Date 26 June 2006
The recent explosions at the Buncefield Oil depot caused extensive damage to neighbouring property and businesses. Whilst insurance cover may be a quick answer to repair and replacement of damaged property and contents inevitably some businesses will incur additional uninsurable losses.
Ultimately the insurers and business will look to the owners/occupiers of the Buncefeild Oil depot for the recoverability of these uninsured losses flowing from the owner/occupier’s negligence. At present with the cause of the fire still unknown the strict liability responsibility for the storage of “dangerous substances” is likely to be of immediate interest to all parties effected. It is very likely that the recent case of LMS International Ltd & Others v Styrene Packaging and Insulation Ltd & Others will be considered in some detail in the following months.
The 1866 case of Rylands v Fletcher the courts set a precedent for strictly liability (meaning a Claimant does not need to prove that the Defendant was at fault) for “anything likely to do mischief if it escapes” where there was a “non natural user of the land” with prima facie responsibility for “all damage which is a natural consequence of its escape”.
Whilst the courts have been keen to confine the principle of strict liability preferring such matters to be legislated by Parliament it has survived two attempts to abolish the principle in its entirety. In LMS International Ltd & Others a defendant was found strictly liable for the escape of fire causing damage to neighbouring properties where it had kept flammable material on the property. In his conclusions the Judge considered and answered positively the following five stage test:
- Did the Defendants bring onto the property things which were likely to cause and/or catch fire?
- Was the flammable substance kept in such condition that if ignited the fire would spread beyond the property?
- Did the storage and/or use of the flammable substance represent a recognisable risk to the Claimant?
- Did the Defendants use of the land amount to a non-natural user?
The Judge also considered the House of Lord’s comments regarding statutory regulation and insurance in the case of Cambridge Water Co Ltd v Eastern Counties Leather Plc but found that even though there were various regulations in relation to fire and health and safety it did not provide “an exhaustive code of liability for a particular form of escape” which would override the Rylands v Fletcher principle. Further, the Judge preferred the reasoning that the existence of insurance would not be determinative of a party’s right of action in law, although evidence on the insurance position was not offered to him. Accordingly, without the need for the finding of any culpability on part of the Defendant it was held liable for the damage caused to the Claimants.
For more information on the Buncefield Oil Depot please contact Robert Ryall or Lynsey Newman on 01727 798000.
© SA Law 2006
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