Contribution – meaning of ‘same damage’

Royal Brompton Hospital NHS Trust v Hammond and others (Taylor Woodrow Construction (Holdings) Ltd, Part 20 Defendant (H of L) [2002] 2 All ER 801)

Under a contract for the construction of new hospital premises, the contractor had to pay or allow the employer liquidated and ascertained damages at a specified weekly rate if the contractor failed to complete the works by the completion date. Practical completion was certified over 43 weeks later than the contractual completion date, but the architects under the contract granted the contractor extensions of time which had the effect of relieving the contractor of its obligation to pay damages. The employer brought proceedings against the architects alleging they had been negligent in granting the extensions of time, thereby depriving the employer of its entitlement to liquidated damages from the contractor. The architects issued Part 20 proceedings against the contractor to recover a contribution on the grounds that the contractor was liable ‘in respect of the same damage’ within the meaning of s1(1) of the Civil Liability (Contribution) Act 1978. In upholding the striking out of the Part 20 claim the House of Lords held that on the true construction of s1(1) of the Act, the words ‘the same damage’ did not mean ‘substantially or materially similar damage’. The context did not justify an expansive interpretation of the words ‘the same damage’. When a claim for contribution fell to be decided the questions which arose for consideration were (i) what damage had A suffered, (ii) was B liable in respect of that damage and (iii) was C also liable to A in respect of that damage or some of it? At the striking-out stage, the questions had to be recast to reflect the rule that it was arguability and not liability that fell for decision, but their essential thrust was the same. In phrasing those questions, it did not matter greatly whether one spoke of ‘damage’ or ‘loss’ or ‘harm’, provided that it was borne in mind that ‘damage’ did not mean ‘damages’ and that B’s right to contribution by C depended on the damage, loss or harm for which B was liable to A corresponding (even if in part only) with the damage, loss or harm for which C was liable to A. In the instant case, the employer’s claim against the contractor was for late delivery of the building, while the essence of the case against the architects was that their breach of duty had changed detrimentally the employer’s contractual position against the contractor. Accordingly, neither head of claim satisfied the statutory criterion.