Insurance Adviser Alert: A Judge prepared to see the wood for the trees - DAC Beachcroft

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Insurance Adviser Alert: A Judge prepared to see the wood for the trees

Published 7 July 2014

(1) The Honourable Edward Iliffe and (2) Mrs Teleri Iliffe v Feltham Construction Limited and Affleck Mechanical Services Limited

DAC Beachcroft, acting for the claimants and their insurers, have successfully obtained summary judgment in a multi-party, multi-million pound fire claim.

On 20 April 2012 a fire destroyed a luxury wooden cabin under construction on Green Island, a private retreat off Poole Harbour. The fire was widely reported by both print and broadcast media.

The construction had taken place over three phases:

  1. Excavation, foundations and concrete work;
  2. Erection of the cabin; and
  3. The application of copper to the roof, the M&E package and fit-out up to completion.

The fire occurred during the phase three works, close to completion.

The claimants alleged that the fire was caused by the negligent installation of a chimney from a log burning stove that passed through the wooden roof structure. The precise mechanism of the fire remained in dispute, and therefore also the individual sub-contractor with "actual" responsibility.

The claimants contended that the defendant, Feltham Construction Ltd (Feltham), was the main contractor acting under a variation to the phase one contract, which was governed by a 2005 JCT Intermediate Building Contract (JCT Contract). This meant that Feltham would be responsible for the acts and/or omissions of its sub-contractors.

Adjudication proceedings

The claimants had previously initiated unsuccessful adjudication proceedings against Feltham, during which the existence of a contract was not challenged by Feltham. Feltham itself commenced adjudication proceedings against its sub-contractor, Affleck Mechanical Services Ltd (Affleck).

Feltham elected not to disclose to the claimants at any stage the outcome of its adjudication against Affleck. However, unbeknown to Feltham, Affleck provided the claimants with the pleadings in its adjudication. On the summary judgment application, the claimants submitted those pleadings to the court. Despite initial objection to this approach by Feltham on the basis that the pleadings were confidential, the objection was abandoned during the hearing following comments made by the judge.

In the adjudication pleadings, reference was made to the opinions of the various experts retained by the other sub-contractors in the contractual chain. However, none of the reports themselves were made available to the court, save for the claimants'. Tellingly, Feltham pleaded in its adjudication against Affleck that its own expert agreed with the claimants' expert on causation. It had not provided its own expert's report as evidence in the adjudication brought by the claimants, as to do so "would amount to an admission of [the claimants'] claim".

The litigation

In its defence in the current court proceedings, Feltham pleaded that there was no contract between it and the claimants (a point not taken previously). Secondly, it made no admission as to the cause of the fire. The claimants thereafter issued an application for summary judgment. Feltham issued Part 20 proceedings against Affleck, but it was not involved in the summary judgment hearing.

Despite the contractual terms being far from clear, the judge felt able to summarily conclude that a contract existed on the terms of the JCT Contract and that Feltham was therefore responsible for the acts and omissions of its sub-contractors.

On causation, despite only seeing the claimants' expert report and references in the adjudication pleadings of what the other parties' experts had to say, the judge concluded that the evidence of the fire being associated with the installation of the chimney was "overwhelming", and that the danger of inconsistent findings on causation in subsequent proceedings was "remote". He considered that there was no realistic prospect of any other explanation or cause of the fire being established if the case went to trial.

This decision is a welcome example of the courts taking both a practical and and a robust approach to litigation.


Nick Young

Nick Young

London - Walbrook

+44 (0)20 7894 6100