Finesse Group Ltd v Bryson Products (A Firm)

A negligence claim for economic loss caused by defective goods generally requires physical damage or injury to something other than the defective item itself, unless a sufficiently close relationship or assumption of responsibility exists. Delamination caused by ineffective adhesive, without pleaded damage to the panels, stand or other property, does not satisfy that requirement. The fact that remedial expenditure has been incurred does not convert defective quality into physical damage. Nor does res ipsa loquitur establish negligence or causation where several realistic explanations remain open. In case management, a claim may properly remain in the High Court as a test case where related proceedings raise comparable issues, although proportionality and the practical effect on other claims must be addressed.

Finesse manufactured exhibition stands using adhesive purchased from Bryson Products. It alleged that the adhesive was defective and that the panels delaminated, causing rectification costs, other losses and damage to goodwill. Finesse sought to re-amend its Particulars of Claim to plead contractual claims against Bryson and negligence claims against Bostik, said to be the manufacturer supplying adhesive through an intermediary.

Bostik applied for summary judgment and opposed the proposed amendment. The court also considered whether the proceedings should remain in the High Court rather than be transferred to a TCC judge in the Central London County Court, given numerous related claims concerning allegedly defective adhesive. The central issues were whether the proposed tort claim disclosed a realistic cause of action and whether the proceedings should be treated as a test case.

1. Application against Bostik. The application to re-amend the Particulars of Claim against Bostik was refused, and the claim against Bostik was dismissed. The proposed pleading had no realistic prospect of success.
2. In the ordinary case, a negligence claim for economic loss relating to defective goods requires physical damage or injury other than damage to the defective thing itself. The principle illustrated by Donoghue v Stevenson [1932] AC 562 did not permit recovery of the cost of the defective article itself. The approach in Murphy v Brentwood 1991 1 AC 398 similarly excluded recovery of ordinary economic loss, subject to the possibility of liability where a defective component damages other parts of a structure or article.
3. The pleading alleged that the adhesive was ineffective and that panels delaminated. It did not allege that the panels or stands were physically damaged, or that anything else was injured or damaged. Remedial expenditure and the consequences of delamination did not amount to damage for the purposes of negligence. The adhesive was also arguably part of the same structure as the panels. The court noted the wider floodgates concern that a manufacturer of glue or another component should not ordinarily face claims for the cost of replacing a product which merely fails in use.
4. Res ipsa loquitur could not supply the missing case. Delamination shortly after application did not itself prove negligence or causation, since possible explanations included poor application, deterioration while under AFT’s control, AFT’s processes or inadequate instructions. The position might differ in a claim against Bryson, but the pleaded inference did not work against Bostik.
5. Transfer and case management. Applying the guidance in West Country Renovations Ltd v McDowell [2012] EWHC 307 (TCC), the proceedings properly fell within the category of a test case because comparable claims were being pursued. They therefore remained in the High Court. The court ordered information-sharing about related claims, fixed a trial for November 2014 and warned that the parties’ costs budgets appeared substantially disproportionate to the value of the claim.