The claimant brought a claim for damages as widow and executrix of the estate of her husband who was fatally injured in an accident. She had sued Drake International Ltd (her husband’s employer’s) and Southampton Container Terminals (who conducted operations at the site that the fatality occurred).
The trial judge found that both Drake and Southampton were negligent and were in breach of statutory duty. He apportioned blame equally between them. The judge also found that by virtue of a contract between them, Drake should indemnify Southampton in respect of Southampton’s liability to the claimant.
The trial judges decision as between Drake and Southampton were challenged.
The issue was whether the indemnity clause in question applied in instances where the person who had the benefit of the indemnity had caused losses by his negligence.
Reference
The court held that there is a presumption that an indemnity will not be readily granted to a party against the loss caused by its own negligence. The court further held that the words “however caused” did cover both negligence and breach of statutory duty. However another express provision of the contract denied the reliance on the provision and so the indemnity did not operate in this instance.
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Postscript
The decision reiterates the basic principle that clauses purporting to exclude or limit liability with regards to a persons own negligence should be clear and concise so as to leave no doubt that they include negligence or otherwise such clauses will not be held to apply to negligence.
In this case it was interesting that, although the indemnity clause in question was held to be wide enough to cover negligence, because of a conflicting provision the indemnity clause did not apply in this instance. This illustrates the importance of checking the relationship between the different clauses of a contract to ensure that no such conflicts exist and where they do to ensure that they are addressed.
