United Marine Aggregates Ltd v GM Welding & Engineering Ltd [02.04.12]

Contractor not liable for fire started during employee’s welding as reasonable care taken and not reasonably foreseeable. The Claimant owns a large aggregate processing plant by the Thames. The Defendant worked regularly for the Claimant and was carrying out welding on site when a fire caused extensive damage to the plant. In proceedings against the Defendant, the Claimant alleged the fire was caused by a breach of duty, either in contract or tort, by the Defendant.

Decision

The Judge held that the duty owed by the Defendant was to use reasonable care and take certain specified precautions. Even if the contractors’ working procedures were inadequate, that did not compel the court to find that they were not carried out with reasonable care. The answer to that question must depend on the reasons why the procedures were inadequate.

The Judge explained that what constitutes reasonable care has to be that which is reasonable as between the Claimant and the Defendant in the context of the particular operations being carried out at the time. He said, "the concept of reasonable care is not some absolute standard that exists independently of its context. Conduct that is reasonable in one context may be unreasonable in another".

From this perspective, the Judge found it relevant that the Claimant was a knowledgeable client that knew its own plant and demanded high standards of safety, imposed its own hot work procedures and knew of, and was satisfied with, the precautions the Defendant had been taking.

The Judge’s conclusion that there had been no breach of duty by the Defendant was also influenced by his view of Mr Smith, their employee who carried out the welding. The Judge described him as a "craftsman of integrity" and could see no reason why he should have exercised any less care on the occasion of the fire than he had on any other.

The Judge found that the sequence of events that caused the fire was not reasonably foreseeable and the Defendant could not be criticised for failing to take precautions that would have prevented it.

The Judge also held that, had the Defendant been found liable, their claim against their insurers for an indemnity would have failed because they were in breach of the burning and welding warranty in the policy.

Comment

This case demonstrates the problems that can arise for a claimant in recovery claims. Although the court found that the defendant contractor probably caused the fire, it also decided the contractor was not liable for the damage the fire caused.

Many will be surprised by this outcome, which shows that, when determining liability, a court will go further than simply deciding whether the act of a defendant caused the fire. The court will consider the issue of breach of duty against the background of how far a defendant complied with a claimant’s safety procedures and how far a claimant permits working practices that do not comply with its own safety requirements.

Finally, the consequences of failing to comply with an insurance policy were starkly illustrated in the case. If the Claimant had succeeded, the Defendant may have faced financial ruin since they would not have been able to rely on their liability policy to claim an indemnity.