Shipbreaking, applicable law, and the duty of care

In this blog post John-Paul Swoboda and his pupil, Cressida Mawdesley-Thomas, consider the recent judgment of Jay J in Begum (on behalf of Mollah) v Maran (UK) Ltd [2020] EWHC 1846 (QB).

This judgment is well worth reading for at least two reasons. First, it highlights the dangerous practice of shipbreaking on tidal beaches such as Chittagong in Bangladesh. Second, whilst only considered briefly at the end of the judgment at [83], Jay J left open the possibility that English Law was applicable if the case came within the ambit of Article 7 of Rome II, which deals with environmental damage.

This case is one to watch: if his purposive (and extremely broad) interpretation to Article 7 is accepted at trial, then this could have wide-reaching implications for the law that governs international torts.

Background

The matter before Jay J was whether the Defendant’s application for summary judgment should be granted. It was refused. It was held that the Claimant, the widow of a worker who fell from an oil tanker (“the vessel”) to his death in a ship-breaking yard in Chittagong (“the yard”) had a real prospect of success against the Defendant.

The Defendant is a UK-registered company which was “responsible for the vessel ending up in Bangladesh where working conditions were known to be highly dangerous”. Proceedings were issued claiming damages for negligence under the Law Reform (Miscellaneous Provisions) Act 1934 and the Fatal Accidents Act 1976; alternatively, under Bangladeshi law.

This blog considers the judgment’s analysis at to whether:

  • English law applies to the claim; and
  • the Defendant owed the deceased a duty of care.

The judgment did also briefly deal with the issue of unjust enrichment, but this was dismissed. It was also noted that if the claim was governed by Bangladeshi law, then it would be statute-barred.

Does English Law Apply?

This was considered at [76]-[85] of the judgment in the context of limitation. Under Article 4 of Rome II, the general rule is that the applicable law “shall be the law of the country in which the damage occurs”. Jay J gave short-shrift to consideration of the “escape-clause” under 4.3. He held at [79]:

“… I have to say that there is no real prospect of the claimant meeting this stringent criterion [of the manifest closer connection test]. The accident occurred in Bangladesh; the claimant and her son live in Bangladesh as do all the witnesses; and there is no pre-existing relationship between the parties based on any contract or anything else. The defendant’s activities in this jurisdiction create a modicum of a connection, but in my judgment not one of sufficient nature and extent.”

However, that was not the end of the argument on applicable law.

Article 7 Rome II: Environmental Damage

It was the Claimant’s case that Article 7 of Rome II applied. It reads as follows:

Environmental damage

The law applicable to a non-contractual obligation arising out of environmental damage or damage sustained by persons or property as a result of such damage shall be the law determined pursuant to Article 4(1), unless the person seeking compensation for damage chooses to base his or her claim on the law of the country in which the event giving rise to the damage occurred.”

Recital 25 says as follows:

“(25) Regarding environmental damage, Article 174 of the Treaty, which provides that there should be a high level of protection based on the precautionary principle and the principle that preventive action should be taken, the principle of priority for corrective action at source and the principle that the polluter pays, fully justifies the use of the principle of discriminating in favour of the person sustaining the damage. The question of when the person seeking compensation can make the choice of the law applicable should be determined in accordance with the law of the Member State in which the court is seised.”

Jay J held at [88]:

“The proximate cause of the accident was the deceased’s fall from a height, but on a broader, purposive approach the accident resulted from a chain of events which led to the vessel being grounded at Chattogram (now Chittagong), in consequence of which damage was no doubt caused at very least to the beach and tidal waters. Assuming (as I have found) that the claimant has a sustainable argument that the defendant committed a relevant tort, it is far from obvious that the present case is not caught by the spirit of Article 7. Moreover, the event giving rise to the damage was for these purposes the tortious event which occurred in this jurisdiction.” (Emphasis added.)

Jay J made clear that the submissions he received on this point were brief.

The language of Article 7 “damage sustained by persons or property as a result of such [environmental] damage” would certainly, on a plain reading, be wide enough to cover injury suffered, for example, due to water contamination. In this case there must be an argument that the deceased’s death (falling from the vessel) arose out of the presence of the vessel which was causing environmental damage. The deceased’s death was, arguably, more proximately caused by his employer’s lack of reasonable care for his safety. In such circumstances is there a real connection between the environmental damage and his death? Jay J considered there to be at least a real prospect of proving such a nexus but whether such a nexus does in fact exist remains an open question. That being said, the 25th Recital of Rome II makes clear “the polluter pays”.

Did the Defendant owe a Duty of Care to Deceased?

The Claimant’s case was premised on both negligent acts and omissions by the Defendant. The acts included negotiating the end of life sale for demolition of the Vessel “with particulars of sale such that the Defendant knew or ought to have known that the Vessel could only have been destined for demolition on the beaches of Bangladesh where working methods are known to be environmentally unsound and unsafe for workers;”. Omissions included failing to take account of the risk to workers such as the Deceased in the dismantlement of the Vessel using the beaching method”.

Jay J considered at length the issue of duty of care where the actual harm is caused by a third party. In this case, claims were not brought against either the Bangladeshi shipyard or the deceased’s employer (the third parties). It was held, to paraphrase, that this case did not fit comfortably within elementary Donoghue v Stevenson principles, primarily because in that case there was no third party intervention, unlike in the present.

The argument that the Defendant had a sufficient degree of control was rejected. It was held “… I simply cannot accept that the defendant had any control over what happened in Bangladesh. To say that there was a seamless contractual concatenation linking the defendant to the yard, and thereby to the deceased, is to say no more than the defendant foresaw the risk.” And the Defendant foreseeing the risk was held on authority not to be sufficient.

Having heard submissions on the issues of omissions, third parties and creation of dangerous situations, it was held:

“The correct approach must be to seek to ascertain whether, recognising the general rule that liability cannot attach in the absence of a relationship of proximity between the parties, it can fairly and properly be said that the defendant created a danger to which the deceased was exposed, thereby creating the requisite legal nexus. The application of this approach will need to reflect that (a) this is not a pure omissions case and (b) the intervening causal contribution of the yard/employer was not deliberate […] I consider that it is also relevant that the deceased’s accident was a likely consequence of the defendant’s postulated breach of duty (as per Lord Reid in the Dorset Yacht case): this element, taken in combination with factors (a) and (b) above, serves substantially to weaken Lord Goff’s principled concern about the wrongdoing of third parties breaking the chain of causation.”

Jay J held that the issue of duty “is drawn back to the issue of whether the defendant could be said to have created the relevant danger rather than merely to provide the opportunity for the yard/employer to expose the deceased to the risk.”

In perhaps a telling turn or phrase Jay J commented “whether considerations of fairness, justice and reasonableness, the safeguarding of the environment and exploited workers in the developing world, and commercial practice, should operate in a case such as this to guide the court in placing it either within or without the creation of danger principle, in so doing possibly slightly stretching the boundaries of established norms.” However, it was held the Claimant had a real prospect of establishing the existence of such a duty.

Concluding Thought

The Claimant in this case made it over the summary judgment hurdle, but that hurdle is not particularly high. This is a case which seeks to break new legal ground in its argument as to why English law should apply, relying on Article 7 of Rome II. The argument over whether a duty applies under English law, appears, at least on Jay J’s analysis, to be intimately connected with whether the Defendant created a source of danger. In that sense it is not so much the legal principles which appears novel but rather the factual matrix. In any event for the Claimant to be successful in this case probably requires the Courts of England to show a significant degree of flexibility, both in relation to whether English law applies and whether the Defendant owed the Claimant a duty of care.

Finally, it is worth noting just how broad Jay J’s interpretation of Article 7 was, notwithstanding the low bar for resisting applications for summary judgment. It expressly involved looking past the “proximate cause” of the deceased’s death to the more distant chain of events that resulted in the tanker ending up in the shipbreaking yard in the first place. That finding was also of crucial importance to the case: if Bangladeshi law applied – as it probably otherwise would – then Jay J held that the claim would be limitation-barred. It remains to be seen whether the Defendant intends to appeal on this point.

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