In a ruling with significant implications for the construction sector, the High Court held in March 2024 that net contribution clauses — commonly used to limit liability in construction contracts — are unenforceable when applied to claims brought under the Defective Premises Act 1972 (DPA).

The case, Vainker & Anor v Marbank Construction Ltd & Ors [2024] EWHC 667 (TCC), centred on residential homeowners who sued multiple parties — including a design-and-build contractor and subcontractors — for alleged defects at their property. The contractor sought to rely on a net contribution clause, arguing it should only be liable for its own share of the blame, not that of other parties.

However, the Court ruled that such clauses contravened section 6(2) of the Unfair Contract Terms Act 1977 (UCTA), which prohibits attempts to limit liability for personal injury or property damage caused by negligence, where a statutory duty applies. Since the DPA imposes strict duties to ensure dwellings are built to an appropriate standard, and since the claims related to property damage, the clause was held void and unenforceable.

This decision reaffirms that developers, contractors, and construction professionals cannot contract out of key statutory responsibilities — and that contractual terms seeking to limit liability must be carefully drafted to avoid conflict with consumer protection and statutory building obligations.

What Are Net Contribution Clauses?

Net contribution clauses are contractual provisions often found in construction and design agreements that aim to:

• Limit a party’s liability to only their share of responsibility in multi-party disputes
• Prevent one defendant from being held jointly liable for the entire damage, especially where others contributed to the loss

They are typically used to guard against the risk of one party being left "holding the bag" if other contributors to the defect cannot be pursued (due to insolvency or limitation periods).

Until now, they’ve been considered a reasonable risk allocation tool in complex projects — but this ruling calls their enforceability into question in cases involving residential property and DPA-based claims.

Why This Matters to Construction Clients

This case has far-reaching consequences for:

• Developers and contractors using net contribution clauses in standard terms
• Design-and-build firms or main contractors relying on subcontractor input
• Any party undertaking residential construction or refurbishment work

If you’re working on dwellings — including build-to-rent, PRS, or mixed-use developments — and something goes wrong, you could find yourself fully liable even if others contributed to the defect.

The Court’s reasoning highlights that:

• The DPA is protective legislation — aimed at safeguarding homeowners
• Clauses limiting obligations under the DPA will be treated with scepticism
• Standard contract terms must align with statutory building duties, not undermine them

Practical implications:

• Review all design and construction contracts for net contribution clauses
• Seek legal advice on rewording clauses for enforceability
• Be aware that simply copying standard clauses from commercial contracts may not be valid in residential contexts
• Document your processes thoroughly to demonstrate fulfilment of duties under the DPA