John Innes Foundation Earlham Institute & Ors v Vertiv Infrastructure Ltd

On an application for strike out or summary judgment, a pleaded duty of care claim may be rejected where the facts cannot establish sufficient proximity, an assumption of responsibility or a fair, just and reasonable basis for imposing a duty.

Physical damage ordinarily supports the existence of a duty following a negligent act, but the Caparo Industries plc v Dickman threefold approach remains relevant, particularly in novel cases. The distinction between positive acts and omissions is material. A contractual structure deliberately allocating maintenance responsibilities and interposing another contracting party may be inconsistent with any assumption of responsibility to non-contracting parties. Pure economic loss requires additional justification.

The claimants sought damages for loss arising from a fire allegedly caused by thermal runaway in batteries forming part of an emergency lighting uninterruptible power supply.

The defendant had contracted with NBI Partnership Ltd to provide maintenance services, including two annual visits. No visits took place in the two years before the fire. The claimants, who owned or occupied the property, pleaded that the defendant owed them a tortious duty to carry out the maintenance, give reminders and identify the need to replace the batteries.

The defendant applied under CPR 3.4(2)(a) and CPR 24.2, arguing that the claim disclosed no reasonable grounds and had no real prospect of success. The central issue was whether the pleaded facts could establish a duty of care owed by the defendant to any claimant.

1. Application granted. The claimants had no arguable case that the defendant owed a duty of care to any of them. Summary judgment was therefore entered for the defendant.
2. The appropriate starting point was the threefold test in Caparo Industries plc v Dickman: foreseeability, proximity, and whether imposing a duty would be fair, just and reasonable. Where a negligent act causes physical damage, a duty will normally be recognised, but that is a rule of thumb and does not displace the Caparo analysis. Novel situations should be approached incrementally by analogy with decided cases.
3. The claim principally concerned an omission: failure to attend the contractual maintenance visits or remind NBI that they were due. The law is more cautious about omissions and asks whether there was a duty to act. An assumption of responsibility is particularly important in such a case.
4. The contractual arrangements pointed against proximity and assumption of responsibility. The claimants had structured their relationships through leases, the NBI Membership Agreement and an arm’s-length maintenance contract with NBI. The arrangements allocated maintenance and insurance responsibilities and deliberately distanced the claimants from direct contractual dealings with the defendant. Imposing a tortious duty could place a claimant in a better position than under the contractual arrangements.
5. There was no pleaded reliance by any claimant on the defendant in particular. General foreseeability that the equipment required testing was insufficient. The statutory fire-safety responsibilities of the claimants did not negate a duty and, if anything, supported the purpose of the maintenance arrangements; nevertheless, they did not establish the necessary proximity or assumption of responsibility.
6. Even if a duty concerning physical damage were arguable, a duty to avoid pure economic loss, including business interruption and increased working costs, was difficult to establish on the pleaded facts. The alleged breach difficulties also reinforced the absence of a tortious duty to act.