BICC LTD v CUMBRIAN INDUSTRIAL LTD & OTHERS [2001] EWCA Civ 1621

Two persons are liable for the “same damage” under the Civil Liability (Contribution) Act 1978 where their separate breaches contribute to the same harmful consequence and resulting expenditure. The damage may be expressed as the physical harm or as the commensurate cost of dealing with it.

A reasonable settlement of all claims may found a contribution claim by reference to the whole settlement sum, including an element attributable to the injured party’s costs. When fixing a just and equitable contribution, the court may consider causal potency, culpability and the parties’ organisational responsibility. The exercise does not require precise mathematical calculation, and an appellate court should interfere only in an exceptional case.

BICC Ltd engaged Parkman Consulting Engineers to design and supervise works intended to contain contaminated material at an industrial site. Cumbrian Industrials Ltd constructed the containment. Water continued to enter the site through defects in the cap, perimeter bund and underlying clay, generating substantial quantities of contaminated leachate.

BICC sued Parkman and Cumbrian. Parkman settled all BICC’s claims for £1,950,000 and pursued contribution proceedings against Cumbrian and others. His Honour Judge Anthony Thornton QC found Cumbrian responsible for defective construction of the cap and bund. He ordered Cumbrian to contribute £975,000, representing 50% of Parkman’s settlement payment.

Cumbrian appealed from the Technology and Construction Court. It challenged the factual findings, the conclusion that both parties were liable for the “same damage”, the apportionment of responsibility, and the inclusion of the part of the settlement attributed to BICC’s costs.

1. Appeal dismissed. Lord Justice Henry delivered the judgment of the court, prepared by Sir Anthony Evans. The trial judge was entitled to find that defects in Cumbrian’s construction of the membrane and bund caused substantial water ingress. His reasons for preferring particular expert and physical evidence were sufficiently clear when the judgment was read as a whole.

2. Parkman and Cumbrian were liable for the “same damage” within section 1(1) of the Civil Liability (Contribution) Act 1978. The ineffective containment caused continuing water ingress and corresponding treatment and disposal costs. Design defects and construction defects were separate causes of that common consequence. The damage could therefore be described either as the water ingress or as the commensurate cost of treating and disposing of the additional leachate.

3. Hypothetical claims for a replacement landfill, comprehensive repairs or a different design did not alter the analysis. BICC had not made those claims. Its viable claim against both parties concerned the cost of managing the additional leachate, including an enhanced treatment plant.

4. The judge’s 50% apportionment under section 2(1) was just and equitable. Responsibility was not confined to mathematical causal potency. The judge could also consider culpability and each party’s position in the decision-making and organisational structure. His preliminary calculation attributing 46% of the ingress to Cumbrian was therefore consistent with an ultimate contribution of 50%. The assessment was neither exceptional nor manifestly wrong.

5. The whole £1,950,000 settlement could found the contribution award. It settled all BICC’s claims arising from the defective containment. The court’s present view was also that the 1978 Act permits contribution towards a reasonable payment attributable to the injured party’s costs. In any event, the undivided settlement entitled the judge to consider the whole sum.

6. Section 51(3) of the Supreme Court Act 1981 also gave the court power in contribution proceedings to make an order concerning a sum paid for the former claimant’s costs. That power did not depend upon the former claimant remaining active in the proceedings.

Cumbrian was ordered to pay the appeal costs on an indemnity basis after 10 July and £75,000 on account. Permission to appeal to the House of Lords was refused.

• Court of Appeal (Civil Division): The court dismissed Cumbrian’s appeal and upheld the contribution award of £975,000.
• Technology and Construction Court: His Honour Judge Anthony Thornton QC held Cumbrian responsible for construction defects affecting the cap and bund. Under the Civil Liability (Contribution) Act 1978, he ordered Cumbrian to contribute 50% of the £1,950,000 paid by Parkman to settle BICC’s claims.