Caledonia North Sea Limited etc, (2002)
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Caledonia North Sea Limited etc, (2002)
HOUSE OF LORDSLord Bingham of Cornhill Lord Mackay of Clashfern Lord Nicholls of Birkenhead Lord Hoffmann Lord Scott of Foscote OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENTIN THE CAUSECALEDONIA NORTH SEA LIMITED (RESPONDENTS) v BRITISH TELECOMMUNICATIONS PLC (APPELLANTS) ( SCOTLAND)CALEDONIA NORTH SEA LIMITED (RESPONDENTS) v KELVIN INTERNATIONAL SERVICES LIMITED (FORMERLY KELVIN CATERING LIMITED) (APPELLANTS) (SCOTLAND)CALEDONIA NORTH SEA LIMITED (RESPONDENTS) v LONDON BRITISH ENGINEERING LIMITED (APPELLANTS) (SCOTLAND)CALEDONIA NORTH SEA LIMITED (RESPONDENTS) v NORTON (NO 2) LIMITED (IN LIQUIDATION) (APPELLANTS) (SCOTLAND)CALEDONIA NORTH SEA LIMITED (RESPONDENTS) v PICKUP NO 7 LIMITED (FORMERLY NORTHERN INDUSTRIAL & MARINE SERVICES COMPANY LIMITED) (APPELLANTS) (SCOTLAND)CALEDONIA NORTH SEA LIMITED (RESPONDENTS) v STENA OFFSHORE LIMITED (APPELLANTS) (SCOTLAND)CALEDONIA NORTH SEA LIMITED (RESPONDENTS) v WOOD GROUP ENGINEERING CONTRACTORS LIMITED (APELLENTS) (SCOTLAND)(CONSOLIDATED APPEALS)ON 7 FEBRUARY 2002[2002] UKHL 4LORD BINGHAM OF CORNHILLMy Lords,1. The explosive conflagration which destroyed the Piper Alpha oil platform on 6 July 1988 cost the lives of many men and injured many others. The claims made by and on behalf of the victims were fully settled years ago. These proceedings are the contractual aftermath of those settlements, brought to decide who, as between the operator of the platform and the contractor who employed each individual victim, must bear the financial cost of the settlements. As my noble and learned friend Lord Mackay of Clashfern has explained in his summary of the facts, history and issues relevant to these appeals, which I gratefully adopt and need not attempt to repeat or elaborate, only one of seven test cases originally selected for decision is now live before the House.2. Operations to exploit the oil and natural gas resources of the North Sea have two prominent features relevant for present purposes. First, such operations are potentially hazardous. It is generally true, as the Lord Ordinary in his judgment said of Piper Alpha, that"it is plain beyond doubt that an Oil Platform is a dangerous place unless careful and proper safety precautions are taken. The platform holds contained under pressure large quantities of gas and liquid hydrocarbon material which is explosive, very flammable and most dangerous if control of it is lost. [The president and managing director of the operator] described the operations as being 'potentially hazardous'. This was well recognised before the accident."The second feature worthy of note is the involvement of many contractors and sub-contractors. This is exemplified by the present case. As Lord Mackay has noted, the Piper Alpha disaster led to claims against 24 different contractors. Of those on board the platform who were killed, 134 were employed by contractors and 31 by the operator. Of those who survived, 55 were employed by contractors and 6 by the operator.3. These features are not unique to North Sea oil exploitation. They are also to be found, to a greater or lesser extent, in the nuclear power industry. But the regulatory regime governing the two industries has been very different.4. The Nuclear Installations (Licensing and Insurance) Act 1959 made provision for the licensing of nuclear installations, required licensees (but not the Atomic Energy Authority or government departments) to provide cover to meet claims by insurance or otherwise (sections 5 and 9), imposed a strict liability on licensees to secure that no ionising radiations were emitted (section 4(1)) and stipulated that "no person other than the licensee shall be under any liability in respect of any hurt to any person or any damage to any property caused by any ionising radiations to which subsection (1) of this section applies" (section 4(2)). The purpose of this provision and of the governmental exception was explicitly stated by the minister when introducing the bill in the House of Lords (HL Deb, 13 November 1958, cols 504-505, 509):"The object of these provisions is to facilitate the settlement of claims, first by ensuring that all claims are channelled to the licensee, thus avoiding a multiplicity of claims between, for example, injured persons and contractors or one contractor and another; and, secondly, by requiring the claimant to prove only that the cause of the injury or damage was radio-activity from the licensee's reactor. The claimant is thus spared the difficult, if not impossible, task of proving that the licensee was negligent in allowing the radio-activity to be given off . . . Unlike licensees, the Authority and Government Departments will be liable even where the injury or dam...See the full content of this document
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