Joint and Several Liability
When two separate parties engage in the same conduct that causes tort liability to a third party, they are held jointly and severally liable for the impact on the injured party.
In outsourcing, situations may arise where the enterprise customer and the service provider may be jointly and severally liable to a third party.
In contract negotiations, such risks need to be identified and allocated in the contract. In addition, the parties should:
- design the scope of services and the relationship of the parties so as to mitigate the potential negative impact of the services on third parties, where possible;
- obtain appropriate insurance; and
- where applicable, consider the suitability of the outsourcing itself to the risk of incurring such risks.