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

A right to contribution under section 1(1) of the Civil Liability (Contribution) Act 1978 arises only where two or more persons are liable to compensate the claimant for the same harm. Their legal bases of liability may differ, but a broad similarity between the resulting financial losses is insufficient.

The court must identify the damage for which each person is liable and determine whether it corresponds, wholly or partly. Separate wrongs producing a common financial result do not establish the necessary common liability. The statutory expression “the same damage” bears its natural and ordinary meaning and should receive neither an expansive nor a restrictive gloss.

The employer engaged a contractor to construct hospital premises and retained architects to administer the building contract. The contractor completed the works late. The architects granted extensions of time and instructed the use of a damp-proof membrane, thereby affecting the employer’s rights to liquidated damages and its liability for loss and expense.

The employer settled arbitration proceedings with the contractor and pursued negligence claims against the architects. The architects sought a contribution from the contractor under section 1(1) of the Civil Liability (Contribution) Act 1978.

Judge Hicks QC struck out the contribution proceedings: [1999] BLR 385. The Court of Appeal dismissed the architects’ appeal: [2000] Lloyd's Rep PN 643. The issue before the House was whether the contractor and the architects were arguably liable to the employer in respect of “the same damage”.

1. The appeal was dismissed unanimously. Lord Bingham and Lord Steyn delivered the principal speeches. Lord Mackay, Lord Hope and Lord Rodger agreed that the contribution claim had been rightly struck out.

2. Per Lord Bingham, contribution rests upon a common liability to the person who suffered the damage. The Civil Liability (Contribution) Act 1978 widened the legal bases on which contribution may arise, but retained the requirement that one loss be apportioned among persons liable for it. A contribution claim therefore requires the court to ask what damage the claimant suffered, whether the person seeking contribution is liable for that damage, and whether the proposed contributor is liable for that damage or part of it.

3. Per Lord Steyn, section 6(1) permits contribution whatever the legal basis of liability, while section 2 gives the court broad powers to apportion a qualifying common liability. Those provisions do not justify expanding “the same damage” to include substantially or materially similar damage. The statutory words bear their natural and ordinary meaning. Correct legal analysis of the respective claims is therefore essential.

4. The mutual-discharge questions suggested in Howkins & Harrison v Tyler provide a useful practical method of examining whether liabilities concern the same damage. They should not be treated as a separate or invariably necessary threshold test. The controlling inquiry remains the statutory one.

5. The contractor’s alleged wrong was delayed completion. The resulting harm comprised the consequences of that delay. The architects’ alleged negligence caused different harm by prejudicing the employer’s contractual position through extensions of time, certification and advice. The Hydrotite instruction similarly transferred costs and altered the employer’s contractual position. The architects were not alleged to have caused or contributed to the construction delay. The liabilities were therefore independent rather than common.

6. Per Lord Hope, a common result does not itself establish the same damage. Separate wrongs may each cause their own harm even where their consequences are difficult to disentangle. The prerequisite for contribution was absent because the contractor and architects did not contribute to a single harm.

7. Lord Steyn disapproved the suggestion in Friends' Provident Life Office v Hillier Parker May & Rowden that a restitutionary claim necessarily constitutes compensation for damage under the Act. He also held that Hurstwood Developments Ltd v Motor & General & Andersley & Co Insurance Services Ltd had adopted an unjustifiably extensive construction and was wrongly decided.

1. House of Lords: The architects’ appeal was dismissed unanimously. The contribution proceedings remained struck out: [2002] UKHL 14.

2. Court of Appeal: The appeal was dismissed because the contractor’s liability for delay and the architects’ liability for impairing the employer’s contractual rights did not concern the same damage: [2000] Lloyd's Rep PN 643.

3. Technology and Construction Court: Judge Hicks QC struck out the architects’ third-party contribution notice because the contractor and architects were not liable in respect of the same damage: [1999] BLR 385.