall. It also means that if insurers are asked to cover multiple parties, they may not be able to provide the high levels of cover that may be necessary to provide comfort in any one serious incident.
