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Published 15 septiembre 2016
The Court of Appeal recently handed down judgment in Howmet Ltd v Economy Devices Ltd & Others (2016) in which it considered a manufacturer's continuing liability for defective products and how the knowledge of employees should be attributed to companies.
Factory owners claimed damages against the manufacturer of thermolevels that had been installed in heated industrial tanks used in the manufacture of aerospace products. The thermolevels were meant to protect against the risk of fire if the tanks were empty or the liquid level inside them was too low.
In December 2006, the thermolevel in one of the tanks failed and a small fire broke out which was extinguished by factory personnel. In mid-January 2007 there were a number of thermolevel malfunctions in other tanks. At the end of January 2007, there was another tank fire following a thermolevel malfunction which was again extinguished by factory personnel. Engineering and facilities managers at the factory, realising that there was a problem with the thermolevels, implemented a change in procedure to guard against the risk of future fires and purchased float switches. However before the float switches were installed, there was a third fire on 12 February 2007 when a heater was switched on in an empty tank . The thermolevel in the tank failed to operate and no factory personnel were around to extinguish the fire. The factory was destroyed.
The High Court found that the thermolevels were "unreliable, unpredictable in operation and unacceptable as a critical safety device" and that the factory personnel's knowledge of this should be attributed to Howmet (the factory owners). Since Howmet was no longer relying on the thermolevels to prevent tank fires, this broke the chain of causation. As a result Howmet's claim in negligence against the thermolevel manufacturer failed.
Howmet appealed against the High Court's findings (a) about the knowledge that had been attributed to the company and (b) that there had been a break in the chain of causation because of Howmet's non-reliance on the thermolevels. Howmet's appeal was dismissed on various grounds including the following:
This decision highlights the responsibility of end users who continue to use goods which they know are defective and, depending on the facts, offers a shield for manufacturers facing subsequent negligence claims.
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