Amongst Spanish jurists there is a common joke relating to the “pendulum of justice”. This joke refers to the frequent way our judges and courts go from one interpretation of the law to the opposite extreme. Just like the constant swing of a pendulum.
One of the subject matters that provides a very good example of this pendulum, is that of liability in tort (extra contractual liability) which over the years has been interpreted inconsistently by the Supreme Court ways depending on the trend at the time. Thus, in the 1980’s a process of strict liability was introduced and took shape in the 1990’s. However, the new Millennium brought with it less enthusiasm for strict liability to the extent that the most recent trend outlined by the Supreme Court appears to be to veer away from strict liability preferring instead proof of fault/negligence-based liability.
However, once again the pendulum appears to be swinging in the opposite direction, with the Supreme Court once again revising and redefining its approach to liability – as can be seen from their most recent Judgment of the 28th May 2018. Something very similar to strict liability would again appear to be in fashion.
This Judgment arises from the context of the unfortunate, but common event of a gas explosion at a private dwelling. This explosion occurred in Tarragona in 2005 and caused not only significant property damage, but also sadly, serious personal injuries and deaths. Having completed the investigation of the cause of the explosion, it was determined that the explosion was the result of an accumulation of gas of unknown origin, such that several injured parties commenced litigation against the gas supplier GAS NATURAL and their civil liability insurer, as the owners of the gas installation and the party responsible for the maintenance of that installation.
On the 22nd October 2013, the Court of 1st Instance Nº2 of Tarragona found that since the origin of the accumulation of the gas was unknown, and following the preferential application of caselaw that had up to that moment determined that where the cause of a fire of explosion is unknown, liability falls on the party responsible for the control, in this case of the gas supply. In this way, liability for the incident fell on the owner of the property, leaving GAS NATURAL and their insurer free from liability vis à vis the injured parties. This judgment was upheld by the Appeal Court of Tarragona, forcing the injured parties to seek redress from the Supreme Court.
And the Supreme Court, reversing the ruling of the two lower courts held that the fact that it was unknown why there was an accumulation of gas could not allow GAS NATURAL to escape liability, given that it was precisely GAS NATURAL that had the means and measures to explain why there had been such an accumulation and had failed to do so. Thus, the Supreme Court ruled that GAS NATURAL and their insurer should pay the sum in damages of €2m plus interest.
Consequently, and although the Supreme Court failed to fully explain their legal reasoning, the following conclusions can be clearly drawn:
- That the liability of the gas supplier, though not strict is a liability that arises from a risk generated by the supply of gas;
- That, in the context of such a risk generated by the supply of gas, there is a presumption of liability arising against the party who supplies that gas, and
- That in any event, the party that generates the risk can escape liability if they prove that the damage caused was not the result of their negligence or fault.
From a practical point of view, this new Judgement will be relevant in the following aspects:
- Based on this Judgment, the Supreme Court appears to embrace a tendency in certain cases of a liability for risk;
- The conclusions reached by the Supreme Court can be applied by analogy to extracontractual claims arising from other sectors such as electricity, gas stations, hydro stations, etc.; And
- In the specific case of fires and/or explosions, this Judgment widens the scope to pursue a claim – not only against the party that has the control of the property at the time of the fire/explosion but also against other parties whose potential liability arises from the risk generated by their commercial activity (supply of gas, electricity, etc.) – and who potentially have deep pockets and mandatory adequate insurance coverage.
All said, whilst the pendulum will no doubt continue to swing, at least at this moment in time, this latest judgment is very good news for injured parties but not so good for the big energy suppliers.