London’s Court of Appeal today confirmed that a clause in a contract that excluded engineers Arup from liability for asbestos found on a project did indeed exempt it from liability for asbestos found on a project.
The lawsuit was brought by a house builders Persimmon Homes, Taylor Wimpey and BDW Trading. It relates to a consortium project to develop Barry Docks in Barry, near Cardiff.
According to today’s judgment, written by Lord Justice Jackson, the consortium hired Arup in 2009 to provided engineering services on the project. Arup had worked on the site before.
The consortium agreed to pay Arup £655,000 for the job. A line in the agreement between Arup and the consortium stated that “liability for any claim in relation to asbestos is excluded”.
Asbestos was found on the site in 2012. The consortium “took the view that Arup had been negligent in failing to identify and report that asbestos at an early stage”, and sued.
However, in a judgment in 2015 a High Court judge dismissed the claim based on the liability exclusion in the agreement.
At a hearing earlier this month, lawyers for the consortium attempted to overturn this ruling. They argued that the clause “excluded liability for any claim against Arup for causing the presence of asbestos”, not for failing to find asbestos.
However, the Court of Appeal today rejected this as an “ungrammatical” reading of the clause.
“It would be nonsensical for the parties to agree that Arup are not liable if asbestos is moved from one part of the site to another, but are liable if it is left in place.”
The ruling also rejected arguments that Arup could still be sued for general negligence.
In the ruling, Jackson J said that the risks Arup as a contractor agreed to take on were reflected in their bill.
“In major construction contracts the parties commonly agree how the will allocate the risks between themselves, and who will insure against what,” he wrote. “There is no need to approach such clauses with horror and a mindset determined to cut them down.”
“Contractors and consultants who accept large risks will charge for doing so, and will no doubt take out appropriate insurance. Contractors and consultants who accept lesser degrees of risk will presumably reflect that in the fees which they agree.”
Persimmon Homes & ors v Ove Arup & Partners Limited & ors Court of Appeal (Jackson LJ, Beatson LJ, Moylan LJ), 25 May 2017.
