“The Contractor shall upon and subject to the Conditions carry out and complete the Works referred to in the Employer’s Requirements, the Contractor’s Proposals …, the Articles of Agreement, these Conditions and the Appendices in accordance with the aforementioned documents and for that purpose shall complete the design for the Works including the selection of any specifications for any kinds and standards of the materials and goods and workmanship to be used in the construction of the Works so far as not described or stated in the Employer’s Requirements or Contractor’s Proposals …”
“Subject to Clause 18.2.4.1 and to Clause 18.2.4.4 the Employer hereby consents to the sub-letting by the Contractor of the Works and to the sub-letting of the design of all or any part of the Works to the Contractor’s Design Consultants and to sub-contractors carrying out substantial design works.”
“20.1 The Contractor shall be liable for, and shall indemnify the Employer against, any expense, liability, loss, claim or proceedings whatsoever arising under any statute or at common law in respect of personal injury to or the death of any person whomsoever arising out of or in the course of or caused by the carrying out of the Works (including performance by the Contractor of his obligations under Clause 16) or out of the presence on Site of any persons for any other reasons, except to the extent that the same is due to any act or neglect of the Employer or of any person for whom the Employer is responsible including the persons employed or otherwise engaged by the Employer to whom Clause 29 refers. 20.2 Subject to Article 15, the Contractor shall be liable for and shall indemnify the Employer against any expense, liability, loss, claim or proceedings in respect of any loss injury or damage whatsoever to or in respect of any property, real or personal (including any expense, liability, loss or claim arising from but not limited to obstruction, trespass, nuisance or interference with any rights of way, light, air or water) in so far as such loss injury or damage arises out of or by reason of the carrying out of the Works and to the extent the same is due to any negligence, breach of statutory duty, omission, breach of contract or default of the Contractor his servants or agents or out of the presence on Site of any person or persons for any reason whatsoever apart from the Employer or any person employed, engaged or authorised by him to be on the Site or by any local authority or statutory undertaker executing work solely in pursuance of its statutory rights or obligations. The liability and indemnity hereunder is subject to Clause 20.3 and where Clause 22C.1 is applicable excludes loss or damage to any property required to be insured thereunder caused by a Specified Peril. 20.3.1 Subject to Clause 20.3.2 the reference in Clause 20.3 to ‘property real or personal’ does not include the Works, work executed and/or site Materials up to and including the date of issue of the statement by the Employer setting out the date of Practical Completion or up to and including the date of determination of the employment of the Contractor (whether or not the validity of that determination is disputed) under Clause 27 or Clause 28 or Clause 28A or, where Clause 22C applies, under Clause 27 or Clause 28 or Clause 28A or Clause 22C.4.3 whichever is the earlier…. 20.4.1 Subject to Article 15 without prejudice to the generality of Clause 20.2 the Contractor shall at all times take reasonable precautions to prevent any public or private nuisance …”
“A policy of insurance which includes the employer and the Contractor and such other persons as the employer may reasonably require including (but without limitation) the Commissioners and DEFRA and the Fund as the insured and under which the insurers have no right of recourse against any person named as an insured, or, pursuant to Clause 22.3, recognised as an insured thereunder.”
“The Contractor where Clause 22A applies, and the Employer where either Clause 22B or 22C applies, shall ensure that the Joint Names Policy referred to in Clause 22A.1 or Clause 22A.3 or the Joint Names Policy referred to in Clause 22B.1 or in Clause 22C.2 shall in respect of each sub-contractor to whom Clause 18.2.1 refers either provide for the recognition of each sub-contractor as an insured under the Joint Names Policy or include a waiver by the relevant insurers of any rights of subrogation which they may have against any such sub-contractor in respect of loss or damage by the Specified Perils to the Works and Site Materials; and that this recognition or waiver shall continue up to and including the date of issue of any certificate or other document which states that the sub-contract works are practically complete or the date of determination of the employment of the Contractor …”
“22C.1 The Employer shall take out and maintain a Joint Names Policy in respect of the existing structures … together with the contents thereof owned by him or for which he is responsible, for the full cost of reinstatement, repair or replacement of loss or damage due to one or more of the Specified Perils … 22C.2 The Employer shall take out and maintain a Joint Names Policy for All Risks Insurance for cover no less than that defined in Clause 22.2 for the full reinstatement value of the Works …”
“The sub-contractor [Hunt] has had reasonable opportunity of inspecting all of the provisions of the main contract, or a copy thereof, except any detailed prices of the Contractor …”
“1.1 The Sub-Contractor shall be deemed to have notice of all the provisions of the Main Contract except any detailed prices … 1.2 The Sub-Contractor shall upon and subject to the Sub-Contract documents and the provisions of the Main Contract carry out and complete the Sub-Contract works shown upon and described by or referred to in those Documents. The Sub-Contract Conditions set out in … DOM/2, including Amendments 1 to 8 thereof … shall be deemed amended mutatis mutandis to correspond with the Schedule of Amendments to the Articles and Conditions of the Main Contract as further amended by the document ‘KIER GROUP AMENDMENTS dated 17.8.01’ shall be deemed to be incorporated in sub-contract DOM/2 as executed by the parties hereto. …”
“6.3 The Sub-Contractor shall be liable for, and shall indemnify the Contractor against any expense, liability, loss, claim or proceedings in respect of any loss, injury or damage whatsoever to any property real or personal insofar as such loss, injury or damage arises out of or in the course or by reason of the carrying out of the Sub-Contract Works and to the extent that the same is due to any negligence, breach of statutory duty, omission or default of the Sub-Contractor or any person for whom the Sub-Contractor is responsible. This liability and indemnity is subject to Clause 6.4. 6.4 The liability and indemnity to the Contractor referred to in 6.3 shall not include any liability or indemnity in respect of injury or damage to the Works and/or Site Materials by one or more of the Specified Perils, whether or not caused by the negligence, breach of statutory duty, omission or default of the Sub-Contractor or any person for whom the Sub-Contractor is responsible, for the period up to and including whichever is the earlier of the Terminal Dates.”
“Without prejudice to his obligations to indemnify the Contractor under Clause 6, the Sub-Contractor shall take out and maintain insurance which will comply with Clause 7.2 in respect of claims arising out of his liability referred to in Clauses 6.2 and 6.3 as modified by Clause 6.4 …”
“The Contractor shall, prior to the commencement of the Sub-Contract Works, ensure that the Employer arranges that the Joint Names Policy referred to in Clause 22C.2 of the Main Contract Conditions shall be so issued or so endorsed that in respect of loss or damage by the Specified Perils to the Works and Site Materials insured thereunder, the Sub-Contractor is either recognised as an insured under the Joint Names Policy or the insurers waive any rights of subrogation they may have against the Sub-Contractor, and that this recognition or waiver shall continue up to and including whichever is the earlier of the Terminal Dates.”
“…Where the parties have come together against a contractual structure which provides for compensation in the event of a failure of one of the parties involved the court will be slow to superimpose an added duty of care beyond that which was in the contemplation of the parties at the time that they came together. I acknowledge at once the distinction, namely, where obligations are founded in contract they depend on the agreement made and the objective intention demonstrated by that agreement whereas the existence of a duty in tort may not have such a definitive datum point. However, I believe that in order to determine whether a duty arises in tort it is necessary to consider the circumstances in which the parties came together in the initial stages at which time it should be considered what obligations, if any, were assumed by the one in favour of the other and what reliance was placed by the other on the first.”
“… The absence of a direct contractual nexus between A and B does not necessarily exclude the recognition of a clause limiting liability to be imposed on A in a contract between B and C, when the existence of that contract is the basis of the creation of a duty of care asserted to be owed by A to B. The presence of such an exclusion clause whilst not being directly binding between the parties, cannot be excluded from a general consideration of the contractual structure against which the contractor demonstrates reliance on, and the engineer accepts responsibility for, a duty in tort, if any, arising out of the proximity established between them by the existence of that very contract.”
“I would hold that, the parties having sought to regulate their relationships the one with the other by a contractual process, the law should be very cautious indeed before grafting onto the contractual relationships what might be termed a parasitic duty, unnecessary for the protection of the interests of the parties and, as will appear when reference is made to PC86, contrary to the express declarations of the engineer.”
“…In comparable situations the Courts have set their face against imposing obligations in tort where the parties have chosen to regulate their relationships by contract.”
“I wish however to add that I strongly suspect that the situation which arises in the present case is most unusual; and that in many cases in which a contractual chain comparable to that in the present case is constructed it may well prove to be inconsistent with an assumption of responsibility which has the effect of, so to speak, short circuiting the contractual structure so put in place by the parties. It cannot therefore be inferred from the present case that other sub-agents will be held directly liable to the agent’s principal in tort. Let me take the analogy of the common case of an ordinary building contract, under which main contractors contract with the building owner for the construction of the relevant building and the main contractor sub-contracts with sub-contractors or suppliers (often nominated by the building owner) for the performance of work or the supply of materials in accordance with standards and subject to terms established in the sub-contract. I put on one side cases in which the sub-contractor causes physical damage to property of the building owner, where the claim does not depend on an assumption of responsibility by the sub-contractor to the building owner; though the sub-contractor may be protected from liability by a contractual exemption clause authorised by the building owner. But if the sub-contracted work or materials do not in the result conform to the required standard, it will not ordinarily be open to the building owner to sue the sub-contractor or supplier direct under the Headley Byrne principle, claiming damages from him on the basis that he has been negligent in relation to the performance of his function. For there is generally no assumption of responsibility by the sub-contractor or supplier direct to the building owner, the parties having so structured their relationship that it is inconsistent with any such assumption of responsibility.”
“In the instant case it is clear that as between the plaintiff and the main contractor the former accepted the risk of damage by fire to its premises arising out of and in the course of the building works. Further, although there was no privity between the plaintiff and the sub-contractor, it is equally clear from the documents passing between the main contractor and the sub-contractor to which I have already referred that the sub-contractor contracted on a like basis … Approaching the question on the basis of what is just and reasonable I do not think that the mere fact that there is no strict privity between the employer and the sub-contractor should prevent the latter from relying upon the clear basis upon which all the parties contracted in relation to damage to the employer’s building caused by fire, even when due to the negligence of the contractors or sub-contractors.”
“In my opinion it is of crucial significance in the present case that a distinction is made between nominated sub-contractors on the one hand and domestic sub-contractors on the other in the terms of the insurance policy to be provided by BT under the contract. In my view the contractual provisions reinforce rather than negative the existence of a duty of care towards BT by Thompson in the circumstances of the present case.”
“The question is not whether the plaintiffs acted reasonably in settling the claim, but whether the settlement was a reasonable one; and, in considering it, the court is entitled to bear in mind the fact that costs would grow every day the litigation continued. That is one reason for saying that it is sufficient for the purpose of the plaintiffs if they satisfy the Judge that somewhere around the figure of settlement would have been awarded as damages.”
“…It is open to the defendant to show that the plaintiff was not liable to pay anything, and therefore could not say that what he did pay was a sum which he could recover against the defendant.”
“It is clear that in Fisher v Val de Travers (1876) 45 LJNS 479, Lord Coleridge CJ put two questions to the jury: (1) Was it reasonable to compromise and (2) Was the sum paid reasonable. In Biggin v Permanite Somervell LJ said (at page 32) the two question are really only one and so of course, for his purpose they were because in his case the defendant admitted that he was liable to indemnify the plaintiff and the only issue was that of quantum. In practice I think they will generally be found to merge into one another, although for example, if a point was one which could be speedily and cheaply determined, it might not be reasonable as against the indemnifier to settle, though if there was going to be a settlement, the amount might be perfectly reasonable ... Either the settlement as a whole was good as between Ching and the defendants because it was reasonable, or it was bad against them, and for the reasons I have already given it was, in my view, reasonable and therefore, good.”
“That decision [in Biggin v Permanite] supports the proposition that in a case where there has been a settlement the Court cannot apply the reasoning advanced by Mr Schaff, namely that the settlement ascertains the plaintiff’s liability to a third party so that unless the plaintiffs have acted unreasonably in failing to mitigate their loss or the loss is too remote in law to be recoverable the amount of the liability is the true measure of damages for which the defendant is liable. If this were a settlement case I would regard myself as bound to hold that the plaintiffs would have to prove that the amount for which they had settled was reasonable. … it is not entirely clear whether [the Court of Appeal] thought that the Court should consider facts which were not known (and could not reasonably have been known) to the plaintiffs at the time the settlement was known. Mr Nolan submits that the statement of Lord Justice Singleton that the defendant might in some cases show that some vital matter had been overlooked shows that he thought that it was open to the defendant to rely upon evidence which was not available to the plaintiff at the time. I do not so read it. It seems to me that Lord Justice Singleton may have meant no more than that if the plaintiff overlooked a point which he ought to have taken, the amount of the agreement would not be regarded as the correct measure of damages in the subsequent action. Biggin v Permanite is in my judgment authority for the proposition that in a settlement case the plaintiffs must establish that the amount for which they settled was reasonable and that if they do they are entitled to recover that sum from the defendants provided that the loss is not too remote to be recoverable. It seems to me that it remains to be decided in a future case whether, if the settlement was reasonable on the basis of the facts where they were or ought reasonably to have been known to the plaintiff at the time of the settlement and if the plaintiff acted reasonably to mitigate his loss, the measure of damages can be reduced by facts which came to light later and which he could not reasonably have ascertained at the time.”
“The effect of these judgments is, in my view that, assuming that loss attributable to a payment in settlement is not too remote, the plaintiff must prove that the fact and amount of the settlement were reasonable in all the circumstances. Unless he proves that, he fails to establish that the loss was caused by the relevant breach of contract by the defendant, for if and to the extent that an unreasonable settlement has been entered into, the loss has been caused not by the breach but by the plaintiff’s voluntary assumption of liability under the settlement. Proving the existence of the settlement thus goes only part of the way to proving the recoverable loss. It would also be consistent with the duty to mitigate a loss to hold that if and to the extent that a plaintiff is unable to establish that the settlement on which he founds his claim had been reasonably entered into, he has to that extent failed to mitigate his loss.”
“In other words, when properly analysed, the overall exercise which the court must do is to consider whether the specified eventuality (in the case of an indemnity) or the breach of contract (in a case such as the present) has caused the loss incurred in satisfying the settlement. Unless the claim is of sufficient strength reasonably to justify a settlement and the amount paid in settlement is reasonable having regard to the strength of the claim, it cannot be shown that the loss has been caused by the relevant eventuality or breach of contract. That is not to say that unless it can be shown that the claim is likely to succeed it will be impossible to establish that it was reasonable to settle it. There may be many claims which appear to be intrinsically weak but which common prudence suggests should be settled in order to avoid the uncertainties and expenses of litigation. Even the successful defence of a claim in complex litigation is likely to involve substantial irrevocable costs. It is thus an every day event for ship owners or their P&I clubs to settle cargo damage claims based on allegations of bad stowage or unseaworthiness for well under 50% of the claim where the alternative explanation for the damage is the inherent condition of the goods or some other cause for which the owners are not liable. Unless it appears on the evidence that the claim is so weak that no reasonable owner or club would take it sufficiently seriously to negotiate any settlement involving payment, it cannot be said that the loss attributable to a reasonable settlement was not caused by the breach by reason of which the goods are in a damaged condition.”
“Following Comyn Ching & Co Ltd Oriental Tube Co Ltd it would now be said that because the claim by Chalkley [the painter in Kiddle] was so hopeless, the settlement was unreasonable. It is clear, however, that in order to recover in respect of a settlement it is not necessary to prove that the claim settled would have succeeded or would probably have succeeded. It is enough to establish that it had sufficient substance for the settlement of it to be regarded as reasonable. Indeed, in Comyn Ching & Co Ltd Oriental Tube Co Ltd the trial Judge concluded that the settling party was not liable to the employer and therefore could not recover under the indemnity whereas in the Court of Appeal, in the face of that finding, it was held that it was sufficient to show that the employer “had a case or might reasonably have established a case”