Courts and arbitrators often have to rule on such issues of causation, without much guidance from previous case law. It is therefore helpful when the Court of Appeal says something on the issue, as in the case of Six Continents Ltd vs Carford Catering.
Carford, a firm of project managers, had been engaged by the owners of a Harvester restaurant in Worcestershire to manage the design and installation of kitchen catering equipment, including a gas fire rotisserie. The rotisserie had been hung on wall brackets fixed to a timber stud wall faced with plywood. A fire later occurred at the restaurant, and the cause was traced to the lack of a shield between the timber wall and the rotisserie. The owners sued Carford for losses caused by the fire.
The manufacturer's instructions for the rotisserie made clear that under no circumstances should a unit be fitted directly onto a heat-sensitive surface. Carford, as project manager, should have been aware of this, said the judge. The firm should also have known that the wall in question was timber. However, that was not the end of the matter. An engineer had inspected the rotisserie during installation. He had recommended that a sheet be fitted to the rear of the unit to prevent fire. Carford had passed this report to the owners with a letter that concluded: "Could you please advise us what action, if any, you wish us/the builders to take." The judge decided that although Carford was in breach of contract, the cause of the fire was not its breach, but the owners' failure to act on this warning letter.
The owners then went to the Court of Appeal. The court made the point that questions of causation are not purely factual questions; they involve value judgements. Here, said the judges, the proper question was not simply: what caused the fire? Instead it was: should the owners' failure to heed the "warning letter" relieve Carford from what was otherwise a breach of contract? As to this, the leading appeal judge said that he found it very difficult to see how sending such a letter rescued Carford. Their contract required them to take steps to prevent the risk of fire, not simply to warn about that risk. Looked at this way, the true cause of the fire was Carford's error.
Alerting a party to a problem may not be sufficient if it was your job to do something about it
The court also held that the warning letter was not sufficient in any case. It should have made clear that action by the owners was essential, not optional.
The Court of Appeal's approach was influenced by a 2002 House of Lords decision in Fairchild vs Glenhaven Funeral Services. In that case, a worker had contracted an industrial disease through inhaling asbestos dust. Two of his former employers were found to have been in breach of their duties to him. However, he could not prove the precise date on which he had contracted the illness, and therefore which of the two employers had caused the illness. This did not stop the Lords from declaring that both employers were liable, thus allowing the claimant to receive damages in what was obviously a meritorious case.
Ian Yule is a partner in solicitor Wragge & Co.