Barclays Bank Plc v Fairclough Building Ltd

Contributory negligence is not a defence to damages for breach of a strict contractual obligation. This includes a term requiring an achieved standard of performance or compliance with statutory regulations, rather than merely reasonable care. A party who engages a reputable and experienced skilled contractor is generally entitled to rely on the contractor’s performance. The contract’s allocation of supervision is important. Apportionment may be available where contractual liability is co-extensive with independent tortious liability, subject to the contract. A claimant should also be found contributorily negligent only on a properly pleaded case.

The Bank engaged Fairclough Building Ltd under a standard building contract to clean asbestos cement roofs at occupied warehouses. The contractor’s sub-contractor used high-pressure water jets without appropriate precautions, causing extensive asbestos contamination and remedial costs. The official referee found the contractor in breach, but reduced the Bank’s damages by 40 per cent for contributory negligence, on the basis that the Bank should have supervised the work and prevented the breach. The Bank appealed. The central issues were whether contributory negligence could reduce damages for breach of the contractual obligations and whether the Bank had been at fault in failing to supervise the contractor’s method of work.

Disposition. The Court of Appeal unanimously allowed the appeal. The reduction in damages was removed and the Bank recovered 100 per cent of its assessed damages.

1. Contractual breach. The contractor breached the requirement that workmanship should be of the best of its kind and the contractual obligation to comply with the Control of Asbestos at Work Regulations 1987. These were strict obligations requiring the specified standard to be achieved or the regulations to be complied with. The breach was not merely a failure to exercise reasonable care and skill.
2. Contributory negligence. Contributory negligence involves breach of an obligation imposed by law. The conduct must involve failure to guard against a reasonably foreseeable risk and must be unreasonable in all the circumstances. Where the alleged fault is an omission to guard against another person’s failure to perform legal obligations, experience must show that the failure was likely. The nature and terms of the contract materially affect whether, and to what extent, such an obligation exists.
3. Application of the 1945 Act. Under the three-category analysis discussed in Forsikringsaktieselskapet Vesta v Butcher [1986] 2 AER 488 and the Court of Appeal decision in the same litigation [1988] 3 WLR 565, the present case fell within category (i): strict contractual liability. In the present state of the law, contributory negligence was not a defence to such a claim. The wording of section 4 of the Law Reform (Contributory Negligence) Act 1945 could not reasonably produce a contrary result. Simon Brown LJ additionally reasoned that strict liability was inconsistent with apportionment and that the contract should be construed as excluding the Act.
4. Reliance on the contractor. The Bank was generally entitled to rely on the skilled contractor’s performance. The contract assigned appropriate supervision on site to the contractor, not the Bank’s architect. Imposing on the Bank an obligation to prevent the contractor’s breach would contradict the agreed allocation of responsibility.
5. Pleading. The alleged failure to investigate and prevent the chosen method of work departed materially from the pleaded case. The contractor had not amended its defence, and the judge should not have relied on that unpleaded ground. This provided an additional basis for allowing the appeal.

The order was varied by substituting 100 per cent for 60 per cent in the trial order. The Bank received its costs in both courts. Leave to appeal to the House of Lords was refused.

1. Court of Appeal: Allowed the Bank’s appeal, removed the 40 per cent reduction, substituted 100 per cent for 60 per cent in the damages order, and awarded costs.
2. High Court, Queen’s Bench Division, Official Referee: On 13 May 1993, gave judgment for the Bank with damages to be assessed, but reduced the damages by 40 per cent for contributory negligence.