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Are you liable for your subcontractor’s negligence?

The ‘Honeywill rule’ caused concern for the industry, but a recent case has proved it was exceptional

If a subcontractor’s negligence causes damage for which you as a contractor are not liable under your main contract then you’re not responsible, right?  Generally speaking, yes.

However, since the 1934 case of Honeywill-v-Larkin there’s been a troubling exception to this rule which could leave you on the hook for a subcontractor’s negligence if the subcontractor was carrying out “extra-hazardous or dangerous operations”. This “Honeywill rule” rightly caused concern for the construction industry in which potentially dangerous works are a fact of life, albeit that in the hands of experienced professionals they can be carried out safely.

Thankfully the recent case of Biffa v Maschinenfabrik Ernst Hese (MEH) revisited the Honeywill rule, making clear that it only applies in extremely limited circumstances.

The case

In 2003 Leicester City Council appointed Biffa to build a recycling plant, including a mill to break down waste for processing. Biffa subcontracted parts of the works to MEH which sub-subcontracted them to others.

The mill failed to achieve the required output so modifications were made by MEH’s subcontractors involving welding and grinding inside the mill. Flammable material left inside the mill was ignited by a spark, causing fire and substantial damage.

With the mill out of action, Biffa lost business, a loss for which MEH was not contractually responsible. Biffa made a negligence claim against MEH’s subcontractor but before the claim reached court, MEH’s subcontractor went bust. Biffa then looked to claim against MEH under the Honeywill rule.

With a catalogue of failures including inadequate method statements, missed inspections and failing to wet down the affected area, the negligence of MEH’s subcontractor was not disputed.  The question was whether MEH should carry the can for those failings.

The decision

The judges in Biffa agreed that the Honeywill rule was “so unsatisfactory that its application should be kept as narrow as possible” (a sentiment most contractors would agree with) and so limited its scope as follows:

  • To decide whether an activity is “ultra-hazardous”, you must consider it in isolation – not in combination with other external factors.  In Biffa, the relevant activity was not “welding in the vicinity of unwetted combustible material”, but “simply welding”.  “Simply welding” is not ultra-hazardous.
  • The rule should only apply to activities which are “exceptionally dangerous whatever precautions are taken”.  If a skilled operator taking reasonable precautions can make the activity less than “exceptionally dangerous”, the rule will not apply.

On that basis, MEH was not liable for its subcontractor’s negligence.

Contractors should still responsibly manage subcontract works with a proportionate degree of caution but 70 years on from Honeywill, common sense should finally prevail when establishing who is responsible if events do take a turn for the worse.

By Alan Woolston, construction solicitor at Field Fisher Waterhouse.

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