Court of Appeal considers remoteness of damage in contract in the light of The Achilleas

20/01/10

This appeal arose out of a dispute between insurers as to liability for a flood causing substantial damage to the new offices of Slaughter and May.  A trial of the Part 20 Claim took place before Ramsey J: Siemens (the Part 20 Claimant) had settled with all the contractors up the contractual chain and sought an indemnity from Supershield (the Part 20 Defendant), its sub-contractor.  Supershield denied liability on a number of grounds but Ramsey J found for Siemens.

On appeal, Supershield challenged certain findings of the judge including his interpretation of the relevant contract and his finding that the settlement reached by Siemens was reasonable such that it could be passed on down the chain to Supershield.  Supershield alleged that Siemens had various defences (causation, remoteness) that meant that a better settlement ought to have been obtained.  The Court of Appeal dismissed the appeal.

The case is interesting for the consideration by the Court of Appeal of the issue of remoteness of damage in contract in the light of Transfield Shipping v Mercator (The Achilleas), a 2008 decision of the House of Lords.

The judgment is here.