In Howmet Ltd v Economy Devices Ltd & Others the Court of Appeal examined the effect of knowingly using a defective product and whether such knowledge amongst employees could be attributed to the employer company.

The claimant claimed damages as a result of a fire which destroyed their factory.

The claimant had been using the defendant’s product, a “Therm-o-level”, as a detection device. The Therm-o-levels were installed in heated industrial tanks to detect if liquid levels became too low, since low liquid levels created a fire hazard.

On two occasions there were device failures and small fires occurred which were extinguished by factory personnel. Engineering and facilities managers were made aware of the failures and decided to amend the company’s processes. However, before the changes were implemented a further fire occurred, but this time there was nobody around to extinguish it and the factory was destroyed.

The Court of Appeal dismissed the claimant’s claim against the defendant manufacturer.

The claimant’s employees were aware that the use of the Therm-o-level was unacceptable as a safety device in light of the two previous fires. Whilst generally the manufacturer will be liable for damage arising from a defect in its product, the claimant in this case became aware of the defect but continued to use the product anyway, and as such the court held that they did so at their own risk.

Lady Justice Arden highlighted that whilst continued use of a knowingly defective product will usually relieve the manufacturer of any liability, this might not always be the case, referring to Sir Donald Nicholls V-C in Targett v Torfaen Borough Council:

“Knowledge of the existence of a danger does not always enable a person to avoid the danger… Whether it does so depends on all the circumstances. It will do so only when it is reasonable to expect the plaintiff to remove or avoid the danger and unreasonable for him to run the risk of being injured by the danger”.

However, in this instance, the court found that the claimant’s employees did not do enough to remove or avoid the danger posed by the defective Therm-o-level thus assuming the risk in its continued use.

The court also held that, in this case, the employees’ knowledge of the defect was attributable to the claimant company, despite assertions that the more senior managers were unaware. The court said that steps should have been taken to report the full position to the senior manager in light of the high level of danger posed by the defect and that the claimant company could not rely upon the manager’s ignorance.