Royal Brompton Hospital National Health Service Trust v Hammond and Others and Taylor Woodrow Construction (Holdings) Limited

The House of Lords construed section 1(1) of the Civil Liability (Contribution) Act 1978 together with section 6(1). The statutory phrase "liable in respect of the same damage" was held to require a true common liability to the same harm or loss: contribution is available only where two or more persons are liable for the same damage (even if their bases of liability differ). The court rejected arguments for an expansive gloss that would treat substantially similar or consequential losses as "the same damage". Applying that test to the facts, the architect and the contractor were held not to be liable in respect of the same damage: the contractor's liability was for late completion (delay) while the architect's alleged liability was for a change in the employer's contractual position by negligent certification; the claims were separate and independent and therefore the architect's Part 20 contribution claim was not arguable.

This was an appeal concerned with the correct interpretation and application of section 1(1) of the Civil Liability (Contribution) Act 1978 in a tripartite construction context. The dispute arose out of a JCT building contract under which Taylor Woodrow (the contractor) delayed completion; the architect granted extensions of time and issued an instruction (Hydrotite) which shifted certain costs. The contractor pursued arbitration against the employer; the parties settled that arbitration and the employer later pursued negligence proceedings against the architect. The architect issued third party (Part 20) proceedings seeking contribution from the contractor under the 1978 Act. The contractor applied to strike out those third party claims as not falling within the Act.

The principal issues before the House were:

• the meaning of "liable in respect of the same damage" in section 1(1) read with section 6(1) of the 1978 Act, and
• whether, on the pleaded facts (Hydrotite instruction and extensions of time), the contractor would be liable to the employer "in respect of the same damage" as the architect.

The House proceeded from the historical and statutory context: the Act extended contribution to a wider range of legal bases of liability but did not abolish the underlying requirement of a common liability to the same damage. The court affirmed that "damage" denotes harm and stressed that the natural and ordinary meaning of "the same damage" is controlling. Practical tests (for example whether payment by one would pro tanto reduce the other's liability) were discussed as useful aids but not substitutes for the statutory test. The court considered relevant authorities (including Friends' Provident, Howkins & Harrison, and the Canadian case Wallace v Litwiniuk) and concluded that claims against the contractor for delay and against the architect for negligent certification or advice produced different damage. Accordingly the striking-out orders below were upheld and the appeal dismissed.

Appeal dismissed. The House held that section 1(1) of the Civil Liability (Contribution) Act 1978 requires liability "in respect of the same damage" — meaning a true common liability to the same harm — and on the facts the contractor and the architect were not liable in respect of the same damage (contractor liable for delay; architect liable for change in contractual position by certification), so the architect's claim for contribution was not arguable.

At first instance Judge Hicks QC in the Technology and Construction Court struck out the architect's Part 20 claim: Royal Brompton Hospital National Health Trust v Hammond [1999] BLR 385. The Court of Appeal dismissed the architect's appeal: Royal Brompton Hospital National Health Service Trust v Hammond [2000] Lloyd's Rep PN 643. The House of Lords dismissed the subsequent appeal ([2002] UKHL 14). Prior to the High Court proceedings the contractor had commenced arbitration and the arbitration was settled on 19 December 1995, the settlement including an indemnity by the employer in favour of the contractor.