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Subcontractor Supershield hit with £2.7m bill after law firm flood

Fire protection subcontractor Supershield has been found liable for the flooded basement of an international law firm’s London office eight years ago after a tangled legal battle involving seven parties.

Supershield will have to fork out more than £2.7 million to engineering giant Siemens, the High Court has finally ruled, after a wrangle including construction group Skanska and M&E contractor Haden Young.

The court found that the small Kent-based firm was responsible for the installation of a faulty sprinkler system which flooded the basement of Slaughter and May’s new office back in October 2001.

Judge Justice Ramsey heard that a nut and bolt connection on a float valve failed following its installation, and water from a storage tank subsequently overflowed into the basement of the building, leading to the extensive damage of electrical equipment.

The incident turned into a wide-reaching piece of litigation, with Slaughter and May, building owner Deka Immobilien Investment, and lessee Trucidator all taking action against building contractor Skanska.

Skanska in turn dragged Haden Young - which had been appointed to install the sprinkler system as part of the M&E works - into the ruck.

Haden Young consequently brought action against Siemens Building Technologies, which it has appointed to do the work, and Siemens likewise sued Supershield - which had the final sub-contract to fit the system.

Siemens settled with all parties up the contractual chain last June, but pursued litigation to recover the monies from its former subcontractor. Siemens was hit with claims of more than £5.6 million, and finalised settlement payments totalling £2.72 million.

It paid Deka - which had claimed a total of £2.92 million plus costs of £500,000 - a settlement of £1.4 million and Slaughter and May - which has claimed £1.13 million plus £290,000 in costs - a final sum of £720,000.

It also had to pay Skanska £463,000 - to cover more than three quarters of its £600,000 legal bill - and Hayden Young £136,552 - about 80 per cent of its costs, which totalled £170,000.

But faced with paying the multi-million pound sum back to Siemens, Supershield argued the settlements had been “unreasonable”.

Mr Justice Ramsey ruled, however, that Supershield was liable for “breach of contract and under the indemnity for the failure of the nut and bolt connection which caused the overflow and the flood” and told Siemens it would recover all of its losses from the settlement payments.

He ruled: “Under the subcontract, Supershield had an obligation both to install the ball float valve and lever arm and to carry out any adjustments to it which were necessary to ensure that it was operating correctly.”

Mr Justice Ramsey asked counsel to advise him on payment terms and whether any extra costs or interest would be owed.

The Flood

The water storage tank for the sprinkler system was located in the basement of the premises. It stored water which, in the event of the operation of sprinkler system in the building, would be pumped through the pipework serving the sprinklers.

The tank was divided into two parts and the mains water supply was connected to each part of the tank. When the level of the water in one part of the tank dropped, a float valve would operate to refill the water tank.

This float valve was an industrial version of the ball valve typically found in domestic water supply tanks. The float device is connected to a lever arm which operates the valve lever which turns the water on and off.

The lever arm was attached at one end to the float and at the other end to the valve lever. The connection to the float was by two nuts and bolts some centimetres apart. It was one of these connections which failed in the following circumstances, causing water to overflow.

At about 5pm on 9 October 2001 a sprinkler pump was activated, the precise cause for this being uncertain. When a sprinkler pump operates it causes water to be drawn from and returned to the tank. In doing so, the float causes the valve to operate.

In this case when one of two float valves operated in this way a nut and bolt connection failed and the bolt fell out. This meant that the valve was in the open position letting water into the tank. Without any fixed connection to the float at the end of the lever arm, the valve did not shut down when the tank reached the required level but continued to fill up.

The water from the tank overflowed into a bunded area which contained a 600 mm high wall designed to retain any overflowing water. There were drains in the tank room floor within the bunded area but these became blocked or partially blocked by packaging, insulating or other material on the tank room floor.

Water then overflowed the bund, passed over the door threshold to outside the tank room. The water reached electrical equipment in the basement which then suffered substantial damage. The Building Management System was in the process of being installed and received a number of signals indicating conditions arising from the incident. Those would have been displayed as a signal on the panel and might have given an audible warning. However, at that time the BMS was not being monitored 24 hours a day.

Source: Seimens Building Technologies v Supershield judgement

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