ALL RISKS POLICY EFFECTIVE TO EXCLUDE LIABILITY IN NEGLIGENCE

Co-operative Retail Services Ltd v Taylor Young Partnership Ltd (Carillion Construction Ltd, Part 20 defendants) [2002] UKHL 17; [2002] 1 WLR 1419

The House of Lords in Co-operative Retail Services Ltd v Taylor Young Partnership Ltd (Carillion Construction Ltd, Part 20 defendants) [2002] UKHL 17; [2002] 1 WLR 1419 held that the effect of an all risks policy was to exempt the contractor and the sub-contractor from liability in respect of damage to premises by a fire caused by the alleged negligence of the contractor and the sub-contractor. This being the case, the defendant architects and engineers were held to be unable to claim a contribution from the contractor or the sub-contractor. The reason for this was that neither the contractor nor the sub-contractor were liable to the employer in respect of the fire damage and so could not be called upon to make a contribution to the architects or the engineers. The result was that the architects and engineers were left with potential liability for the entire loss and unable to claim a contribution from other parties whose negligence may have contributed to the damage. The result may strike some as unfair but it is a product of the contract structure adopted by the parties. But, in the view of Lord Bingham, the architects and engineers, or their insurers, could have taken steps to ensure that they were included as co-insured in the joint names insurance or taken other steps to protect their position.