In May 2012 the High Court handed down its decision in the latest case of Leather Sofa Litigation (Argos Ltd and others v Leather Trade House Ltd  EWHC 1348 (QB)). This decision marks the likely end of the long-running series of claims arising out of leather sofas which caused their owners injuries.
The claimants (Argos Ltd, Homebase Ltd, Hampden Group Ltd and Argos Distributors Ireland) are all part of the same retail group which, as part of their activities, previously sold leather furniture imported from China. In 2007, consumers began to complain of allergic reactions caused by contact with the furniture. This ranged from minor skin complaints to more serious respiratory problems. The consumers subsequently brought a group action, where it was alleged that the cause of the injuries was a biocide named dimethyl fumarate (the chemical), an anti-mould chemical contained in sachets attached to furniture and its packaging, which was absorbed into the leather. As the claimants had failed in their duty to ensure the products they sold were safe, they admitted liability and agreed to pay a total of £17m in compensation.
In this latest case, the claimants sought to recover the settlement amount from Leather Trade House (LTH), a company they engaged to provide testing and advice in relation to leather. The claimants alleged that:
- in breach of contract and negligently, LTH advised it that the chemical was safe;
- alternatively, that LTH, in breach of contract and negligently, failed over a prolonged period to alert them to the fact that the chemical in the sachets was not safe; and
- as a result of these failings, LTH permitted the sachets to be used by the suppliers of the furniture and so caused the injuries to consumers which led to the claimants’ financial losses.
The case was tried on liability only. In passing judgment, Mrs Thirlwall J upheld the claimants’ case concluding that:
- LTH had, in breach of its duties, led the claimants to believe that the anti-mould agent was safe, or at least not unsafe to use.
- causation was established because a competent toxicologist would have been bound to advise the claimants that the chemical was restricted for use in the EU (in the UK, pursuant to the Biocidal Products Regulations 2001). In making this decision the judge referred to the fact that LMT’s leather toxicologist failed to appreciate she was advising in an area beyond her expertise and that she should have consulted a specialist chemist.
- further, it was overwhelmingly likely that, had the contract been competently performed, LMT would have discovered that the chemical was a skin irritant, and so the leather products would not have been sold in the state in which they were.
This case serves as a reminder of the established law that where advice is sought on a topic outside an adviser’s area of expertise, it is up to the adviser to say so. If they recognise this they should ensure they pass the enquiry on to someone who can respond appropriately. If the adviser nevertheless proceeds to advise, then the standard of competence imposed will be that which applies to those who do have relevant expertise.
The case also highlights the importance of defendants (and their insurers) in group actions considering whether they will be able to seek indemnity and/or contributions from other parties. If there is this possibility it may be better for them to try and settle the underlying claim swiftly, and avoid the associated costs of fighting the claims, and then pursue an additional claim to recover these sums at a later date.