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The Court of Appeal reviews Fire Claims & Claimants’ knowledge

Howmet v EDL, Court of Appeal, [2016] EWCA Civ 847

On 31 August 2016, the Court of Appeal (Jackson LJ, Arden LJ and Sir Robert Akenhead) dismissed an appeal brought by Howmet Limited against the decision of Edwards-Stuart J ([2014] EWHC 3933 (TCC)) dismissing a claim against EDL Limited, the manufacturer of a thermolevel safety device. The case raised important issues of product liability, causation and the effect of the knowledge of Claimant companies of risks.

Howmet made precision components for the aerospace industry. One of the processes (the grain etch line) involved dipping castings into heated tanks of liquid. In 2005, devices known as thermolevels were installed in the tanks to avert fire risk. One of their functions was to detect when the liquid level fell below the appropriate depth, because if the heater remained on when the tank was empty or nearly empty there was a high risk of fire. EDL manufactured the thermolevels. In December 2006, around six weeks after installation, a thermolevel failed, causing a fire which was extinguished before any harm was done. On 29 January 2007 the same thermolevel failed. The fire was extinguished without harm. On 12 February 2007, the same thermolevel failed and a catastrophic fire destroyed the factory resulting in losses exceeding £20 million.

Howmet brought a claim against EDL in negligence under principles formulated in Donoghue v Stevenson and under the Electrical Equipment (Safety) Regulations 1994 (“the 1994 Regulations”). Edwards-Stuart J dismissed the claim as although he accepted that the thermolevel was unsafe, Howmet had had knowledge of the malfunction, and had not been relying on the thermolevel at the date of the fire. He further held that the claim failed for lack of proof of causation. Howmet appealed to the Court of Appeal who heard the appeal over the course of three days in July 2016.

The Court of Appeal dismissed the appeal. They held that the relevant employees were those to whom the factory owner had entrusted the task of maintaining and operating the grain etch line in a safe manner. Those employees were the facilities manager, who was a senior member of the team, the plant engineering manager, and the plant engineering technician. The three employees who operated the grain etch line during the week all knew about the malfunction. The collective knowledge of all six employees was to be attributed to the factory owner.

Jackson LJ held that the law restricted a manufacturer’s liability to the end user as once an article had passed through the factory gate, the manufacturer had no control over who would use it or how. He went on to hold that it was clear that if one person in a corporate hierarchy became aware of a dangerous situation in the workplace and failed to report it up the line, the company could not rely on the ignorance of its more senior managers in subsequent litigation. On the evidence the factory owner knew by early February 2007, on account of the knowledge of its departmental manager, that the thermolevel was malfunctioning. The effective cause of the fire was not that malfunction, but the failure of the system which the factory owner put in place to protect the tank once it knew of the malfunction. That state of affairs defeated the factory owner’s claim in negligence, either because the manufacturer owed no continuing duty by that time, or because causation had not been established.

As to the claim under the 1994 Regulations, the Court of Appeal held at the date of the fire, the factory owner could not be characterised as a person affected by the manufacturer’s breach of the Regulations because it was not the malfunction of the thermolevel which caused the fire.

Ben Quiney KC and James Sharpe (instructed by Reynolds Porter Chamberlain LLP) appeared on behalf of the Appellant and Andrew Bartlett KC and Alexander Antelme KC (instructed by Weightmans LLP) (all members of Crown Office Chambers) appeared on behalf of the Respondent.

A copy of the Judgment can be found here.

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