| Date | 26 November 1997 |
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| Judgment | Scandia Property (UK) Ltd -v- Thames Water Utilities Ltd, 30 July 1997. 1997 CILL1293 |
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| The Issue | Causation in the context of claims for damages. |
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| Implication |
Obtaining independent professional advice may go towards establishing reasonableness in the context of mitigation of loss, but proving an unbroken chain of causation must be distinctly proved by the plaintiff. |
printThe case of Scandia Property (UK Ltd) -v- Thames Water Utilities gives an opportunity to consider the question of causation in damages claims. A fracture occurred in one of Thames Water's underground mains in Pall Mall causing a flood in the basement of property belonging to Scandia. Subsequently, Scandia undertook a programme of waterproofing of the basement and sub-basement at the cost of some £213,000, and claimed this sum from Thames Water. Although there was no dispute about the liability of Thames Water pursuant to the 1981 Water Act, the parties were in dispute as to whether Scandia was entitled to recover the cost of the waterproofing work. The facts behind the matter revealed that Scandia had had considerable difficulties with damp penetration in their basement prior to the problems with the burst water main. Accordingly, when the matter came before the court they saw that they would have to deal with the central question of causation. In other words, was the requirement to spend £213,000 on water proofing caused by the burst water main? Counsel for Scandia therefore devised an argument in an attempt to get around this. He argued that the principle question was not one of causation, but that the acid test in the present circumstances must be reasonableness. On this basis he followed that Scandia had acted reasonably in seeking and relying upon independent expert advice before embarking on their programme of waterproofing. Accordingly, it was for Thames Water to prove that the advice given was unreasonable. The judge however, was prepared to firmly stand his ground. He accepted that reasonableness might well be an important principle. The central issue however, was that it was for the plaintiff, in this case Scandia, to prove causation. That is, Scandia must prove the connection between the burst water main and the requirement to undertake extensive waterproofing works. Thus if a plaintiff acts on a decision which he says is reasonable, it is for him to prove its reasonableness. Taking independent advice in a situation such as this was simply another factor in the sequence of events. Whether that advice was sound or otherwise would not necessarily answer whether the breach of duty by Thames Water was merely the occasion for the loss, or whether it was in fact the effective or direct cause of the loss. In understanding the requirement to prove causation, it was important not to confuse this with the general duty to mitigate. Mitigation involved the duty upon Scandia to act reasonably in all the circumstances, to mitigate, or reduce the loss. In analysing whether Scandia had acted reasonably in the context of mitigation it would indeed be relevant that Scandia had taken independent professional advice. In general, a plaintiff would be entitled to recover the costs so incurred where independent professional advice was reasonably followed. This however, was a second stage in the analysis of the issues between the parties. First and foremost it was necessary to establish the connection between the burst water main and the waterproofing work. According to the judge, the evidence contained in correspondence between Scandia and other parties prior to the flood demonstrated that the flood was not without its silver lining for Scandia. The flood, he said, had occurred opportunely for them and offered a tidy solution to a difficult problem. He concluded on the basis of the evidence that what led to the comprehensive waterproofing of the basement was not the flood, but the pre-existing defective state of the building which perhaps had been highlighted by the flood. The building was not water tight and the flood provided the occasion that brought that fact to light. He clarified that "a plaintiff is completely free to act as he judges to be in his best interests. On the other hand a defendant it not liable for all loss suffered by the plaintiff as a consequence of his so acting. A defendant is only liable for such part of the plaintiff's loss as is properly caused by the defendant's breach of duty". Clearly it was in Scandia's best commercial interest to have a water tight building and neither they nor their advisors could be said to have acted unreasonably in their endeavours to secure that end. However, this did not go to proving causation, and taking into account all the facts of the case it was held that Scandia was not entitled to recover the cost of the water proofing. What caused Scandia to act in the way it did, reasonable though it was, was not the defendant's wrong doing or any injury caused by it. It was a sensible desire to have a water tight building.
CJ-9742
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