Tilbury v. IOPCF CofA
DMC Category Rating: Confirmed
The "SEA EMPRESS" grounded off Milford Haven in February 1996 and there was an escape of crude oil into the sea. The Government imposed a fishing ban off the Welsh coast including an area where whelks were caught which were supplied to Tilbury in Devon who in turn processed the whelks for Korean buyers. The ban brought an immediate end to the catching of whelks and thus destroyed Tilbury’s business with its Korean buyers.
Section 153 of the MSA 1995 sets out the extent of the liability of the shipowner, s.157 limits it (in the absence of actual fault and privity) and s.175 makes the Fund liable to compensate where the damage exceeds the shipowner’s liability under s.153 as limited by s. 157. These proceedings were brought against the Fund.
In the Tilbury case, the Court of Appeal held that Tilbury’s loss was a form of secondary economic loss which fell outside the intended scope of the statute which was closely focussed on physical contamination and its consequences. Tilbury was not engaged in any local activity in the physical area of the contamination. Its interest was in landed whelks, not in the whelks in their natural habitat. The contamination prevented local fishermen, whose physical activities were closely affected by the contamination of the waters and of whelks, from supplying Tilbury with the landed whelks for which it had contracted. Tilbury’s resulting loss arose from its inability to carry out processing the whelks at points far away from the contaminated areas.
In reaching its conclusion, the Court accepted that it was legitimate to bear in mind the general policy of the common law to limit the recoverability of claims for pure economic loss, but the common law rules could not be absolutely decisive. Thus, although it was not necessary to decide it, Mance LJ was prepared to assume that there could be claims under the statute for loss suffered by the fishermen, which would not be recoverable at common law, even assuming negligence. In making that assumption, he emphasized the very close relationship between the contaminated waters and the fishermen’s activities and loss.
In a concurring judgment, Chadwick LJ placed importance upon the fact that the liability of the Fund was subject to financial limits in accordance with the Fund Convention of 1971. This led him to believe that the test of causation to be applied was restrictive, in the sense that it should operate so as to enable those whose loss was more proximate to recover in full by excluding from participation in the common fund those whose loss was less proximate.
The appeal was accordingly dismissed.
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