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4/29/2015

Battleofthedictionaries|MagazineComment|Building

Battleofthedictionaries
28April2015|ByJeffreyBrown
Arecentcaseshowshowcontractorswishingtoinsureagainstliabilitiesneedtobeclearaboutthemeaningofkey
words
Contractorsarefrequentlyabletoinsureagainsttheirliabilities.Intheeventofaclaim,it
isinallpartiesintereststoknowtheextent,ifany,oftheinsurersindemnityassoonas
possible.Thisisnotalwayseasy,especiallywhenidentifyingthecauseoftheaccident
isdifficultandnotyetestablished.ThiswasthesituationwhichtheCourtofAppeal
facedwhendeliveringitsjudgmentinAspenInsuranceUKLimitedvsAdana
ConstructionLimitedinMarch2015.
ThecasefollowedfromthecollapseofacraneatKingsDockMillinLiverpoolinJuly
2009,operatedbyAdanaConstructionLimited(Adana)whenthecranedriverwas
gravelyinjured.Thecranewasdamagedaswellassomeadjoiningproperties.Adanas
policywithAspenInsuranceUKLimited(Aspen)coveredpublicliabilityforfaulty
workmanshipandproductliability,subjecttoexceptions.Thecourthadtoconsiderthemeaningofproductand
superstructurewithinthepolicy.
AdanawasappointedassubcontractortoBowmerandKirklandLimitedforworkwhichincludedthecastingand
fixingofareinforcedconcretepilecap,toformthebaseforthecrane.Thefourcornersofthecranebasewereto
restonthefourpilesateachcornerofthesquare.Thedesignwasundertaken,separately,bystructuraldesign
engineersBinghamDavisLimited.AfterAdanacompleteditsworks,itleftthesite.Thetowercranewas
subsequentlyerected.InoraboutApril2009thefirstcraneerectedonthebasewasremovedandaheaviercrane
erecteduponit.
Thejudgewasscepticalofmakinganynegativefindingofliabilityinadvanceofanytrialofliability
Followingtheaccident,anumberofclaimswereissuedintheHighCourtaswellasthecountycourtagainst
BowmerandKirkland,BinghamDavisandAdana.Inoneinstance,BowmerandKirklandpaid1.75min
settlementofaclaimforthedamagetothecraneandmightseekacontributionfromBinghamDavisandAdana.
Expertshadconcludedthatthecollapsewasduetoafailureoftheconnectionsbetweenthecranebaseandthe
pilescausedeitherbyoverloadingorbyAdanasfailuretoplacethedowelsdeeplyenoughintothepiles.Adanahas
notadmittedliability,andtherehasbeennorulingeithertothiseffectbyanycourt.
ItisinthesecircumstancesthatAdanasinsurers,Aspen,soughtadeclarationfromthecourtthatthatithadno
liabilitytoindemnifyAdanaunderitspolicy.Thejudgeatfirstinstancewasscepticalofmakinganynegativefinding
ofliabilityinadvanceofanytrialofliability,orastatementofassumedfacts,aviewsharedbytheCourtofAppeal.
Itproceedednonetheless,hopingthatitwouldserveausefulpurpose.Aspenreliedontwomainarguments.Firstly,
thattheconcretebasewasaproduct.Thusitfellwithinanexclusionwithinthepolicy.Thejudgeatfirstinstance
heldthattheconcretebasewasnotaproductandtheCourtofAppealagreed.Adanascontractwasforthesupply
oflabourandmaterials.Theconcretebasewasthuscreatedonsiteandnotinafactory.Itcouldnotbepurchased
asacomponent.Adanahadcarriedouttheconcretingworksforthepurposeofsecuringafoundationforthecrane
onthesite.Thefactthattheworkscreatedsomethingdidnotmeanitwastoberegardedasaproduct.Product
liabilitydoesnotextendtodefectiveinstallation.Thetwoaredifferent.Iftheproductwassatisfactorybutinstalledin
thewrongway,thereisnocoverforproductliabilitybutthereisfordamagecausedbybadworkmanshipwithinthe
publicliabilitysection.
http://www.building.co.uk/professional/legal/battleofthedictionaries/5074984.article

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4/29/2015

Battleofthedictionaries|MagazineComment|Building

However,theappealwasallowedinpartduetothesuccessofAspenssecondargument.Itheldthatthedamageto
thecranewastoberegardedaslossordamagetoanysuperstructurearisingfromthefailureofAdanasfoundation
workstoperformtheirintendedfunction.Thusthisdefinitiondidnotmerelyincludebuildingsabovethegroundbut
theyextendedaswelltoacranewhichwastositonthetopofthefoundationseventhoughitwasintendedtorest
temporarily.TheCourtofAppealrejectedtheargumentthatthesuperstructurewasareferencetothebuildingabove
thefoundations.
ThisdecisiondidnotdetermineanyliabilityonthepartofAdana,butwillhaveassistedtheinsurerstodetermine
theirownliabilityunderthepolicy.Italsobringsclaritytothemeaningofkeywords.
JeffreyBrownisapartnerintheLondonofficeofVealeWasbroughVizards

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