High Court loss

Davies Arnold Cooper (DAC) partner Nick Young will be licking his wounds this week after a being on the receiving end of a major High Court loss that could cost his client more than £1bn.

Davies Arnold Cooper (DAC) partner Nick Young will be licking his wounds this week after a being on the receiving end of a major High Court loss that could cost his client more than £1bn.

The Buncefield case (20 March), while wildly complex, pitted some of the UK’s top lawyers against each other, with Brick Court Chambers’ Jonathan Sumption QC (who was instructed by Herbert Smith partner Ted Greeno) going head to head with One Essex Court’s Lord Grabiner QC.

In the end it was Grabiner, who was representing Total, who lost out when Mr Justice David Steel found the oil giant vicariously liable for all damages spinning out of the 2005 oil depot explosion. Buncefield was run jointly by Total and Sumption’s client Chevron, which would have been liable for 40 per cent of damages if Sumption had not been able to convince Steel J that Total was solely to blame.

The original liability claim was brought against Total and the Total/Chevron-owned company Hertfordshire Oil Storage Ltd (HOSL) by members of the Buncefield Neighbouring Property Insurance Group (Bunpig).

Bunpig was represented by Kennedys partner Nick Thomas who had instructed Jonathan Gaisman QC of Kings Bench Walk to lead the case. Just days into the preliminary hearing of the original case Total conceded liability and admitted that the blast was a result of negligence by the supervisor on duty at the time.

This was a resounding victory for Kennedys, which had spent more than two years trying to get Total to pay out for the damage caused to the buildings beyond the depot’s perimeter.
In round two of the saga, Grabiner argued that Chevron should be held jointly liable for the losses, which totaled £750m, as it jointly owned HOSL.

In court, Grabiner rejected arguments that Total was in control of the site. This baffled the opposition, which had got hold of transcripts of Health & Safety Executive (HSE) interviews carried out in the aftermath of the explosion that showed Total to be in control.

Total’s legal team had promised a string of witnesses who would uphold its argument. In the end just one witness was produced – HOSL director Mike Linley. He was singled out for criticism from Steel J, who in his judgment said Linley was “evasive and unwilling” to face up to the fact that his testimony differed somewhat from his statement. That said, Steel J did concede that the passage of time may have eroded Linley’s memory.

Regardless, all Buncefield employment contracts were with Total; the most senior person on site, who reported into Total’s head office, had been appointed by Total; and the health and safety policy of the site had been dictated by Total.

When it is considered that HOSL had no employees at the site and its board met for two hours twice a year it seems clear which company was in control of the site.

The court therefore ruled that liabilities arising from the explosion were the fault of Total alone and that the company should be responsible for all costs as well as the losses other businesses in the area suffered as a result of the explosion.

Total will also be liable for the legal bills built up by the stellar list of counsel instructed for the claimants, including Sumption.

The saga, it seems is not over yet, though. In a statement Total said: “We still believe our joint venture partner should accept their share of the responsibilities for the incident.”

The fight continues.