““Client’s Goods” means any Units which the Client has the right to supply in the Territory and which are to be or have been supplied to the Client’s Customers on behalf of the Client in accordance with this Agreement (including without limitation any “2 Entertain” “Demon Music Group” and other specially branded Units). “Client’s Materials” means all items supplied by or on behalf of the Client to the Logistics Services Provider for the purpose of processing the Client’s Goods. “Logistics Services” means any of the services more particularly described in the Service Level Agreements to be carried out by or on behalf the Logistics Services Provider for the Client (which shall include by way of example and without limitation, being responsible to the extent expressly set out in this Agreement, for warehousing, stock loss, damage, insurance, storage, pick, pack and ship, invoicing, cash collection and returns processing in relation to the Client’s Goods and the Client’s Materials). “Unit” means Blu-Rays, DVDs and CDs and any other similar home entertainment media now known or hereafter devised intended for final sale or supply to a domestic consumer and, where the context so admits, associated point of sale material …”
“4.1 The Logistics Services Provider shall arrange and maintain insurance to cover its legal liabilities and the responsibilities imposed by this Agreement (“Insurance Policy”) including but not limited to: “4.1.1 all risks insurance covering loss, theft, damage to and or destruction of the Units, Client’s Goods and Client’s Materials for their full replacement/reinstatement value while in the charge, care and control of the Logistics Services Provider with a minimum sum insured limit of ten million pounds sterling (£10,000,000 ); 4.1.2 public liability insurance with an adequate indemnity limit which shall be no less than 5 million pounds sterling (£5,000,000 ) in respect of any one claim or incident and the Insurance Policy is to include an indemnity to principals clause providing protection to the Logistics Services Provider under this Insurance Policy as a principal to this Agreement; 4.1.3 product liability insurance for five million pounds (£5,000,000 ) in respect of any one claim and in the aggregate. For the avoidance of doubt, such minimum insurance levels as stated in clauses 4.1.1, 4.1.2 and 4.1.3 shall not be a limit of liability under this Agreement and the Insurance Policy is to include an indemnity to principals clause providing protection to the Logistics Services Provider under this Insurance Policy as a principal to this Agreement; and 4.1.4 the usual Employers’ Liability or Workers’ Compensation insurance in compliance with any applicable statutory regulations. … 4.7. In the event that the Units and/or DVDs and/or Client’s Goods and/or Client’s Materials are lost, damaged or destroyed in circumstances covered by the Insurance Policy … the Logistics Services Provider will use its reasonable endeavours to promote and safeguard the interests of the client in dealings with the insuring insurance company.”
“5.1 The Logistics Services Provider shall: 5.1.1 undertake the Logistics Services for the Client in the Territory using the Sony CDS System; 5.1.2 subject to the provisions of the Service Level Agreements, have the right to amend the Sony CDS System from time to time provided that any amendment shall not prevent full and proper performance of the Logistics Services; 5.1.3 hold the Client’s Materials and Client’s Goods at a secure location at the Logistics Services Provider’s premises at Enfield and at the Logistics Services Provider’s risk whilst in its possession until the Client’s Goods are delivered to the Client’s Customers, subject to the limitations set out in clause 10. 5.1.4 … raise invoices in the Client’s name for all Units supplied under this Agreement, payment to be made direct to the Client by the Client’s Customers; 5.1.9 use its best endeavours consistent with its good faith business judgment to provide the Logistics Services in line with the Service Level Agreement and the Key Performance Indicators contained therein throughout the Term. … 5.3 The Logistics Services Provider warrants to the Client that: … 5.3.2 the Logistics Services will be performed with due care and skill and in a timely manner by appropriately trained, qualified or experienced individuals… … 5.4 Subject to clause 10, the Logistics Services Provider shall indemnify the Client against all costs, claims, losses and expenses whatsoever which it is reasonably foreseeable would be incurred by the Client as a direct result of any breach of the Logistics Services Provider’s obligations, undertakings and warranties contained in this Agreement provided that the Client takes all steps reasonably available to it to mitigate any such costs, claims, losses or expenses which it might incur.”
“10.1 The Logistics Services Provider’s liability for any loss of or damage to Client’s Materials or Client’s Goods shall not exceed their manufacturing replacement cost. 10.2 The Logistics Services Provider shall be entitled to an annual allowance of 0.25% of the average monthly stock holding of the Client’s Goods and the Client’s Material for each of stock loss and stock damage for which it will not be liable to reimburse the client. Notwithstanding this sub-clause, the Logistics Services Provider shall not be liable for any loss, damage, expense, cost or liability incurred by the Client arising from or in relation to the Logistics Services Provider’s failure to provide the Logistics Services as a result of the Client’s breach of this Agreement. 10.3 Neither party shall be liable under this Agreement in connection with the supply of or failure to supply the Logistics Services for any indirect or consequential loss or damage including (to the extent only that such are indirect or consequential loss or damage only) but not limited to loss of profits, loss of sales, loss of revenue, damage to reputation, loss or waste of management or staff time or interruption of business. 10.4 Subject to clause 10.5, the aggregate liability of the Logistics Services Provider for all breaches of or in relation to its obligations under this Agreement or for any losses or liabilities which are the subject of any indemnity by the Logistics Service Provider, whether in contract, tort, for breach of statutory duty or otherwise, shall not in any event exceed the sum of£5,000,000 (five million pounds). … 10.6 Save as otherwise provided herein, the parties exclude any other terms and conditions of whatsoever kind and any warranties statutory or otherwise whether express or implied.”
“14.1 Neither party shall be liable for its failure or delay in performing any of its obligations hereunder if such failure or delay is caused by circumstances beyond the reasonable control of the party affected including but not limited to industrial action (at either party), fire, flood, wars, armed conflict, terrorist act, riot, civil commotion, malicious damage, explosion, unavailability of fuel, pandemic or governmental or other regulatory action. 14.2 The obligations of the party affected (but not the Term) will be suspended to the extent and during the time its ability to fulfil such obligations is affected by such force majeure. 14.3 The affected party shall use all reasonable efforts to remedy the effects on its operations and resume normal operations as soon as is practicable.”
“WHEREAS A Sony and the customer entered into an agreement entitled “Agreement for the provision of logistics services” on13th May 2011 under which Sony provides certain services (“the Distribution Agreement”). B The Distribution Agreement provides, inter alia, that Sony shall bear the risk of loss of or damage to certain products and materials (as more specifically defined in the Distribution Agreement) belonging to the Customer or in the custody or control and at the risk of the Customer on behalf of others whilst such products and materials (“Stock”) are under the custody or control of Sony. C Certain Stock was held at the risk of Sony at its Distribution Centre located at 6 Solar Way, Enfield, London (“the Warehouse”) on the night of8 August 2011 when the Warehouse was the subject of attack by persons acting riotously and tumultuously (“the Riot”). D In the course of the Riot the Warehouse was destroyed by fire and the Stock was stolen, lost or destroyed. E Sony had insured the Stock with the Insurers pursuant to its obligations under the Distribution Agreement (“the Insurance”) and the Insurers have appointed Loss Adjusters and others to investigate the physical loss of or damage to the Stock in consequence of the Riot (“the Loss”) and following such investigation the insurers have agreed to indemnify Sony in respect of the Loss and to make appropriate payments in respect of the Loss. … H For the avoidance of doubt, this agreement is restricted to the Customer’s claim for the physical loss or damage to the Stock and nothing herein is intended to prevent the Customer from recovering damages for consequential or business interruption losses whether resulting from the Riot, the Loss or otherwise. … J Sony, Insurers and the Customer have now agreed that the Customer’s claim for the Loss is to be valued at£8,270,573.37 …(“the Agreed Valuation”) … NOW IT IS HEREBY AGREED as follows: 1. Sony, Insurers and the Customer agree that the value of the Stock which was the subject of the Loss is the Agreed Valuation. … 3. The Customer shall accept payment of the Agreed Sony shall bear the risk of loss of or damage to certain products and materials (as more specifically defined in the Distribution Agreement) belonging to the Customer or in the custody or control and at the risk of the Customer on behalf of others whilst such products and materials (“Stock”) are under the custody or control of Sony.£8,270,573.37 …(“the Agreed Valuation”) … NOW IT IS HEREBY AGREED as follows: Valuation … in full and final settlement, discharge and 51. release of all and any liability Sony or Insurers (including their employees, servants and agents) may have in respect of the Loss whether under the Distribution Agreement, the Insurance or howsoever such liability may arise (and whenever arising). 52. … 5. For the avoidance of doubt, the settlement, discharge and release at clause 3 does not apply to … • any claim that Sony has under clause 5 of the Distribution Agreement, • any claim against Sony under clause 14 for the Distribution Agreement and • any claim against Sony under any other provision of the Distribution Agreement not directly relating to risk in the insurance of or liability for physical loss of or damage to the stock.”
“The duty is to take reasonable care, in all the circumstances, of the chattel bailed... In British Crane Hire Corporation Ltd v Ipswich Plant Hire Ltd[1975] QB 303 , it was held that the loss of, or injury to, a chattel while it is in the bailee's possession places the onus of proof on the bailee to show that it occurred without his fault. In other words, that it was not caused by any failure on his part to take reasonable care… Thus the bailee does not assume the role of an insurer … The standard of care can be high according to the value of the chattel bailed. In British Road Services Ltd v Arthur V Crutchley & Co Ltd[1968] 1 All ER 811 , there was a theft from a warehouse of a valuable lorry load of high value, namely, whisky. It was held on appeal that the defendants' system of protection was not adequate in relation to the special risks involved and the value of the chattel bailed, and that even though they had contracted with competent third parties for the security of the warehouse during the hours of darkness the defendants had nevertheless failed to discharge the burden of proof that the loss was not due to any negligence on their part. The duty to guard against loss includes a duty to take reasonable care to prevent damage by the deliberate act of a third party. In Lockspeiser Aircraft Ltd v Brooklands Aircraft Co Ltd, The Times,7 March 1990 the plaintiff warehoused the prototype of an aircraft with the defendants and it was destroyed by arson when still at the defendant aircraft manufacturer's premises. Judge Hammerton QC, sitting as a judge of the Queen's Bench Division, held that the relationship of bailor and bailee existed and that the damage was ‘foreseeable in nature if not in extent.’ The defendant had failed to take sufficient care to prevent unauthorised entry on to the premises. I emphasise the words ‘nature if not extent’.”
“Sony … must establish security perimeters at business premises under its control for physical protection, including information handling facilities and equipment. The security perimeters may consist of (1) Physical barriers such as fences, gates, exterior walls and doors; (2) Human security such as standing guard, sitting guard, moving guard and patrolling guard; and (3) Mechanical security such as entry and exit control, intruder monitoring and detection. Each security perimeter (alert line) is one of the following three: (1) First alert line: premise perimeter (2) Second alert line: building periphery (3) third alert line: room perimeter… Each security perimeter (alert line) is classified into the following three alertness levels … (1) N: Normal (2) S: Severe (3) SS: Special-Severe The alertness levels of the above security perimeters (alert lines) can be changed by the site manager’s judgment, based on a documented risk/vulnerability assessment of the premise’s business operation type, regional characteristics and social conditions.”
“Since the installation of the Sony sign the site has become more likely to be broken into, simply because of the type of product that Sony manufactures and distributes. There has been at least one break in attempt, that we know of, since the sign was installed. This break in attempt was not recorded on CCTV due to a blind spot in the system and even if this had ... been caught on CCTV, the likelihood that the image would have been of any use is doubtful. This is due to the fact that the system is old, has no intelligence and images are stored on time lapse VHS cassette, which is known to be of poor quality. The proposed solution is to replace the entire CCTV system with intelligent cameras of fixed and PTZ (Pan tilt zoom) types. Perimeter lines can be set up on the fixed cameras which, when crossed, will trigger the PTZ to focus in on the object which has breached the perimeter. All images will be stored digitally on a server with built in redundancy. Steel grills will be fitted to all glazed areas on the west side of the building, which is widely considered to be the weak spot in the security of the building. The access control system will also be replaced as there will be an interface between the two systems…”
“As a result of the recent security breach in Enfield the following actions have been identified. 1. External Security Audit – Freight Watch Group. Colin has been in touch with them to organise an audit ASAP – once completed we will pull together an action plan based on their recommendations. It may be worthwhile to set up an annual audit going forward. 2. The manual dispatch process which was being abused by the sacked employee (process required as routes need to be changed manually due to client/customer requests) will be replaced with DHL’s Intraship system … 3. A random search generator to be installed to trigger a more thorough search … 4. Our new digital security system is due to be completed in two weeks – this will ensure 100% camera coverage on the outside of the building with motion detectors 5. Site briefs have been held advising all staff of how serious the issue is … 6. 2e and DBD clients have been briefed … We are going to start testing our security measures on a regular basis by attempting to send out boxes and try to get discs out via security to ensure our new processes are robust enough. Tonight I am going to attempt to take a disc out in my laptop bag …”
“The Sony DADC facility has a house keeping manual, which provides a brief on security, plus there are documented assignment instructions for the on-site security guards. These assignment instructions, which are site specific, were created in line with Sony DADC’s requirements. However, there is no Sony DADC security policy document, which encompasses all of Sony DADC’s security policies and requirements. Documented internal security reviews/checks are not conducted at this site. However, regular checks are carried out and if something is not functioning correctly arrangements are made to have it repaired or replaced, but a check list is not used and results are not documented … The Sony DADC site is located on the left side of the road near the top of a cul-de-sac in Innova Park… The front of the Sony DADC site fronts onto a side road just off the main cul-de-sac road… Pedestrian access onto the Sony DADC site is possible from the side road/cul-de-sac road. It is possible to walk past two security barriers, which restrict vehicle access into the employee car park, and up to the building perimeter (front of building and right side of building only) plus up to a perimeter fence, which separates the car parking area from the truck yard and the left side of building/warehouse… The metal perimeter fence, which separates the car park area from the truck yard and spans from the left side of the building to the perimeter fence along the left side of the site, is approx 2 mtrs tall and constructed from an anti-climb wire mesh fencing attached to metal columns ... There are two gates in this section of perimeter fence … although these gates are of sturdy construction, it was noted by the auditor that a simple method to breach the double gates would be to cut each of the two hinges holding up the gates. Due to the gap between the gate and the frame, access to the hinges with appropriate cutting equipment would be deemed possible… The left side of the site perimeter is protected by a 6ft chain link fence, which is attached to metal supports. The left side of the Sony DADC side fronts onto a green area, which is covered in moderately dense undergrowth …perhaps weekly checks of the perimeter fence could be implemented … The rear of the Sony DADC site fronts onto a neighbouring site, a Premier hotel, and is separated by a metal perimeter fence … Although the rear perimeter fence spans from the left rear corner of the site to the right rear corner of the site (where the Sony DADC site joins with the public footpath/road), there is a truck entrance/exit set back from the public road at the right rear corner. This allows pedestrian/vehicle access between a section of the rear perimeter fence and the rear wall of the warehouse building. However, access from this area into the truck yard is restricted. A section of perimeter fence, two security barriers, two perimeter gates plus a security gatehouse protects the area from the side of the rear warehouse all to the rear perimeter fence blocking unrestricted access in to the truck yard … A section of the rear warehouse wall, near the set back truck entrance/exit, is outside the perimeter fence/gate, so this section of wall becomes the perimeter. Unrestricted pedestrian/vehicle access is possible to this section of the rear warehouse wall … There are three ground level emergency/fire doors in the rear warehouse wall, one on the inside of the perimeter fence and two on the outside. Unrestricted pedestrian access up to these two emergency doors is possible. Although these emergency/fire doors are closed and secured from the inside and are fitted with alarm contacts, which are connected to the alarm system, the doors are hinged/pinned externally. It is worth reviewing, whether a break-in would be possible if the external hinge/pin was cut-off/removed or if the doors are fitted with internal security pins which secure the door to the door frame. It is recognised that once opened an alarm contact on the fire door would activate the alarm system, but at that point the criminals would be inside the warehouse and everything is hinging on an appropriate response, which may or may not occur. The right side of the Sony DADC building/warehouse sits back approx. 50ft from the public path/road (cul-de-sac), which runs parallel to the right side of the building. There is no perimeter fence separating the site perimeter from the public path/road. Access to the building perimeter from the public path is restricted in parts by dense undergrowth/trees, a trench, a section of grass plus a section of anti-drive pebbles/stones. The pebbles/stones span out approx. 10 feet from the building wall and all along the side of the building /warehouse. However, there are a couple of sections where it is possible to easily walk from the public path /road up to the building wall and thereby along the entire building wall. There are a number of glass panels along the right building wall, some of which are at ground level. Two of the glass panels are 3 window panes wide by 12 window panes high and do not have any doors three of the glass panels are also fitted with a ground floor emergency exit … one of the window panels, which has an emergency door … the window pane on the bottom left was used by criminals to break into the building. This window/door is located at the bottom end of the right side building wall, where it joins with the rear building wall in the area where the truck entrance is set back from the road and it is possible to approach the building perimeter. Since this break-in, wire mesh metal grills have been fitted on the inside of all ground level window panes and emergency doors. The green window film has not been replaced on the bottom left window pane and permit a view into the warehouse, but was left clear so potential criminals would see the metal grill and be discouraged from attempting to breakin. Although there is some merit in this, it is the auditor’s opinion that it would be best to cover this window and restrict views through the window… It should be noted that during the security inspection, it was identified that 4 or 5 of the self tapping screws used to fix the metal grill to the emergency door had either been removed or loosened … regular documented checks by the security guards of all metal grills and security fittings would be recommended…”
“Security Management Recommendations: ➢ … FreightWatch recommend the creating of a sitespecific security policy document, which encompasses all of Sony DADC’s security policies and requirements. … Perimeter Recommendations: ➢ … a review of the hinges on the double gates located along the perimeter fence… ➢ …weekly checks of the perimeter fence … ➢ …a review of the emergency/fire doors that are fitted with external hinges/pins to determine if they present a security weakness if the hinges/pins were cutoff/removed … ➢ …the green film or a similar window screen be placed on the window pane used during a previous break-in to block views into the warehouse… ➢ …regular documented checks of all security grills and security fittings be implemented.”
“Introduction … Most property related crimes are committed because offenders have been given easy opportunities. Easy access to an industrial park or to a single storage premises, concealed areas, no demarcation between public and private space, and poor lighting or landscaping are all features of design which assist the criminal. Careful planning and design can remove these easy opportunities. … 4.1. Where a building does not have continuous occupancy, guardianship or natural surveillance, it should be designed to withstand attempts at illegal entry. … 5.1 Any crime prevention strategy is essentially one of risk management. Consequently, before an effective strategy can be developed, the risk factors involved should be identified and understood. Distribution centres and storage facilities are affected by a variety of crimes. Although burglary is the most common crime, arson, criminal damage and internal theft are also prevalent. 5.2.1 To formulate a security plan, it is first necessary to complete an in-depth risk assessment to identify the vulnerability of the premises and its contents. 5.2.2 When carrying out a risk assessment the following factors should be considered: (a) type of business; (b) attractiveness to the criminal in terms of goods, cash and possible confidential information and data; (c) degree of inherent security of the premises in relation to its construction; (d) surveillance provided either by normal public activity or security patrols of the premises or its surroundings; (e) ease of access from streets … (f) potential escape routes and egress for the removal of stolen goods; (g) vulnerability relative to local trends in crime … (i) risk of arson to the premises and contents, and goods and vehicles stored in the surrounding areas; (j) requirements of the local authority, fire authority and insurance companies… 5.2.3 The security plan should be the responsibility of a senior member of staff at the site, whose duties include an annual review of the plan … When drawing up a security plan it is important that various layers of protection are considered and that no one type of protection is relied upon to the exclusion of all others. When deciding upon types of protection to be used it is usual practice to work inwards from the perimeter of the site, considering firstly the fencing and restriction of access, then protections to the buildings and finally inner secure areas and items such as safes. … 5.5.2 The overall strategy for preventing burglary and theft in storage, industrial and distribution premises should encompass situations when the premises are open for business and when they are closed. Measures to be taken against crime should be analysed with a view to: a) dissuading a person from attempting to attack the building; b) denying access should an attempt to enter the building be made; c) slowing down or delaying the offender carrying out an attack; d) in the event of a successful attack, increasing the chances of detection by providing appropriate signalling devices to alert law enforcement agencies. 5.5.3 All storage, industrial and distribution premises are potentially at risk from arson… The principal aim of the crime prevention strategy should be to prevent the arsonist from gaining access to the site perimeter and, if this fails, to deny access to the building or to the flammable materials. Fire-resistant materials should be considered as should fire compartmentalization in order to restrict the spread of fire. Fire alarms and extinguishing systems should also be utilized to minimize loss and damage… Automatic fire detection and extinguishing systems, e.g. sprinklers, with an automatic alarm transmission facility, conforming to relevant British Standards, should be installed to provide early warning of fire. … 7.2 Perimeter fencing should be installed, where appropriate, to provide enhanced protection of the peripheral space around the site or building … … 7.6 While physical protection of a building is important, unless there is a prospect of human intervention, such as that provided by security patrols, criminals can use noisy cutting equipment and drills to try to gain access to a site. The use of external and internal patrolling security staff should be considered for high-risk sites. … 8.1 Lighting can be a deterrent to intruders and a positive aid for patrolling security staff … 9.1 Where applicable, external doors to storage, industrial or distribution premises should, as a minimum requirement, conform to the enhanced security performance standard for doors to dwellings, PAS 24-1. The number of external doors to the building should be kept to a minimum. Wherever possible, glazing should be avoided in external doors… … 11.3 Potential intruders evaluate the possibility of gaining entry to buildings by breaking glazed panels in external windows, with the aim of gaining access to locks or other security hardware. Consequently, the less glazing in the building, the lower the risk of forced entry. 11.4.2 Security grilles and bars should preferably be fitted internally… Internally fitted security grilles or bars should be set back not less than 50 mm from the internal surface of the wall and, if possible, grouted into the masonry at both ends, to a minimum depth of 75 mm. Bars longer than 600 mm should either be provided with cross-ties, welded at the intersections or otherwise made immovable or fitted separately into the masonry to a depth of at least 75 mm at each end and welded at intersections. … Retrofitting of security grilles/bars can be achieved by sinking one set of ends of a grille or bar into a cill or wall and securing the other three sides by means of welded cleats secured to the building by substantial bolted anchors, the heads or nuts of which can be welded to the metalwork of the grille. … 14.1 CCTV can be used to aid security of a site or building and can also act as a deterrent to criminal activity… 15.1 Physical security measures can be complemented by the installation of an electronic intruder alarm system, designed to detect entry through doors, windows, and the shell of the building and/or movement of intruders within a building …”
“…the strong impression I formed is that the majority of the security precautions are targeted at internal threat and not external threat.”
“If the site had been fully fenced and fitted with cat 3 doors, and the grilles had been of substantial construction, few of them would have got into the building, the site to begin with, some might have been deterred, and they might have given up knowing that the police were on the way after the first thump on the door.”
“Q. But that does not help you on working out the rating? A. No… Q. You say: ‘The door structure does not appear to even meet the lowest category of resistance of the Loss Prevention Standard 1175 as the door was breached in less than a minute with nothing but bodily force and improvised force.’ In the absence of knowing anything about the door in particular, that is the foundation upon [which] your conclusion that the door was inadequate? A. Yes.”
“Q. So, what Sony should have done is to go through an assessment process and come up with a security plan; is that right? A. Yes, I accept that … Q. Once you have a security plan, it would be good practice for it to be retained and updated from time to time, wouldn’t it? A. I would accept that would be good practice, yes… Q. I think you accept that in this case Sony didn’t actually have a security plan, as you described it, have they? A. I haven’t seen any evidence of it. I don’t know if they had one or not. Q. You have seen no evidence … of any assessments being carried out which could result in a security plan? A. No, that’s correct. I haven’t seen any evidence. … Q. Have you identified a risk assessment and a security plan in this case? A. No, I haven’t seen any evidence of that. … Q. A security review would identify the risks and vulnerabilities n the building, wouldn’t it? A. Yes, you would hope so. Q. Right. A security review would identify that the building was at risk of theft and was at risk of arson. A. Among other threats, yes. Q. Yes. And a security review carried out competently would have identified the vulnerability at the south-west corner, wouldn’t it? A. Yes. … Q. If there was no security policy, that would be a serious failing, wouldn’t it? A. Yes, I would accept that.”
“At an unsprinklered distribution centre such as this one, major losses are principally going to arise out of situations involving poor emergency response procedures, inadequate ignition source control or a natural hazard. Although automatic sprinkler protection remains the best form of defence against any fire starting in a high bay warehouse such as this one, there is no doubting the fact that prevention of fires and prompt action when they do occur, can help minimise losses …”
“Automatic sprinkler protection, supplied from an adequate and reliable water supply should be installed throughout the site to current FM Global Standards. This protection system should include ceiling sprinklers for the entire site (and beneath the mezzanines) and in-rack sprinklers within the 14m high bay racking. Fire testing and loss experience has demonstrated that the best means of preventing a serious fire is to install automatic sprinkler protection. Sprinklers would control a fire in its early stages and would help prevent it spreading to nearby storage and exposing the building structure to intense heat and eventual collapse.”
“Q. You say that the conclusions that were reached were, first of all, sprinklers would be ineffective as to the height of the warehouse because they couldn’t work a low level, and, secondly, because, if there was a small fire, they might potentially cause more damage, and that’s what you say were the conclusions that were reached in relation to sprinklers; is that right? A. I recall that conversation taking place, yes. Q. Did you look at whether you could have sprinklers inside the racks? A. We didn’t, because we were reliant on the advice from the experts to tell us what we needed. Q. So … one thing that was simply not considered, then, is whether you could have sprinklers inside the racks; is that right? A. Yes.”
“Now that the Final Certificate has been issued, it is a requirement of theRegulatory Reform (Fire Safety) Order 2005 to carry out a fire risk assessment. This deals with the ongoing fire safety matters within occupied premises. As part of the Building Regulation process you should have ensured that the relevant fire safety information is passed onto the end user of the building so that they are fully aware of the fire strategy adopted for the building. This will aid them in the fire risk assessment process. Should you require a detailed fire risk assessment to satisfy this legislation please contract me and I will be pleased to provide a quotation for this detailed service.”
“Basic security against arson by outsiders appears reasonable?” and “Is it considered that the premises are provided with reasonable means of escape in case of fire?”
“B1. The building shall be designed and constructed so that there are appropriate provisions for the early warning of fire, and appropriate means of escape in case of fire from the building to a place of safety outside the building capable of being safely and effectively used at all material times. … B3(1) The building shall be designed and constructed so that, in the event of fire, its stability will be maintained for a reasonable period.” … B3(3) To inhibit the spread of fire within the building, it shall be sub-divided with fire-resisting construction to an extent appropriate to the size and intended use of the building.”
“The Approved Documents are intended to provide guidance for some of the more common building situations. However, there may well be alternative ways of achieving compliance with the requirements. Thus there is no obligation to adopt any particular solution contained in an Approved Document if you prefer to meet the relevant requirement in some other way.”
“Sprinkler systems installed in buildings can reduce the risk to life and significantly reduce the degree of damage caused by fire. Sprinkler protection can also sometimes be used as a compensatory feature where the provisions of this Approved document are varied in some way…” 142. Section B0.21 states: “The fire safety requirements of the Building Regulations should be satisfied by following the relevant guidance given in this Approved Document. However, Approved Documents are intended to provide guidance for some of the more common building situations and there may well be alternative ways of achieving compliance with the requirements.”
“(1) The building shall be designed and constructed so that, in the event of fire, its stability will be maintained for a reasonable period. … (3) Where reasonably necessary to inhibit the spread of fire within the building, measures shall be taken, to an extent appropriate to the size and intended use of the building, comprising either or both of the following: (a) sub-division of the building with fire-resisting construction; (b) installation of suitable automatic fire suppression systems.”
“The spread of fire within a building can be restricted by subdividing it into compartments separated from one another by walls and/or floors of fire-resisting construction. The object is twofold: a. to prevent rapid fire spread which could trap occupants of the building; and b. to reduce the chance of fires becoming large, on the basis that large fires are more dangerous, not only to occupants and fire and rescue service personnel, but also to people in the vicinity of the building.”
“Single storey building A building consisting of a ground storey only… Basements are not included in counting the number of storeys in a building… Storey includes … b. any gallery in any other type of building if its area is more than half that of the space into which it projects; and Note: Where there is more than one gallery and the total aggregate area of all the galleries in any one space is more than half of the area of that space then the building should be regarded as being a multi storey building. Gallery A floor or balcony which does not extend across the full extent of a building’s footprint and is open to the floor below.”
“Q. But when one looks at the two-tier shelving itself, those consist of shelves with walkways clipped on? A. …it is correct that in these shelves the structural post at the corners go all the way from top to bottom. Whereas there are other shelves which only start at what you might call the mezzanine floor level. Q. Well, they sit on the mezzanine, don’t they? A. They do, absolutely… but this is just a matter of how the steel structure load is carried down to the ground level, which in my view is not relevant to the question of means of escape and fire safety. Here what we have is continuous walkways and working platforms all at one level, where the operators simply move around, and they are not considering when in fact there is no differentiation for practical purposes between one area of rack and another. It is all storage and racking, and people working at that level.”
“Q. So, in working out the question as to whether or not one should include the two-tier shelving … and bearing in mind it is a different type of structure, the designer has to exercise a judgment as to whether this different structure should be considered to be part of the gallery area. A. I think one has to look at the question completely the other way round, which is: is there any justification for considering that this shelving, when you are up at that raised level, somehow should be considered differently from any other shelving, also up at that level and therefore, as per Mr Jowett, be deducted from any floor measurements…”
“… the industry uses them as … requirements to be met absent a strategic alternative design process, which normally, in the case of part B, would involve a fire engineered solution. In a sense, we tend to follow one of two routes; we either meet part B on the ADB route, or we meet part B by bringing in a fire engineer to effectively advise on how else we might achieve it.”
“… that would be a normal reading of the words and, even in this table, the table differentiates between a storey and the floor area, and they use different words. If we look at the very top of the table … it says: “Floor area of any one storey”
“The way it was in 2009, I think to the casual observer, as you said, any visitors to the building walking from what I have called the mezzanine, on to the aisles of the two-tier racking, would have regarded it as a continuation of the floor … You couldn’t put a conveyor belt on it. It is not a floor like the mezzanine floor. It is not supported on fire protected columns. I don’t think the shelving at that level had fire protection. I think only the aisles had fire protection, so it is actually different.”
“Q. Effectively, you are saying that if the mezzanine does not make the building multi-storey, then you just ignore it. You ignore its floor area for the purposes of calculating the floor area for table 12. A. What I have said in my report is that adding the mezzanines didn’t actually change the area of the compartment. The compartment was contained, i.e. the compartment wall to the offices, and the external walls ... that was the whole fire compartment. And even if it had other bits of floor in it, that was still the compartment.”
“any gallery in any other type of building if its area is more than half that of the space into which it projects” and it is clarified that “where … the total aggregate area of all the galleries in any one space is more than half of the area of that space then the building should be regarded as being a multi storey building.”
“Q. You say, I think, that if the building is not multi-storey then it’s your view that the mezzanine is indeed part of the internal floor area of the building and so should be counted for that purpose, don’t you? A. Yes, I do. Q. It would follow therefore that, if this is not a multi- storey building, it’s a single storey building, just as a simple matter of arithmetic, if you add the mezzanine and ground floor together, it exceeds more than 20,000 square metres and so it doesn’t comply with the guidance in table 12 does it? A. That’s correct. May I explain? The effect of that … is you need a compartment wall to divide the space. then it’s your view that the mezzanine is indeed part of the internal floor area of the building and so should be counted for that purpose, don’t you? A. Yes, I do. storey building, it’s a single storey building, just as a simple matter of arithmetic, if you add the mezzanine and ground floor together, it exceeds more than 20,000 square metres and so it doesn’t comply with the guidance in table 12 does it? Q. Yes, you need a compartment wall, because you need to limit the area of the building to 20,000 square metres. A. Yes.”
“Sprinklers generally work, more often than not they work and they cause a dramatic lessening of risk. It goes back to the considerations that ought to have been made by designers, in a way, that why not bother with a system that has such a good track record in suppressing fires ... the point is no sprinkler was ever specified, no alternative design to what’s in the approved document was ever considered, and … I do think that this fire wasn’t that severe a fire and that the sprinkler system would have dealt with it.”
“Q. So as a matter of generality then, the statistics show, do they, that the loss, the cost of the fire, is 80 per cent less if you have sprinklers in place? A. Generally speaking that’s true. Q. But you’re obviously speaking about warehouses here, because the whole article is about warehouses? A. Indeed I am… Q. …the statistics show, and I think it’s a point you made in your own article, that generally speaking sprinklers are extremely efficacious in suppressing fire in warehouses? A. They are.”
“Neither party shall be liable for its failure or delay in performing any of its obligations hereunder if such failure or delay is caused by circumstances beyond the reasonable control of the party affected including but not limited to industrial action (at either party), fire, flood, wars, armed conflict, terrorist act, riot, civil commotion, malicious damage, explosion, unavailability of fuel, pandemic or governmental or other regulatory action.”
“The Logistics Services Provider’s liability for any loss of or damage to Client’s Materials or Client’s Goods shall not exceed their manufacturing replacement cost.”
“Neither party shall be liable under this Agreement in connection with the supply of or failure to supply the Logistics Services for any indirect or consequential loss or damage including (to the extent only that such are indirect or consequential loss or damage only) but not limited to loss of profits, loss of sales, loss of revenue, damage to reputation, loss or waste of management or staff time or interruption of business.”
“Neither party shall be liable under this Agreement in connection with the supply of or failure to supply the Logistics Services for any indirect or consequential loss or damage.”
“including (to the extent only that such are indirect or consequential loss or damage only) but not limited to loss of profits, loss of sales, loss of revenue, damage to reputation, loss or waste of management or staff time or interruption of business”
“Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such a breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e. according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it.”
“What does one mean by “direct damage”? Direct damage is that which flows naturally from the breach without other intervening cause and independently of special circumstances, while indirect damage does not so flow. The breach certainly has brought it about, but only because of some supervening event or some special circumstances …I have the guidance of the Court of Appeal as to what is meant by “consequential.”
“… Both the Millar case and the Croudace case were construing the word "consequential" in a very similar context to that which appears in this case. With Court of Appeal authority construing a phrase in a very similar context, and another Court of Appeal saying that the view previously expressed is binding in yet another similar context, it would take some radical difference in language or a radical difference in context to persuade yet a further Court of Appeal not to construe the phrase the same way ... Second, in any event once a phrase has been authoritatively construed by a court in a very similar context to that which exists in the case in point, it seems to me that a reasonable businessman must more naturally be taken to be having the intention that the phrase should bear the same meaning as construed in the case in point. It would again take very clear words to allow a court to construe the phrase differently.”
“[88] For the purposes of this issue the critical words of Article 6.8 are: "... and in no event shall DAVY by reason of its performance or obligation under this CONTRACT be liable ... for loss [of] anticipated profits, catalyst, raw material and products or for indirect or consequential damages." … [90] … The direct and natural result of the destruction of the plant was that Deepak was left without a Methanol plant, the reconstruction of which would cost money and take time, losing for Deepak any methanol production in the meantime. Wasted overheads incurred during the reconstruction of the plant, as well as profits lost during that period, are no more remote as losses than the cost of reconstruction. Lost profits cannot be recovered because they are excluded in terms, not because they are too remote. We consider that this Court is bound by the decision in Croudace where a similar loss was not excluded by a similar exclusion and considered to be direct loss…” "... and in no event shall DAVY by reason of its performance or obligation under this CONTRACT be liable ... for loss [of] anticipated profits, catalyst, raw material and products or for indirect or consequential damages." exclusion and considered to be direct loss…”
“[38] In my judgment, as in that of the Arbitrators, when Article IX.4 is properly read, the Yard's liability is limited by it and the positive obligations undertaken in Article IX.3. What Article IX.4(a) does is to make it plain that there is no liability above and beyond the express obligations undertaken by the Yard and, in particular, without prejudice to that, financial losses consequent upon physical damage are not covered by the guarantee … [39] In my judgment therefore, as in the judgment of the Arbitrators, "consequential or special losses, damages or expenses" does not mean such losses, damages or expenses as fall within the second limb of Hadley v Baxendale but does have the wider meaning of financial losses caused by guaranteed defects, above and beyond the cost of replacement and repair of physical damage.”
“(i) any indirect or consequential loss or damages under English law, and/or (ii) to the extent not covered by (i) above, loss or deferment of production, loss of product, loss of use … loss of business and business interruption, loss of revenue … loss of profit or anticipated profit … … the COMPANY shall save, indemnify, defend and hold harmless the CONTRACTOR GROUP from the COMPANY GROUP'S own consequential loss and the CONTRACTOR shall save, indemnify, defend and hold harmless the COMPANY GROUP from the CONTRACTOR GROUP'S own consequential loss…”
“[15]. The expression "consequential loss" has caused a certain amount of difficulty for English lawyers, mainly as a result of attempts to define its meaning in the interests of commercial certainty: see the line of cases that includes Saint Line v Richardsons Westgarth & Co Ltd [1940] 2 K.B. 99, Croudace Construction Ltd v Cawoods Concrete Products Ltd (1978) 8 B.L.R. 20 and Deepak Fertilisers Ltd v ICI Chemicals and Polymers Ltd [1999] Lloyd's Rep. 387. It is questionable whether some of those cases would be decided in the same way today, when courts are more willing to recognise that words take their meaning from their particular context and that the same word or phrase may mean different things in different documents. The existence of that line of authority may account for the unusual terms of clause 20(i), but those cases do not fall for discussion in this case, which turns on the meaning to be given to clause 20(ii). Nor is it necessary to discuss whether the clause derogates from one or other or both limbs of the rule in Hadley v Baxendale, since the only question with which we are concerned is whether its language is apt to encompass the spread costs which Providence seeks to recover. … [17]. "Loss of use" naturally refers to the loss of the ability to make use of some kind of property or equipment owned or under the control of the contractor or the company, as the case may be, but in this case the parties have made it clear by the words in brackets that follow that its scope is intended to be wider than that. For example, it extends to the loss of use or cost of use of property, equipment and materials and to the loss of use or cost of use of services provided by contractors, sub-contractors and third parties. Moreover, it must be borne in mind that this forms part of the definition of losses which flow from (in this case) the contractor's breach of contract but are not the immediate consequence of it. The basis of Providence's claim to recover spread costs is that they represent the cost of goods and services that were obtained and paid for but were wasted as a result of the delay caused by Transocean's breach of contract. There has to be loss of some kind to engage clause 20 at all and the words "loss of use or the cost of use of property, equipment, materials and services . . . provided by contractors or subcontractors of every tier or by third parties" are plainly apt on the face of them to cover costs of that kind. Moreover, it is interesting to note the lengths to which the parties have gone to emphasise the width of the clause: twice within the same passage in brackets they have used the expression "without limitation" to make the point. … [23]. … It is not clear to me … why the nature of the clause calls for a narrow construction in order to limit its scope. Such an approach would be appropriate only if there were grounds for seeking by means of construction to reduce the scope of the clause beyond that which the parties had agreed. As I have already said, however, the court's task is not to re-shape the contract but to ascertain the parties' intention, giving the words they have used their ordinary and natural meaning.”
“For the avoidance of doubt, this agreement is restricted to the Customer’s claim for the physical loss or damage to the Stock and nothing herein is intended to prevent the Customer from recovering damages for consequential or business interruption losses whether resulting from the Riot, the Loss or otherwise.”
“Subject to clause 10.5, the aggregate liability of the Logistics Services Provider for all breaches of or in relation to its obligations under this Agreement or for any losses or liabilities which are the subject of any indemnity by the Logistics Service Provider, whether in contract, tort, for breach of statutory duty or otherwise, shall not in any event exceed the sum of£5,000,000 (five million pounds). ”
“The Customer shall accept payment of the Agreed Valuation … in full and final settlement, discharge and release of all and any liability Sony or Insurers (including their employees, servants and agents) may have in respect of the Loss whether under the Distribution Agreement, the Insurance or howsoever such liability may arise (and whenever arising).”
“… the logistics problems occurred from the date of the fire through till Christmas. The manufacturing problems occurred from the date of the fire until approximately the end of October… The vast majority of stock … was available from manufacturing by the end of October. The issues then became distribution issues. …”
“A. By the end of October, the stock problems were mostly resolved, to a large extent, and the problems then continued to be distribution. But they were problems on both stock and distribution in the period between the fire and the end of October… Q. You say: “Please note we are now at a point where we are not tracking lines as we are in virtual normal supply situation regarding incoming stock.”
“Q. … we know that the majority of the summer stock rebuild had actually come into the warehouse prior to the fire, don’t we? A. Yes. Q. So if you’re asking what was in the warehouse at the time of the fire and what was the position in midOctober, when you say, as Mr Ogilvie does and Mr Hobby says, that it’s back up to the same level, that considers the summer rebuild, doesn’t it? A. But there would still be normal production in September – the rest of August, September and October that would not – that would effectively have just gone to replace the summer build rather than being the additional stock that they needed. Q. The whole point about the summer rebuild is you’re freeing up capacity in September and October, November, to do the new releases. A. Yes. Q. So the stock in the warehouse at the time of the fire is likely to reflect what they were anticipating to have, say, at mid-October. A. It’s an opportunity when things are relatively quiet to build up the stock. It doesn’t necessarily give you all you will need for later. It seems a very sensible approach to adopt you know, to a seasonal business. Q. You accepted that they are prioritising the summer rebuild, their top lines, yes? A. That would make sense and I think they did do that. Q. They do that, and so you’ve accepted that upon the restock post-fire they’re going to be focusing on the same lines. A. Yes. Q. So when Mr Ogilvie tells us that by the time of midOctober, end of October, they’re back to where they would have been, that takes into account the fact that they were already prioritising the top lines and then prioritising again the rebuild. So there’s not going to be any material difference between what could have been on the notional October date without the fire, and what actually was in there post-fire? A. If we’re talking about the lines that they prioritised for a place, then I would probably agree with you… ”