Howmet Ltd v Economy Devices Ltd & Ors

A manufacturer’s duty in negligence does not necessarily continue after an end-user discovers that a safety device is defective. The effect of that discovery depends on the circumstances, including whether it was reasonable to remove or avoid the danger and whether subsequent conduct caused the loss. The majority held that the claimant knew the device was malfunctioning, stopped relying on it, and assumed the risk by relying on inadequate alternative precautions. The claims therefore failed for lack of causation, or because no continuing duty remained. The same causation principles applied to the statutory-duty claim. Arden LJ considered that non-reliance was not an absolute bar and that contributory negligence under the Law Reform (Contributory Negligence) Act 1945 might instead apply, but agreed that the appeal should be dismissed.

Howmet operated a factory grain etch line fitted with thermolevel devices manufactured by Economy Devices Ltd. A thermolevel was intended to switch off a tank heater when the liquid level fell. After earlier fires, Howmet discovered or ought to have known that the device on tank 6 was malfunctioning. It adopted operator vigilance and a procedure of leaving the tank empty with the heater off at weekends, and ordered a float switch, which was not installed before the fatal fire.

The Technology and Construction Court dismissed Howmet’s negligence and statutory-duty claims: [2014] EWHC 3933 (TCC). Howmet appealed on attribution of employee knowledge, reliance, causation, and breach of statutory duty. The central questions were whether EDL owed a continuing duty after Howmet’s discovery of the defect, whether EDL’s breaches caused the fire, and whether Howmet was affected by the regulatory breaches at the time of the loss.

1. Appeal dismissed. The first three grounds failed. The fourth ground, challenging the trial judge’s treatment of causation under the Popi M approach, did not require determination.

2. For the purpose of the company’s knowledge, the relevant employees were those entrusted with maintaining and operating the grain etch line safely. Their collective knowledge that the thermolevel was malfunctioning was attributable to Howmet. This included the facilities manager, engineering personnel, and operators who knew of the malfunction and established the alternative system of operator vigilance and weekend shutdown.

3. Under the principles derived from Donoghue v Stevenson, Taylor v Rover, D & F Estates and Murphy v Brentwood, once an end-user is alerted to the dangerous condition of a chattel, continued use will normally be at the end-user’s own risk. The majority treated Howmet’s knowledge and conduct as defeating the negligence claim: by the time of the fire Howmet was not relying on the thermolevel, and the effective cause was the failure of the substitute system it had adopted. The result could be expressed as the absence of a continuing duty or as a failure of causation.

4. Akenhead LJ separately regarded the case as falling within the Popi M principle. The trial judge was entitled to conclude that none of the competing unlikely causes had been proved on the balance of probabilities. Jackson LJ left that issue open.

5. Arden LJ agreed with the dismissal but disagreed that non-reliance was an absolute bar. In her provisional view, the court should ask whether the claimant’s response to the discovered danger was reasonable and whether it was unreasonable to continue running the risk. She considered that contributory negligence under the Law Reform (Contributory Negligence) Act 1945 could apply, and that the trial judge had approached causation too narrowly. Nevertheless, Howmet’s operator-vigilance system was plainly inadequate and the claim would fail on that basis.

6. The statutory-duty claim also failed. The thermolevel was unsafe and lacked CE marking, contrary to regulations 5(1) and 9(1) of the Electrical Equipment (Safety) Regulations 1994, engaging the duty under section 41 of the Consumer Protection Act 1987. But the same causation principles applied, and after the earlier incident Howmet was relying on alternative precautions rather than the thermolevel. It was therefore not a person affected by the contravention when the later fire occurred.

• Court of Appeal (Civil Division): The appeal from the Technology and Construction Court was dismissed. Jackson LJ gave the principal judgment; Akenhead LJ agreed, subject to his separate view on the Popi M issue; Arden LJ agreed with the result but differed on the effect of non-reliance, contributory negligence, and causation.
• Technology and Construction Court: Mr Justice Edwards-Stuart dismissed Howmet’s claim against EDL: [2014] EWHC 3933 (TCC).