England and Wales High Court (Technology and Construction Court) Decisions

1. Introduction

1.1 In these third party proceedings the defendant firm of architects, Broadway Malyan (BM), claims that the third party, Ernest Green Partnership Limited (EGP), a company formed in 1985 to continue the consulting engineering practice of Ernest Green & Partners, is liable to make a contribution towards the damages which it, BM, has had to pay to the plaintiff (Sainsbury) as a result of the compromise of an action commenced on 13 February 1995. BM agreed to pay Sainsbury £7,125,000 (inclusive of costs) on the basis that it was in breach of contract and negligent in the performance of its services as architect in designing or supervising the construction of a fire compartment wall at Sainsbury's superstore in Chichester. On 16 December 1993 a fire which had been deliberately started in the service area of the store spread to the sales area through the compartment wall. Sainsbury's case was that the fire would not otherwise have done so because the fire brigade could have contained the fire to the service area. Sainsbury accordingly claimed a total of £10,741,578 plus interest for the cost of reinstatement of the store, as well as loss of profit from being unable to trade and other consequential loss (as set out in amended appendix 2 to Sainsbury's statement of claim).

1.2 In these proceedings BM now accept there is no doubt that it was negligent in designing the compartment wall as the top part of the compartment wall had only about a half hour fire resistance instead of two hours. In its negotiations with Sainsbury BM pursued its case that there had been contributory negligence on behalf of Sainsbury; that there was a lack of causation - BM alleged that the sales area would have burned down in any event; and that Sainsbury had overstated the quantum of its claim (BM alleged that Sainsbury would have rebuilt the store from scratch anyway, even if the sales area had been saved) and criticisms were made of other elements of Sainsbury's claim. According to BM immediately prior to the trial date the total of Sainsbury's claim including interest and costs came to about £14.5m (Sainsbury's costs being then estimated at over £1m). On 25 September 1997 the negotiations resulted in the settlement.

1.3 The third party proceedings were not started until early 1997. BM alleges that EGP (a) was "involved in" the re-design of the fire wall and (b) "in particular ... was specifically consulted about the same at or about the end of October 1984 and approved the dry construction detail of the wall as shown on [BM's] drawing 3133/A3/6". (It is not however alleged that EGP was responsible for carrying out the design.) BM's case is that EGP has an equal responsibility for the design because it failed to observe or draw attention to an obvious defect within its own sphere of competence, i.e. unprotected steelwork. BM contends that if EGP had fulfilled its duty towards Sainsbury the compartment wall would have been re-designed with protection on either side of the main lattice girder between the service area from the sales area and thus the wall would have had two hour fire resistance. (The sales area was 70m x 35m.) It was not denied by EGP that it owed a duty to Sainsbury to exercise reasonable skill and care in acting as Sainsbury's structural engineer in and about the design and construction of the superstore (see paragraph 2 of its re-amended defence). It is however important to bear in mind that BM claim that EGP owed a duty to Sainsbury in respect of the fire resistance of structural elements, namely that, because the fire compartmentation materials (the FlameBraker system including Supalux board) at the top of the wall were attached to the steel lattice girder, a structural element, they were vulnerable to movement of that structure. In essence EGP denied that it would have been liable to Sainsbury, and that, even it were liable, the damage for which it might be liable to contribute was not that claimed by BM and in any event its proportion of responsibility was minimal.

1.4 I heard evidence from some of those who were involved at the time: Mr Nicholas Hutton, who had been the BM partner operationally responsible for the project, Mr Noel Spargo, the job architect, and Mr William Donaldson, who was the principal structural engineer at EGP. Each side has tendered a number of experts: EGP called Mr Colin Hotchkiss, a chartered architect, and Mr Roy K Farrant, a chartered engineer, both of RMJM London Ltd. Mr Hotchkiss was an Associate Director and Mr Farrant was Managing Director. BM called Mr Frank Cleveland, a chartered architect, Mr Eric Skilton, a director of John Pryke & Partners, a chartered civil and consulting engineer, Mr Robert Jervis, a chartered quantity surveyor with NBA Quantum, Mr Ian Hobbs, a partner of Littlejohn Frazer, chartered accountants, Mr Matthew Bullen, a consulting forensic engineer who dealt with the fire and fire-protection, and Mr Eric H Whitaker QFSM, a former Chief Fire Officer of the East Sussex Fire Brigade who dealt with fire-fighting issues.

1.5 In addition reference was made to witness statements and reports that had been exchanged for the trial of Sainsbury's action, and in particular to the experts reports of Mr Cliff Buckton, a civil engineer and principal engineer with Sir William Halcrow & Partners Ltd, Mr Roger Jowett, a chartered architect of Bickerdike Allen Partners, Mr Graham Karran QFSM, who, like Mr Whitaker, is a former Chief Fire Officer, and Professor J.P. Percy, a partner of Grant Thornton, chartered accountants. In certain respects the views expressed by some of the experts retained by Sainsbury were especially helpful as they were neutral on questions that arose only between BM and EGP. Reports of the West Sussex Fire Brigade on the incident and from Sheppard Robson, architects, were also put in.

1.6 Mr Skilton, Mr Buckton and Mr Farrant met on 2 July 1997 and reached agreement on a number of matters. It is convenient now to set out parts of their agreement:

1.7 BM's claim is made under section 1(1) of the Civil Liability (Contribution) Act 1978 ("CLCA") which provides as follows:

1.8 A number of points were argued in relation to this section which I shall consider later. One related to the meaning of "liable in respect of the same damage" in section 1. The first question that I have to decide is whether EGP was in breach of its duties to Sainsbury, ie for the purposes of section 1 of CLCA: would EGP have liable to Sainsbury for any damage? For this purpose I shall assume that Sainsbury suffered some damage, since as Mr Irvin for BM rightly submitted, liability in negligence cannot exist without some damage identified as having been caused by the breach of duty: Pirelli General Cable Works Limited v. Oscar Faber & Partners [1983] 2 AC 1 at page 16. He said that concurrent liability continues to exist and a plaintiff can choose to sue in contract and in tort (see per O'Connor L.J. in Forskingsaktieselskapet Vesta v. Butcher [1988] 1 Lloyd's Rep. 21 at page 27:

23. "I start by pointing out that Vesta pleaded its claim against the brokers in contract and tort. This is but a recognition of what I regard as a clearly established principle that where under the general law a person owes a duty to another to exercise reasonable care and skill in some activity, a breach of that duty gives rise to a claim in tort notwithstanding the fact that the activity is the subject matter of a contract between them. In such a case the breach of duty will also be a breach of contract. The classic example of this situation is the relationship between doctor and patient."

2. History

2.1 Sainsbury's architects and engineers department was originally responsible for the design of its new store at Chichester. Mr John Huxtable, a section architect, was the team leader. Chichester was Sainsbury's 262nd store and the sixteenth that was being built in 1984. In March 1984 Sainsbury's architects evidently found that they had too much work so they appointed BM to complete the architectural work for Chichester. This was only the second occasion on which Mr Hutton had worked for Sainsbury (the previous store had been at Pinner, Middlesex). BM did not expect that there would be any major changes as Sainsbury had finished work stages C and D (and in consequence BM's fees were reduced by 35%). Mr Hutton substantially agreed with the account given by Mr Spargo in his witness statement of the manner in which Sainsbury exercised tight control over BM, which Mr Spargo said was understandable as it was Mr Huxtable's original concept. Consequently, every drawing which BM produced had to be submitted to Mr Huxtable for comment (and in practice drawings tended to be issued to the whole of the design team at the same time). Mr Spargo said that Mr Huxtable looked at every drawing and would often call the day after he had received a drawing to make comments or changes. Mr Hutton said that he had very good grasp of detail. BM did not disagree with Mr Huxtable as he did not suggest changes but instead dictated what he wished to see changed. Mr Huxtable was evidently, as Mr Hutton said, a strong character and more zealous than average. I think that he must have been a difficult person to work for. Mr Spargo said that his moods were unpredictable and he did not tolerate any sign of what he perceived as incompetence or inefficiency. However Mr Spargo admired him for his knowledge of the job and his decisiveness.

2.2 Sainsbury also had manuals which contained guidelines for construction of its stores (the "Orange Books"). It was not possible to depart from these unless a problem arose which meant a departure had to be approved by Mr Huxtable. The manuals provided for the layout of the store, finishes and standard details. Mr Hutton said that the manuals were particularly difficult to work with because they were often out of date and updated only by Policy Memoranda which supplemented the manuals. He had to rely on the Clerk of Works, Mr Glaysher, for their interpretation. Telephone calls to Mr Huxtable were often of little assistance. Mr Hutton said that if he "needed information which was not apparent and telephoned Mr Huxtable his response was sometimes that the answer I was looking for was "in the manuals" or "in the Policy Memos", or "your company has the expertise" meaning that other architects from Broadway Malyan had perhaps designed this element of a J Sainsbury store before."

2.3 The site had presented difficulties since it was an old gravel pit which had been filled with rubbish, capped with only six inches of soil. The decomposing rubbish generated methane. As a result of the poor ground the store had to have piled foundations and even the services were carried on piles and from other parts of the sub-structure. The danger of fire and explosion from the ignition of the methane led to special measures being taken to prevent it building up and to disperse it. Unusually therefore special attention was given to the risk of fire and its consequences. EGP had apparently been retained by Sainsbury as early as 1977 to investigate and to advise it about the site and by the time that BM were appointed EGP had prepared the scheme design. EGP had done many projects for Sainsbury so it was able to produce a design to Sainsbury's standard requirements fairly quickly. Mr Skilton said that it was "one of the most well respected firms in the profession."

2.4 There was a dearth of information about the terms of EGP's engagement, and I shall assume that EGP's services included the normal range expected of a consulting structural engineer on a building project where an architect has been appointed by the client (or where, as here, the client acted as its own architect - until BM took over - and as its own mechanical and electrical engineer), ie as set out in the Association of Consulting Engineers Conditions of Engagement, 1981 edition, as amended in 1983, Schedule 3. Thus EGP was to develop its design in collaboration with the architect and to consult with the local authority and to submit calculations and details sufficient to obtain Building Regulation approval for the structure. Mr Skilton considered that such an engineer was responsible for seeing that the structure met appropriate standards for fire resistance, amongst other things, but I think that such duties are subsumed in the general obligations. It must not be forgotten that Sainsbury had issued its own extensive manuals which BM had to follow. They included the following:

2.5 A meeting was held on 5 March 1984 to introduce BM to the existing members of the team (F/6). Amongst other things it records that BM were to make the application for Building Regulation approvals but that Sainsbury did not want a sprinkler installation. In due course BM made arrangements to present that application at a meeting with the District Council on 25 June (F/38).

2.6 The wall between the bulk stock and sales areas had been placed by Sainsbury along grid line K as set out on its drawings 3133/100 and 102 which it gave to BM to follow. Sainsbury showed the wall going up to the underside of the roof decking but this was not in fact possible (except where the wall deviated to accommodate the bakery) as the roof trusses intervened. Similarly Sainsbury had shown the wall to have a two hour fire resistance on its drawing 3133/111. It was originally designed to be 215mm blockwork but in August 1984 EGP decided that it should be changed to 190mm blockwork so as reduce loadings on the suspended floor. Sainsbury approved that change on 29 August 1984 F/51-52). BM then sent to EGP drawings 3133/217 and 218 "showing the step in the roof and 190mm block wall on grid line K reducing to 100mm at the girder. We await your comments" (F/53). On 12 September Mr Donaldson replied saying that he would contact BM "to resolve this item" (F/54). Mr Spargo said that it became apparent that this proposal was not achievable without difficulty so the 100mm blockwork on top of the central 190mm blockwall was changed to dry construction, as the 100mm blockwork had to be connected to the lattice girder in order to stabilise it. It would have been difficult to do this with blockwork and the penetration of the wall with services would weaken its overall stability. It is unclear how this advice was given to and accepted by BM, or who had suggested dry construction, since neither Mr Donaldson nor Mr Spargo could recall the conversation. It may have been proposed by the main contractor for by October construction of the building had reached floor level.

2.7 BM then set out the details of the dry construction wall on its drawing 3133/A3/6 and sent it to EGP by a letter of 30 October 1984 (F/74-78):

2.8 The drawing was produced by Mr Wright on the directions of Mr Spargo who told him to change the blockwork. It described the Supalux as being "2hr. fire resisting 6mm Supalux board". Mr Spargo in evidence accepted that it was a bad detail as it did not provide 2 hour fire resistance to the lattice girder unlike the wall, and that this was not something that he thought that he needed to be told. Apart from being sent the drawing EGP were not consulted about its contents. It is common ground that BM's design made the girder at grid line K part of the fire compartment wall and under the Building Regulations it became a structural member which needed fire protection.

2.9 EGP made no comment on the drawing and did not advise BM of the need for fire protection. (BM did not pursue a pleaded case that the drawing had been positively approved.) Mr Donaldson in his witness statement said that when he received this letter he considered it in terms of the structural implications of the changes that had been made as he saw it as a continuation of the discussion about stability of structure and not as a request to consider the design of the fire protection. He explained that he did not investigate the fire proofing aspects of the wall as BM was designing the fire protection, which he considered was its responsibility and outside his work, and in cross-examination he said that he had noted that the sketch said that two hour protection was provided. He accepted in cross-examination that he had no experience of compartment walls or dry construction of the type shown on the drawing. He was only aware of the provisions of the Building Regulations relating to fire protection in so far as they applied to concrete or steel, and not in depth. He did accept that if an architect were to send him a drawing showing steelwork which required fire protection but which did not provide it then it would be foolish not to comment on it. His concern in relation to the detail had been its stability as the wall as previously detailed had not been stable. "I certainly would not have looked at the detail from the point of view of fire proofing. I merely saw that there was no longer any high level blockwork and therefore no further stability problems." With hindsight his evidence was that EGP's comment would have been that there was no problem from a structural point of view. Mr Donaldson could not remember if it was the practice of EGP to write to say that it had no comment. He said that it was normal practice to receive details from architects and other consultants "for comment" before and during the course of a project. He said that if it had been important then he would have expected BM to have chased him: "If I send a drawing to an architect (or other party) showing structural matters and do really want their comments prior to proceeding, then I would pursue them for comment or a response as appropriate." However if EGP's comment would have been limited to having no observations from a structural point of view BM's failure to pursue EGP for an answer would not have resulted in EGP warning BM about the inadequacies of its design for fire protection.

2.10 On 14 February 1985 (F/90) Mr Spargo sent Mr Huxtable "our sketch drawing A3/6 showing the fire barrier fixed to the girder on grid K where the shop/bulk store wall stops at the underside of the girder." It was apparently annotated by Mr Huxtable to be copied to others. It was also seen by Sainsbury's own fire officer. The wall was built generally in accordance with the design shown on the drawing and drawing 3133/217 (which Mr Spargo annotated to refer to the sketch A3/6).

2.11 The store opened in late 1985 and for eight years there was, according to Sainsbury, "no serious comparable competition" until September 1993 when Tesco opened a store on the other side of Chichester. (Tesco had earlier built an out of town store at Bognor Regis, some distance away but this, and the Waitrose store in Chichester, were not considered by Sainsbury to be real competitors.) In 1987 and 1991 the store was extended. In 1991 Sainsbury wished to create an area for the sale of wet fish out of part of the stores area and to do so it was necessary to demolish part of the compartment wall. Mr Spargo and Mr Hutton were both involved in this redesign. For the purposes of the main action witness statements had been obtained from Mr Wort, the visiting Clerks of Works, and from Mr Hartnup, Sainsbury's district engineering manager who had visited the store. They stated that high level scaffolding had been erected directly adjacent to and in line with the compartment wall and that Mr Spargo had inspected the works both on the scaffolding (which had erected on the stores side of the wall) and from ladders and thus could not have failed to see how Supalux had been used on one side only with the girder exposed on the stores side. When these statements were put to him Mr Spargo accepted that he would then have been confronted with the original design "face to face". In addition there was correspondence with Rockwool Ltd and another of BM's architects, Mr Clive Cannings, which showed that in 1991 Mr Cannings understood that the proper detail for the new work was to fix 60mm Cape Supalux to both sides of the wall with an infill of Rockwool insulation. Understandably Mr Spargo said that he treated the existing structure as having two hour fire resistance even though the basis for that assumption was erroneous, and therefore it would not have occurred to him in 1991 that the original detail was wrong. I digress to observe that if the deficiency should have been obvious to BM it ought to have been equally obvious to Sainsbury's architects and engineers. However a witness statement from Mr John Mitchell, Sainsbury's Project Manager, whilst confirming that Mr Spargo would have seen the problem ("From the bird cage scaffold, you couldn't really miss this. It could be clearly seen that a single skin of Supalux had been fixed to the sales side of the spine girder"). Interestingly he also said:

2.12 (Mr Mitchell was however an electrician by trade and not qualified in fire protection.) Mr Hutton said that he would have seen it being built.

2.13 It will be necessary to consider later what took place on 16 December 1993 but at this stage I shall set out only the account given by Sainsbury in the pleadings in the main action as it is basically uncontroverted and because it is relevant to some of the issues that arise under the CLCA. In paragraph 8 of the statement of claim Sainsbury said:

2.14 Again for convenience I set out the contents of that Appendix with the deletion of parts overtaken by amendments but without the parts affected by amendments:-

3.1 Mr Hutton said that if EGP had commented on the drawing and said that the steelwork was not adequately protected "the whole of the design of the compartment wall would have been reviewed and the defects in it seen and dealt with." Mr Spargo made similar comments in his supplemental statement. BM's case was that if EGP had replied with proper advice as set out in paragraphs 11 and 12 of the amended third party statement of claim then BM would have redesigned the wall so that it was built as set out in paragraph 12 of the Amended Statement of Claim. EGP however contended that on this basis the redesign would still have had the same fixings and would have lacked insulation between the sheets of Supalux, both of which were amongst the obvious flaws in BM's design. Mr Irvin in reply submitted that if a proper compartment wall with a two hour fire rating had been constructed, the fixings on the sales area side of the wall would not have been affected by direct contact with the fire until 2 hours after the fire reached the compartment wall and any deficiencies in these fixings was not therefore of causative relevance. Moreover since Mr Hutton's evidence was that "the whole" of the design would have been reviewed and since this evidence was not challenged in cross-examination, I should find that these deficiencies would not have gone uncorrected.

3.2 In his report of May 1997 (for the main action) Mr Skilton in addition to being critical of the fire stopping in the compartment wall (both originally and as a result of later works) said in paragraph 10.56 that the weakest aspect of the FlameBraker system was "the special thin gauge metal spring clips and fixing straps supplied by Cape" and in cross-examination he agreed that they would obviously fail before a massive girder. In addition in paragraph 12.50 he thought that provided that the Supalux was fixed rigidly and effectively to the girder it was probable that girder and the fire protection would have remained unscathed. (Furthermore he noted that there was evidence of smoke in the sales area by 1459 which suggested to him that the initial smoke and later fire penetrated through or over the compartment wall by other routes than the deficiencies in the grid.)

3.3 The evidence that in 1991 BM redesigned the Supalux with two sheets and with insulation shows that it is probable that a redesign in 1984 would have been the same. I accept Mr Skilton's evidence that the fixings and straps were certainly vulnerable and would have failed long before the girder but a proper redesign should have ensured that they were protected and should not have failed within the nominal two hour period. Since Mr Skilton was aware of their properties he could not have reached the conclusion that his Scenario 3 (paragraph 12.46 ff) would have been satisfactory. A specification substantially the same as Scenario 3 would have been a proper design. In my judgment if BM's attention had been drawn to its mistake it would have corrected it satisfactorily.

4. Apportionment

4.1 BM's case was that EGP's share was 50%. Apportionment only arises if EGP were liable to Sainsbury so it is unnecessary to rehearse that case in full as at this stage EGP is assumed to have been negligent. BM's responsibilities did not excuse negligence by other consultants nor would it relieve EGP of a substantial share of blame as BM was entitled to rely on EGP when specifically consulted on matters within their own sphere and it was entitled to expect competent advice from EGP as structural engineers on matters within EGP's own sphere of expertise. Mr Irvin also pointed out that Mr Hutton said that BM was dealing with thousands of drawings and that therefore the drawings of a compartment wall were particularly important and that BM's failure to follow up was irrelevant if, as Mr Donaldson surmised, it would not have resulted in EGP warning about the deficiency of the design for fire protection. (However this submission assumes that had BM followed up its initial request it would still have been a general request and would have been specific or sought approval.)

4.2 EGP's case was that BM had responsibility for design, including design by other consultants, and for statutory and other requirements for fire separation, and for co-ordination between these requirements and Sainsbury's other requirements. BM therefore had overall responsibility for the co-ordination between EGP's structural design and those aspects of the architect's design which were intended to achieve adequate fire separation. BM produced the detailed design for the two hour compartment wall at grid line K (as built). BM had exclusive responsibility for ascertaining the performance characteristics and applications for proprietary products such as "Supalux" and "FlameBraker", whereas EGP would not have, nor be expected to have, any familiarity with such products. BM had an opportunity to reconsider its design in particular in 1991, when designing the wet fish area when it ought to have seen the inadequacy of the original design, particularly at the point where the two designs abutted. EGP's error was limited to a failure to appreciate from Drawing A3/6 that because it was proposed that the girder at grid line K should assume a new function as part of a fire compartment, he ought to examine the requirement for fire protection in that new context. In contrast BM's errors extended to almost every feature of the design: the Supalux was much too thin; Supalux and Flamebraker should have been provided to both sides of the girder; the fixings should have been fire-resistant. Because the girder was massive by comparison with the other elements, EGP's failure to note that it needed better fire protection was of no or doubtful causative relevance, compared with BM's failures. BM's letter of 30 October 1984 specifically asked for comment, but since none was given BM should not have assumed that the design was approved. BM did not need to be advised of the requirement for fire protection of the steel. Mr Hutton and Mr Spargo accepted that the need for fire protection was an obvious to a competent architect looking at the design. It was a fundamental, if elementary, error on the part of BM not to have overseen and checked the work of Mr. Wright who was not experienced enough to do the design properly; both at the time, when it was sent to EGP, when it was sent to Sainsbury, and when it was issued to the Contractor.

4.3 Mr Irvin further submitted that although BM had responsibility for ascertaining the performance characteristics and applications for "Supalux" and "FlameBraker" it was reasonable to expect that the structural engineer would have had some familiarity with such products and should have been able to see at a glance that the fire separation detail was flimsy and inadequate, let alone that there was unprotected steel work supporting it. It would be unusual for an architect to examine work previously carried out in order to check whether it had been properly designed and installed. It would not have been unreasonable in 1991 to assume that the existing compartment wall was to a two hour standard. Previous drawings would not have been scrutinised and visual observation from one side or the other of the compartment wall would not have made it obvious that it was to an inadequate design.

4.4 In reaching a decision on apportionment I have to do so on the basis that EGP was in breach of its duty to Sainsbury and I have to take into account matters which I have previously rejected or discounted. First, on what basis of liability is apportionment to be made? If EGP were liable to Sainsbury then in my view it would only be on the basis that it ought to have alerted BM to the need to look again at its design since drawing did not provide the girder with the two hour resistance assumed for it. A failure by a professional person to provide comment, without more, can rarely, if ever, be treated as a tacit approval, even if the subject-matter were within that person's competence. I do not accept that EGP would be liable for realising that BM had failed properly to implement Cape's proprietary system, although it necessarily assumes that a structural engineer such as EGP would have had some familiarity with the components to know that they might not be sufficient. Had Mr Donaldson understood that the girder formed part of the compartment wall he should then have queried BM's design as sufficient. EGP was not responsible for designing the fire protection required since that was an architectural matter so it would not have been required to do more, even though EGP ought to have had the expertise (which Mr Donaldson in fact lacked) to know that the system used by BM had been improperly applied. Even if EGP did not have Cape's literature at hand a phone call would have brought it.

4.5 EGP should not be regarded as equally responsible, as Mr Irvin submitted, and thus as responsible to Sainsbury as BM. First, BM were responsible for devising adequate means for the protection of the building against fire and its effects mainly by itself or in co-ordinating the work of other consultants. In this instance it devised the scheme. Its errors were elementary and fundamental. Secondly, responsibility for part at least of EGP's lack of response would have to be attributed to BM's failure to indicate what comments it was looking for and to its failure to chase EGP for a answer. Thirdly, responsibility for acting on EGP's "comments" would have remained with BM. Fourthly, BM had later opportunities to pick up its patent mistakes: when the existing design was transmitted to the contractor; but most important of all, in 1991 when its architects literally came face to face with the mistakes. They then devised a correct solution for the modification required to create the wet fish area. Whilst I understand why in human terms BM treated the design as settled, an architect is under a continuing duty as regards design. That duty does not require an architect (or engineer or other professional person) to keep previous work under constant review or to report a mistake that has been discovered, except where third parties may be affected, since the client's interests are protected by the law relating to concealment, but it does come into play when an architect has occasion to look again at the design, eg when there is evidence of a possible deficiency or where, as here, the design itself is to be modified. BM's decision not to adopt its original design for the wet fish area ought to have caused it to look again at it and advise Sainsbury that the 1984 design was wrong.

4.6 Mr Moxon-Browne submitted that EGP's proportionate responsibility was minimal and should be measured in the order of 5%. I do not consider that this submission is right since if EGP were liable its share of responsibility could not be regarded as minimal. Previous decisions on contribution have to be treated with caution as each case depends on its own facts. However it is not irrelevant that in Worlock v Saws (1982) 22 BLR 66 Robert Goff LJ said that in cases where a building inspector had been negligent the "conventional approach" was then to attribute 75% responsibility to the builder and 25 % to the local authority (see also Acrecrest v Hattrell (1982) 22 BLR 88 where such an assessment was not considered to be wrong in principle). In Kensington etc Health Authority v Wettern Composites (1984) 31 BLR 57 an experienced official referee, His Honour Judge David Smout QC, decided that as between an architect and a clerk of works the apportionment would be 80:20, on the basis that the latter was like a RSM or CPO (the judge's preferred analogy) since under the JCT contract he was an inspector under the architect's direction and control and was the eyes and ears of the architect. In my judgment the role of EGP in relation to the design of the fire protection of the compartment wall ought not to be regarded as higher than that of a building inspector or clerk of works. EGP's negligence was essentially a failure to warn; it was required by BM to comment, not to redesign. However BM's failure to be specific, and its subsequent failures to pursue EGP for a reply, and above all, in 1991 to pick up the deficiency in the design in my view contributed as much as the original error. In my judgment the appropriate apportionment would be 12.5% to EGP and 87.5% to BM.

5.1 EGP's defence called into question the reasonableness of the settlement. BM's case that the settlement was reasonable was therefore set out at length in particulars under paragraph 3B of the re-amended third party statement of claim:

5.2 BM then pleaded in paragraph 9 that "by virtue of section 1(4) of the Civil Liability (Contribution) Act 1978 and the bona fide settlement referred to in Paragraph 3A above, the Plaintiff's allegations in paragraph 7(1)(a) and/or (b) and/or (c) of the Statement of Claim are deemed to be well-founded. ..."

5.3 EGP's case was pleaded in paragraphs 9-11 of its re-amended defence:

93. (ii)-(v)Sub paragraphs (ii)-(v) are admitted.

5.4 The first question that arises is whether EGP can assert that Sainsbury's case was for loss of a chance, namely, that the amount for which BM was liable should have been assessed on the basis that all that Sainsbury lost was the chance that the sales area might have been saved had the compartment wall had two-hour resistance or whether EGP were confined to the facts relied by Sainsbury, namely that the defects in the compartment wall were the cause of the sales area burning down and having to be replaced. EGP otherwise accepted that the settlement was reasonable.

5.5 Mr Irvin submitted that when testing the reasonableness of the settlement, the court should assume that Sainsbury's evidence regarding BM's liability would have been accepted had the matter proceeded to trial. He relied on section 1(4) of the CLCA and Arab Monetary Fund v Hashim (no. 8), The Times, 17 June 1993. In that case Chadwick J had to consider whether the proviso to section 1(4) of the CLCA required the assumptions of facts which had not been pleaded in the statement of claim against it but which would have been needed to rebut the pleaded defence. He held that the proviso did not go that far so that it was to be "read as if it contained the further assumption 'and that the defendant would fail to establish the factual basis of any collateral defence'".

5.6 Mr Irvin argued that since BM's liability to Sainsbury was in both contract and tort but since in tort there had to be damage to perfect the cause of action, and since Sainsbury had claimed damages on the basis on the actual cost of reinstatement, the settlement had for the purposes of the CLCA to be treated as having been made on that basis, by virtue of section 1(4) and not on some other basis.

5.7 Mr Moxon-Browne submitted that section was about liability and not about the quantification or measure of a plaintiff's loss. He contended that in Oxford University Press v John Stedman Group 34 Con LR 1 His Honour Judge Esyr Lewis QC had correctly stated the principle amongst those summarised at page 81: " A party who relies on the settlement as the basis of its claim for a contribution towards it must prove that it is reasonable, but does not have to prove strictly the claim made against him in all its particulars." Mr Moxon-Browne referred to the decision of the Court of Appeal in Stott v. West Yorkshire Road Car [1971] 2 QB 651. The plaintiff's claim had been was settled but it was held that under section 6(1)(c) of the Law Reform (Married Women and Tortfeasors) Act 1935 the defendant could only claim a contribution from a third party if it proved that it had been a tortfeasor (whereby the defendant would probably have to rely on the former plaintiff's evidence and the third party would rely on the evidence which the defendant would have adduced). Mr Moxon-Browne said that this was the vice at which section 1(4) of the 1978 Act was directed. However it affected only issues of liability and not damage: section 2 of the 1978 Act dealt with quantum and did not contain such a provision. The right of the third party to challenge the quantum of a settlement was not seen as giving rise to an anomaly of the kind exemplified by Stott. Indeed in Stott Salmon LJ said (at page 660 A-B): "They can, of course, also say that the damages paid by the defendants on the assumption that they were to blame were in any event far too high.". This view was repeated by the Law Commissioners in paragraph 51 of Law of Contract: Report on Contribution (Law Com No 79) (1977) which gave rise to the 1978 Act.

5.8 Mr Moxon-Browne therefore submitted that section 1 of the Act otherwise followed section 6(1)(c) of the Act, in that its wording "any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise)" was as regards the damage essentially the same as its predecessor "a tortfeasor liable in respect of damage suffered by any person as a result of a tort may recover contribution from any other tortfeasor who was, or would if sued have been liable in respect of the same damage." Accordingly if in relation to the 1935 Act, Stott showed that the words "damage suffered by any person" mean in effect "damage recognised at law and measured reasonably according to law"; then "the same damage" in the 1978 Act was to be defined in the same way. He submitted that it was unlikely that the word "damage" was intended to bear any different meaning in the 1978 Act, or indeed that any proviso to the 1978 Act should change the pre-existing law in this respect, in the absence of wording from which such an intention might be inferred. Section 1(4) of the 1978 Act was therefore to be interpreted as if it read as follows, with the interpolated words emphasised:

5.9 This interpretation was supported by section 6(1):

5.10 He submitted that liability could not be established against a defendant in respect of any damage not recognised at law and measured according to law.

5.11 EGP could therefore question the quantum of a settlement if it could show that, although Sainsbury had suffered some damage for which BM, the settlement included amounts not referable to such damage as reasonably measured by law. EGP's liability to contribute was limited to the "same damage," i.e. only that part of Sainsbury's damage reasonably measured according to law. It was now established that in certain cases a building owner might not be able to recover damages measured by reference to the cost of reinstatement if it were not reasonable to do so: Ruxley Electronics v. Forsyth [1996] AC 344. A third party should not be required to contribute to a settlement which reflected heads of damage irrecoverable at law, or damage measured according to some wrong principle (e.g. "cost of repair" rather than "diminution in value" or "damage to the reversion").

5.12 In Friends' Provident Life Office v Hillier Parker May & Rowden [1996] 4 All ER 260 Auld LJ said at page 272:

5.13 In my judgment the proviso to section 1(4) of the CLCA is concerned only with liability. It is relevant only to damage if proof of damage is an essential fact or ingredient of liability, ie of the cause of action. However in such a case, eg negligence, if the factual basis of claim includes some damage then for the purposes of the section 1(4) liability is established. The party claiming contribution does not then have to establish that there was liability to the person to whom a payment was made. Similarly if the factual basis of the claim, ie that pleaded by the person who was paid does not establish liability the party claiming contribution will have to prove that there was a liability to make the payment. I do not think that it is necessary to read into section 1(4) the words suggested on behalf of EGP (see also Birse Construction Ltd v Haiste Ltd [1996] 1 WLR 675 which was referred to by Mr Moxon-Browne in another context per Sir John May at page 680H), or to construe it so that it has that meaning if the distinction between sections 1 and 2 is to be maintained.

5.14 Similarly section 1 of the CLCA in referring to "damage" does not mean "damages". This was made clear both by Auld LJ in other passages in Friends Provident where he evidently accepted that proposition (see page 273), and by Roch LJ in Birse at page 682C. Accordingly under section 1 a person in the position of BM has a right to contribution provided that (1) the facts relied against it would, if established, have rendered it liable in law for some loss, (2) it has made a payment in respect of that loss and (3) the person from whom contribution is sought is liable in respect of the same loss. Section 1 deals only with liability. It does not affect the right of the person from whom contribution is being sought to assert that the person claiming contribution paid too much or that in assessing contribution the party liable to contribute should not be required to pay compensation for elements of the payment for which that person could never have been held liable had he been sued directly. These all matters which fall within section 2 as to which the only guidance given by the CLCA is in sub-section (1), namely that the contribution shall be "that [which is] just and equitable having regard to the extent of that person's responsibility for the damage in question" (not be it noted "liability") and in sub-section (3). Otherwise the contribution could be nothing or everything (sub-section (2)) even if in the latter case there would have been no liability for some of the loss for which compensation is sought. The Act thus does not employ words commonly used in descriptions of liability and damages. As Sir John May said in Birse at page 680C:

5.15 EGP is therefore entitled to call into question whether Sainsbury was entitled to recover on a cost of reinstatement basis.

5.16 Mr Irvin accepted that otherwise EGP were entitled to question the reasonableness of the settlement. However he rightly emphasised that Biggin & Co Ltd -v- Permanite Ltd [1951] QB 314 established that the court is not required to decide what should have been the proper amount of the settlement as if the matter were being tried; see per Singleton LJ at page 317:-

5.17 The test is an objective one. So the fact that settlement was reached following legal advice is irrelevant (see also His Honour Judge Hicks' lucid and helpful analysis of the judgments in Biggin in DSL Group Ltd v Unisys International Services Ltd (1994) 41 Con LR 33 at pages 39-43), as is the evidence of BM's underwriter. Settlements are to be encouraged as a matter of policy so it would be a discouragement if a party had to justify them in detail.

5.18 Next Mr Irvin submitted that "loss of chance" did not arise in this case. He said that any liability of EGP for negligence in connection with the design of the compartment wall was in fact and law for the same damage as is deemed to be established against BM, i.e. the burning down of the sales area. "Loss of a chance" has no application to the present case since the defects in the compartment wall caused the fire to spread to the sales area and burn it down, ie BM's negligence caused direct physical damage to Sainsbury's property. None of the cases concerning "loss of a chance" were concerned with actual physical damage to property alleged to have been caused by the defendant's negligence, but with the possibility of the plaintiff having lost the chance to get something he (or she) might have got but for the defendant's negligence e.g. a prize in a beauty contest (Chaplin v. Hicks [1911] 2 KB 786), loss of the chance to conclude a sale (Stovold v Barlows [1996] 1 PNLR 91), loss of a chance of success in negotiations (Allied Maples Group Ltd v Simmons & Simmons [1995] 1 WLR 1602), loss of the chance of selling a property for a higher sum (First Interstate Bank of California v Cohen Arnold [1996] 1 PNLR 17), loss of the chance of success in litigation (Kitchen v. Royal Airforce Association [1958] 1 WLR 563). In Allied Maples Stuart-Smith LJ said at pages 1609-1610:

5.19 Mr Irvin submitted that these observations showed that where some positive act of misfeasance (here negligent design of the compartment wall) causes actual loss such as a broken leg (here a burned sales area) there is no room for any discount for "loss of a chance". He argued that Hotson v. East Berkshire Area Health Authority [1987] AC 750 also established that in cases of physical damage caused by negligence there is no room for an argument that the plaintiff could succeed at least on the basis that he lost a chance not to get the disease. The plaintiff had to prove that the disease, injury, or other physical loss or damage actually resulted, on the balance of probabilities, from the negligence. If he does not do so he fails. Similarly, Sainsbury could not have argued that even though it was unable to establish on the balance of probabilities that the burning down of the sales area resulted from the defects in the compartment wall, nevertheless it at least lost a chance for its sales area not to burn down. Mr Irvin relied a passage from Lord Ackner's speech in Hotson (at page 792G):

5.20 Mr Irvin submitted that BM's evidence in the main action was directed at showing that the burning down of the sales area was inevitable before the fire breached the compartment wall, because it would have spread to the sales area in any case, either by other routes or through even a two hour compartment wall. He paraphrased Lord Bridge in Hotson (page 784B):

5.21 Mr Irvin submitted that if the argument on behalf of EGP were correct then every case, even cases involving personal injury or physical damage can be argued on the basis of loss of a chance where a third party is (or could have been) involved in the chain of causation and might have prevented the damage occurring.

5.22 Mr Moxon-Browne submitted that the questions for the court were:

5.23 Mr Moxon-Browne referred to the second and third types given by Stuart-Smith LJ in Allied Maples v. Simmons & Simmons:

5.24 I add also for convenience the following passage at page 1614C-E:

5.25 Mr Moxon-Browne also referred to Hobhouse LJ's judgment at page 1621B-G on the issue of evaluation, to First Interstate Bank at page 27D where Ward LJ had said that stages (1) -(3) of the analysis of Stuart-Smith LJ in Allied Maples were concerned with causation and were separate from the assessment of damages, and to Stovolds v Barlow at page 104 where Stuart-Smith LJ had said a court had to evaluate the loss of a chance of the sale going ahead as a result of the negligence. Thus he submitted that there was a 50% chance that BM would have revised the design and if it had done so there was a 50% chance that the Fire Brigade would have held the fire at the compartment wall and saved the sales area from destruction.

5.26 I have no doubt that Sainsbury's case was for loss of a chance. In the particulars which I quoted at the outset of the judgment it was said:

5.27 This plainly means that but for the negligence the fire was not capable of being confined to the stores or service area and it implicitly supposes that the fire would have been held at the wall. Thus as a matter of causation damage to the sales area would depend on the ability of the fire brigade to contain the fire at the wall, or with its help (which I shall treat as the same). Sainsbury's case therefore depended "on the hypothetical action of the a third party" (as Stuart-Smith LJ said in Allied Maples). The fact that BM did not question this assumption does not mean that in reality Sainsbury's case did not fall within stage or category (3) in the analysis of Stuart-Smith LJ in Allied Maples as it depended on the hypothetical action of the a third party, ie that the Fire Brigade would have tackled the fire in such a way that the sales area would have been saved. The fact that BM did not take this point does not mean that EGP cannot now establish that there was only a 50% chance of saving the sales area. BM was unlikely to have taken the point that had EGP responded to the request for comment there was less than a 100% chance that it would have redesigned the wall effectively but otherwise Mr Moxon-Browne is also right in his submission that stage or category (2) is also applicable in principle. Category (1) is not the correct analogy as Sainsbury suffered no loss as a result of EGP's assumed breach until the wall was put to the test in a fire. The wall was not damaged as a leg is broken. I have however concluded that BM would have acted had EGP replied as it ought to have done. That alone is insufficient for similar reasons. It is not as if Sainsbury had wished to sell the building and could get a full price because the wall was inadequate. The situation falls within category (3).

5.28 Two consequences flow from this conclusion. First, EGP submitted that it was relevant to consider how much the Sainsbury was seeking. A settlement which appeared otherwise objectively reasonable, might nevertheless be shown to be objectively unreasonable if it failed to take sufficient account of the upper limit of the claimant's actual (as opposed to pleaded) demands. Sainsbury's stated negotiating position was that it would accept "8.5m plus costs in settlement. It is common ground that the loss of a chance case was not deployed by BM. Thus EGP were entitled to decide whether as a matter of law, Sainsbury's proper claim was a claim for a lost chance; and if the answer was "yes" (as it is) the court should next consider whether the settlement figure took sufficient account of the effects of that analysis of the Plaintiff's claim. The second consequence is that the next area for inquiry concerns the likelihood that the fire might not have reached the sales area.

5.29 Judged by the witness statements in the main action of those who were present at the time of the fire there would be little doubt that the fire would have been held at the wall: see the statements of Deputy County Fire Officer Cart and Senior Divisional Officer Willard, particularly his supplemental statement. They were supported by the opinions of Sainsbury's fire fighting expert, Mr Karran (see his first report, especially sections 10.2- 10.16 and his supplemental report) and Sainsbury's fire expert Dr Goudsmit (para 6.1 of his supplemental report). BM's experts took a different view which placed BM in some difficulties even with the assistance of re-examination directed to narrowing the apparent gap between, for example, Mr Bullen and Mr Karran.

5.30 Mr Bullen's reports drew attention to how the fire had developed very rapidly and was of exceptional intensity. It had almost certainly been ignited with a view to swift and fierce fire as the seat of the fire was in an area where crisps were stored (stocks were generally high prior to Christmas). Mr Bullen, BM's fire expert, in his report of May 1997 noted the continuing growth, spread and intensity of the fire. Although the roof over the stores or service area began to go it did not fail so that it was not properly vented. In consequence the smoke was not dispersed and the firemen encountered molten bitumen on entering the area, although Mr Bullen agreed that with protective clothing and breathing apparatus they would not have had to withdraw. He thought that the "inherent building feature, in this case controlled not by Regulations, but by choice, ... was likely to lead to a severe and spreading fire". By choice he meant that the building had been built to Sainsbury's design. He was very sceptical about the feasibility of forming an effective "bridgehead" at the wall and to fight the fire within the service area from that point, which would form one arm of a pincher movement. It was not clear whether jets could have been usefully employed to fight the fire, as opposed to maintaining the wall, eg because the roller shutter and other fire-resisting doors should have shut automatically (although they could have been forced open and in fact one had no automatic operating mechanism and two others failed to operate, according to the Fire Brigade Report), but he doubted whether all of the dampers in the services ducts had operated automatically at 68oC. The integrity of the wall would therefore have been weakened, and perhaps more important, there would be apertures through which smoke would enter the sales area making it less easy to deploy firemen without protection. Furthermore he thought that the intensity of the fire was such that the fire which had affected the roof would have spread over the roof deck as its covering was combustible and thus above the wall. (I do not think that if the wall had been redesigned it would have extended through the roof deck as it was not practice to do so at that time.) Mr Bullen pointed out that, contrary to the opinion of Sainsbury's expert, Mr Karran, there was not two separate buildings but one. He also thought that there was a likelihood of the fire spreading around the sides of the wall, (although in my view his assumption about the effect of the wind was questionable.)

5.31 Mr Whitaker had considered the statements of those responsible for fighting the fire and expressed confidence in the abilities of DCFO Cart and SDO Willard. He too noted that the bitumen roof was melting and he remarked on Station Officer Morris's statements which suggested that the fire had apparently rolled northwards over the roof. He took the view that if Mr Bullen were right and the roof of the sales area had distorted and opened up so that there was a severe fire on the upper surface of the roof the fire would have spread on the underside of the distorted roof with the possibility of dropping behind the firemen at the wall, and with the risk of a flashover from unburnt gases in the smoke. Factors such as these were important considerations since Mr Whitaker said that the safety of firemen now received more attention than had been the case in the past. This was illustrated by the decision to evacuate, as set out in the statement of SDO Burrell.

5.32 Mr Whitaker had also made a very careful investigation into the circumstances of a seemingly comparable fire at Sainsbury's store in Cheltenham on 9 September 1988, where the fire had been held at the wall. In summary he concluded that the two fires were not comparable in their severity or rates of development (the roof at Cheltenham had form of fire retardant) and that the techniques employed at Cheltenham did not amount to forming a bridgehead at the wall as only one of four jets was positioned at that point. Interestingly he also that he had been unable to find any other fire in the period between 1991-1996 in a supermarket where the damage exceeded £300,000 and where a fire had been held at a fire wall.

5.33 In deciding whether EGP is right in its contentions that, even if a suitably designed compartment wall had existed, there was no more than a 50% chance that the fire brigade would have able to contain the fire to the service area, I do not accept Mr Irvin's submissions that one must look at the facts and, for example, decide where causation ends and quantification begins. Considerations of the kinds set out by Stuart-Smith LJ in Allied Maples are primarily apposite in determining a claim by a plaintiff against a defendant on findings of facts. In a claim for contribution such as the present where the situation is necessarily hypothetical such questions, albeit of law, are subsumed in the broad question posed by section 2 of the CLCA: what amount of compensation is it just and equitable to award "having regard to the extent of that person's responsibility for the damage in question"? A person cannot be held responsible unless his acts or omissions were causative of the damage but a clinical approach is in my judgment inconsistent with the manner in which this Act is to be read and applied. Nevertheless I accept Mr Moxon-Browne's approach as it is based on the dicta of Stuart-Smith LJ in Allied Maples at page 1614 and it is consistent with a just and equitable determination of responsibility and assessment of compensation under section 2.

5.34 I do not think there can be any doubt that if there had been a compartment wall the fire brigade would have had a significant, measurable chance of holding the fire at the wall and saving the sales area, in the sense that it could not be said that it did not have an insignificant chance of doing so. What would be the measure of that chance?

5.35 I have to say that some of Mr Bullen's opinions are not consistent with the probable facts. To take the best example DCFO Cart in his supplemental statement said that before 1500 there was "a large column of black smoke, coming from the rear of the store, being driven up hundreds of feet into the air. ... I considered that there had been a failure of the roofing...... The smoke did not contain any apparent sign of flame[ so he thought that the roofing material was not then burning]. .... My initial conclusion was that the fire was not being entirely vented but that some venting was taking place". However I consider that he was fundamentally correct in his conclusion that the intensity of the fire would probably (it is not possible to say more) have led to it spreading along the roof towards the sales area and that it would in any event have circumvented a properly designed wall, despite an array of available efforts to prevent it doing so. Indeed on the reports and evidence of both Mr Bullen and Mr Whitaker it is difficult to arrive at any other conclusion. I have no hesitation in accepting Mr Whitaker's opinions as he was plainly most experienced and meticulous in his examination of the available evidence. In particular I accept that the containment of the fire at Cheltenham does not provide a safe basis for comparison.

6.1 I deferred consideration of this topic as the facts relied by EGP were connected with its case on "loss of a chance". Forskringsaktieselskapet Vesta v. Butcher establishes that contributory negligence is available in cases of breach of contract where there is concurrent liability in tort. Thus EGP is in principle entitled to argue that there may be contributory negligence so as to reduce the damages for which EGP it might have been liable to Sainsbury (on the same basis as I have already assumed) for under section 2(3)(b) of the CLCA its liability may be capped if the damages for which it might have been liable are to be reduced on account of contributory negligence. Hence EGP dealt with contributory negligence earlier in its submissions.

6.2 BM in its defence to Sainsbury's claim had pleaded, amongst other things, that (1) Sainsbury's employees had been negligent in design and supervision in that (a) BM's drawings had been seen and not disapproved of by Mr Huxtable, Mr Dunkley, the company architect, and Mr Cutts, Sainsbury's Fire Safety Officer; (b) the position of the wall in relation to the girder had been decided by Mr Huxtable and could not have been changed without major replanning; (2) Sainsbury had obtained a waiver or dispensation from the DOE so that the ceiling void over the sales area did not have barriers in it (which were otherwise required by the Building Regulations) and thus the fire could more easily spread; (3) Sainsbury had created openings in the wall for services; (4) Sainsbury had not maintained the fire shutters in the wall so two had not closed automatically; (5) Sainsbury had refused to install a sprinkler system.

6.3 EGP not surprisingly adopted most of these allegations and redeployed them against BM. Mr Moxon-Browne submitted that there should be a reduction of between 33% - 25% on account of contributory negligence. Mr Moxon-Browne's submissions also questioned the reasonable of the settlement on the grounds that the result did not reflect the strength of BM's case. I shall deal with the heads in order in which they were presented for EGP (which include other complaints).

6.4 First, Mr Moxon-Browne submitted that sprinklers in the stock section would either have extinguished the fire altogether or at least contained it so that it could be fought successfully by the Fire Brigade. He relied on Mr Bullen's report, in paragraph 4.7 of which Mr Bullen had said that a sprinkler system would have stopped the fire at an early stage and Sainsbury's decision not to follow well-established practice was dictated by desire to save money. Mr Bullen referred to Mr Dunkley's witness statement which said that it was established policy not to have sprinklers in the sales area as they did not contribute to the safety of staff or customers and they go off damaging stock. He said that this policy was in line with "accepted thinking for such single storey stand alone stores". However he accepted that here had been difficulties in obtaining regulation consent at Chichester for a store without sprinklers so that it had been necessary to obtain a waiver. Mr Whitaker naturally took a different view. In section 8 of his Report he said that a sprinkler system would have reduced the fire to small proportions and the fire would not have reached the sales area. So also the evidence showed that the roof design was at least partly responsible for the very rapid spread of fire over the sales area, and on any hypothetical scenario would have had an important effect on the rate of spread of fire. See Mr Bullen's report at page 8; see also Whitaker's report and his oral evidence.

6.5 Mr Irvin submitted that it was most unlikely that Sainsbury would have been held to have been at fault in not installing sprinklers since it had convinced the DOE that a waiver was appropriate. In addition in the Sales area sprinklers would not have affected the fire. Mr Irvin did accept that Sainsbury took economics into consideration and that it could have taken greater precautions in relation to the spread of fire. However he submitted he was entitled to conduct its business with economy. Any reasonable supermarket owner would have acted similarly. Furthermore, in the main action, BM could not complain that its client was what it was.

6.6 In my judgment the absence of sprinklers is not a matter which entitles EGP to a reduction in damages on account of contributory negligence by Sainsbury. Clearly the installation of a sprinkler system would have averted the destruction of the sales area, although as Mr Jowett observed in paragraph 5.15 of his report in the main action: "to be in any way effective, sprinklers would be needed in all parts of the building". The safety of the staff and customers was however fully protected in other ways. Despite the objections of the local authority and the Fire Brigade the DOE was satisfied that the installation of sprinklers was not necessary. So sprinklers would only have helped to cut down property damage. Liability for property damage is essentially a matter between a building owner and its insurers. Evidently Sainsbury's insurers did not require sprinklers to be installed nor did they impose special conditions in lieu. Sainsbury was in my judgment free to decide whether it was in its own commercial interests to install sprinklers. Others might have done so but I do not consider Sainsbury was at fault in not doing so. BM knew that there would be no sprinklers, as did EGP. They must be taken to have accepted the risk that any damage caused by negligence might therefore be greater than it would have been. I see no ground for holding that there was contributory negligence in not having sprinklers.

6.7 Next, were Sainsbury at fault in requiring a roof with a continuous readily-combustible roof deck across the plane of fire resistance? Mr Moxon-Browne submitted that this was a poor design in the context of fire resistance and was also dictated by the desire to save money. I have already found that it was a critical reason why the Fire Brigade could not have saved the sales area, and why damage might have been sustained in the sales area in any event.

6.8 In my view the choice of the roof deck is in the same category as the decision not to have sprinklers. Furthermore the roof deck did not require a waiver. It was a common form of construction.

6.9 The absence of fire barriers in the ceiling void over the sales area is also in the same category. The waiver obtained from the DOE also dispensed with the need to install cavity barriers in the plenum above the sales area, ironically on the footing that they (and sprinklers) were unnecessary as there was a compartment wall with a two hour fire rating. Sainsbury's practice was to use the ceiling void above the sales area as a return air plenum so it is understandable that it wished to avoid having barriers, which would have been installed only every 20 metres to prevent fire travelling through the roof space and emerging behind people thus trapping them. Furthermore, no one from BM or EGP suggested that there was anything wrong in omitting cavity barriers. In these circumstances I cannot see that Sainsbury were at fault. Equally, although a wall was bound to be punctured with services, and there was evidence that some at least were not adequately fire-stopped, I do not consider that these mistakes made a material contribution, or ones for which there was justification that Sainsbury (and not its contractors) should be held responsible. The absence of any automatic closing device on one door and the failure of one or more devices is more serious and is prima facie evidence of a lack of maintenance. However I am not persuaded that in reality these mistakes made much difference: see the evidence of those on the scene. The doors were rubber self-closing doors which would have helped to keep smoke at bay.

6.10 Finally, were Sainsbury contributorily negligent in approving drawing A3/6? BM's case in the main action was that Sainsbury were closely involved in the design process and had to accept some responsibility for it. EGP's case followed on. Its staff architect, Mr. Huxtable had been responsible for the conceptual design and he continued to keep a close watch on its development by BM. Mr Hutton said that he saw every drawing and frequently required changes. His approval to the redesign of the wall to dry construction was sought and was given. He certainly saw drawing A3/6 (and he seems to have been aware of its proposals since he seems to have written on the covering letter. BM's errors were obvious and ought to have picked up by any competent architect.

6.11 Mr Irvin submitted that it would be wrong to hold Sainsbury liable. It had deliberately appointed another architect to take over from Mr Huxtable. Naturally Mr Huxtable had to see that Sainsbury's requirements as set out in its manuals were followed. The fact he did so meticulously did not mean that Sainsbury became responsible for checking BM's work. The clerk of works, Mr Glaysher, would not have had the expertise to spot the flaw. The Fire Safety Officer had no architectural training at all.

6.12 In my judgment this is not a case where the client, whilst retaining his own staff architect, nevertheless handed the architectural work over to the incoming firm of architects and left it to them to see the project through to completion, being involved only when decisions were required from the client. I have taken into account the witness statements obtained by Sainsbury from Mr Huxtable and others but I have come to the conclusion on the evidence that I had from Mr Hutton and Mr Spargo that Sainsbury did not detach itself from the project (see my earlier findings under the heading "History"). The M & E services continued to be its responsibility and its engineers did not work with BM but continued to work as if the previous arrangements were in force. Similarly Mr Huxtable continued to behave as if he were still in charge. He seemed to have regarded BM as merely delegates working under his supervision and direction. No doubt compliance with the requirement of the manuals would lead to BM seeking approval when it would not been sought in other circumstances. Nevertheless I consider that Mr Huxtable did examine every detail and drawing with great care and that the pattern of his supervision was such that he himself would have expected to have picked errors of this kind as he evidently had high standards and expected others to meet them too. It is well established that when contributory negligence is set up as a defence, its existence does not depend on any duty owed by the injured party to the party sued, and all that is necessary is to prove that the injured party did not in its own interest take reasonable care and contributed to the damage of which it complains. Mr Huxtable's failure to spot the errors was clearly causative of the wall being built to a defective design. It would be right that Sainsbury should not have received full compensation. In my judgment Sainsbury should be held partially responsible for Mr Huxtable's failure to detect the mistakes, but given that BM were primarily responsible, both contractually and professionally, its damages would only have been reduced by 20%.

7. Interest

7.1 The submissions on behalf of EGP assumed that any allowance for interest in the settlement or in assessing a contribution would be probably equivalent to the effect of a reduction for contributory negligence. The submissions made on behalf of BM made no such assumption. I have therefore to deal with interest.

7.2 Section 1(4) of the CLCA entitles a party to contribution towards a payment made for a claim "in respect of any damage". As damage means loss and not "damages" and since the precise basis of liability is, by virtue of section 6, irrelevant, contribution may be recovered towards a payment which includes an amount for interest, even though there is strictly no right to interest as an award is dependent on the court's exercise of its statutory power and discretion. However it is only for historical reasons that compensation for the loss of use of money (which is an obviously foreseeable consequence of the breach of duty) has to be awarded separately in this way. In some cases, eg where the loss is quantified by reference to cost which has not yet been incurred or which has only recently been incurred the payment will already include an element on account of the effect of the passage of time. It would therefore be odd if interest were not treated as part of the loss and, for the purposes of the CLCA, as an eligible element of "damage". An award of interest is part of the compensation: see the judgment of Auld LJ in Friends' Provident, which I set out above.

7.3 Mr Irvin submitted that it might be assumed that Sainsbury would be entitled to 35% by way of interest on its losses to compensate it for being kept out of its money from early 1994 (taking April 1994 as a median date between the first expenditures and losses of profit following the fire in mid-December 1993 until August 1994 when the store re-opened) and thereafter until the date of payment in October 1997, ie 9% for 3 years and 10 months. If 8% were used the percentage would be about 31%. (Mr Irvin also said, somewhat jocularly, that he would settle for 28%.)

7.4 In my view Mr Irvin's approach is consistent with what I would expect a settlement figure to contain. Rates of interest vary so I would have thought it fair to use a figure of 30%.

8. Costs

8.1 Mr Moxon-Browne submitted that under the CLCA costs were not part of "damage". They were a loss caused by the necessity to take proceedings against a party and a contribution could not be recovered in respect of them. Birse Construction Ltd v Haiste Ltd showed that they would be regarded as "the same damage". The amount would depend on factors unrelated to the cause of the original damage, such as the time that the party seeking contribution admitted liability or the time when it was possible to compromise the proceedings. If there were any power under the CLCA to order a third party to contribute towards costs paid by a defendant to a claimant that could only be because it is "just and equitable" to order it "having regard to the extent of [the third party's] responsibility for the damage in question". Furthermore it might be assumed that where there was a settlement on the basis of assumed or admitted liability the agreed figure include most if not all of the claimant's costs. Sainsbury had estimated its costs to be about £1m, as pleaded by BM in paragraph 3A of the third party statement of claim. There was however no material upon which a court could form a judgment as to whether such a figure was reasonable in itself or what might the amount allowable on taxation or how much would have been avoided had the settlement occurred earlier, for it would be relevant in determining objectively the reasonableness of the settlement to know why the case did not settle earlier.

8.2 Mr Irvin contended that on a proper construction of the CLCA a payment to settle an action for damages which included an element for costs was still a payment " in respect of damage". If there had not been a settlement but judgments after trial in both the main action and in the contribution proceedings the party seeking contribution would ordinarily be able to apply to the court for an order that the person liable to contribute should also pay the whole or part of any costs for which the party liable to the primary claimant might have to pay to that claimant. It would be anomalous if that party were worse off if it negotiated a settlement and averted a trial. In addition if the same figure had been expressed to be on the basis of each side paying its own costs would the point have been open to EGP? Mr Irvin's arguments suggested that the CLCA might contain a lacuna. He therefore maintained its effect could be avoided since for the purposes of determining a just and equitable contribution the settlement figure even on the basis that it made for "loss of a chance" was still a good settlement: Sainsbury had sought about £15m and in a case of clear liability a figure of £7.125M should be treated as a reasonable settlement so that it would not be right to deduct anything for costs before determining the share which it was just and equitable that EGP should bear.

8.3 The point raised by the arguments on this topic is a short one but apparently requires the resolution of a conflict between the principle that reasonable settlements are to be encouraged (which inevitably means that costs are taken into account in arriving at the figure) and the wording of the CLCA. On that approach the Act must of course prevail as it is the source of BM's right to a contribution. It is therefore in my view irrelevant that if contribution were awarded on the basis of settlement then costs would only be considered as part of deciding objectively whether the settlement was reasonable overall (even though that may involve grappling with points of the kind made by Mr Moxon-Browne). If in Birse Construction Ltd v Haiste Ltd defects in works caused by a contractor's breach of contract were not for the purposes of the Act the same damage as the contractor's costs of putting them right then the costs of having to bring an action to enforce a duty by claiming damages in lieu of performance cannot be regarded as the same damage as that caused by failure to comply with that duty. Even if there had not been such guidance from Birse (and leaving aside the situation where the party from whom contribution is sought could be said to be responsible for the costs that had to be paid under a settlement) costs in a case such as this arise from the defendant's decision not to accept liability and not from the original cause of action. The amount may well increase either because the defendant adheres to that decision or because either the claimant or the defendant is intractable (or both are) in not contemplating a settlement or in negotiating its terms, as Mr Moxon-Browne's submissions well illustrated. Even on a wide interpretation of either section 1 or section 2 of the CLCA costs could not therefore as a matter of fact form part of the loss or damage with respect to which a party is entitled to contribution and in any event could not be loss or damage for which a party such as EGP could be regarded as responsible. I also accept Mr Moxon-Browne's argument that costs may be incurred for reasons unconnected with the underlying damage and for which a third party is not to be held to be responsible. A detailed investigation of how costs came to be incurred is not consistent with the simplicity envisaged by the CLCA. On a liberal interpretation of the Act it would not in my judgment be material that an award of costs is determined by the exercise of the discretionary power given under section 51 of the Supreme Court Act since any compromise necessarily anticipates that a court will or may exercise its powers in favour of the party receiving payment, and as a result of the decision of the court there will be a liability whereas the liability referred to in section 6 of the CLCA is the primary liability (see Friends' Provident).

8.4 I do not consider that there is a real anomaly or lacuna or that a party in the position of BM is at a disadvantage. In arriving a settlement which deals with costs such a party must take into account that costs will or may be treated differently depending on whether or there is a settlement or whether the action and third party proceedings continue. If there is a settlement its terms (and the circumstances leading up to it) will be (or may be) examined. If costs are not isolated but are included in the settlement then they will obviously not be capable of being excluded. Here it is accepted by BM that at the time of the settlement Sainsbury's solicitors, Davies Arnold & Cooper, had stated that Sainsbury's costs were estimated to be £1m. Statements of that kind are material factual representations which are sought and intended to be relied on in deciding whether to settle and at what figure. The settlement was inclusive of interest and costs. Therefore the figure of £7.125m would have to be reduced by an amount in respect of costs.

8.5 In order to arrive at the amount of such a reduction consideration would have to be given to the facts that BM paid into court £3.629m which plainly indicates that it saw that its case on liability was poor but that it did not admit liability (as it ought to have done) and that it did not take the point that Sainsbury's case was fundamentally for "loss of a chance." In these proceedings I have seen the consequences since I have been required to take into account the 52 witness statements of fact which were obtained for Sainsbury by its solicitors (or its experts presumably under their direction) and the 13 or so primary and supplementary experts' reports which had also to be prepared. In so far as they related to liability they were not necessary and the costs of obtaining them has to be excluded. In so far as they related to causation and quantum it is fair to observe that if Sainsbury had not from the outset decided to put its own interests before compliance with the court's orders BM might have been in a better position much earlier on to make an assessment of its position so that I think that Sainsbury might have been in real difficulty in recovering the whole of estimated £1m had costs been left to taxation. Finally the figure was an estimate and was not likely to have been an under-estimate. My broad assessment of the amount truly referable to costs which Sainsbury might have recovered from BM is £700,000 and that amount would need to be deducted if the settlement figure were used for the basis of assessing contribution.

9. Quantum

9.1 EGP's case was that if Sainsbury's claim should have been assessed on the basis of a loss of chance, it was first necessary to eliminate the parts of the claim which were in any event unreasonably inflated or irrecoverable in principle. In view of my earlier conclusions it is necessary to bear in mind that Sainsbury's claim was originally for approximately £11m or £12m (depending on timing) plus interest and costs, making £14.5m. Mr Moxon-Browne accepted that it might be said, that, where there could be little or no room for manoeuvre on liability (and thus no discount beyond "nuisance value"), a reduction of about 50% to £7.125M could be regarded as a reasonable result. However in my view he was right in his submission that the validity of that approach assumes both that Sainsbury could prove a loss of that order and that it would have been the true measure of damage. EGP thus wished to establish that the claim included items that had to be removed before arriving at a figure upon which the evaluation of "loss of chance" might properly be applied. Some of the amounts are relatively small. Mr Irvin pertinently submitted that prior to the settlement the quantity surveying experts for Sainsbury (Mr Suckling) and BM (Mr Jervis) had been meeting in order to see if Sainsbury's claim could be agreed and had made good progress and were still in the course of reaching agreement when the action was compromised. Sainsbury's claim had been reduced in part and the settlement should be treated as reflecting that Sainsbury realised that if the action were fought out it might get even less for which an order for costs would not necessarily be sufficient off-setting compensation. EGP however wished to demonstrate the cumulative effect of the items or heads which it had singled out for criticism.

9.2 This cost was pleaded as £3,631,314. First, it was said that there were an element of "betterment" in that the sales area was larger after rebuilding than before (by 105m2 out of 6,391m2), and that the cost in connection with external works and ground works should also be excluded. Mr Jervis thought that the increased floor area should be valued at £150,000 (a reduction from his original estimate of £445,752). Mr Suckling accepted that there might be an element of betterment but having reconsidered the figures used came to the conclusion that it would be more helpful to look at the overall increase in the area of the whole store (service area included) and a cost per m2 for the whole (as opposed to a separate cost per m2 for each main area). Mr Irvin referred to Harbutt's "Plasticine" Ltd v Wayne Tank and Pump Co Ltd. [1970] 1 WLR 447, in which the plaintiff was allowed the cost of replacement. However at page 468 Cross LJ said:

125. "They replaced it in the only possible way, without adding any extras. I think that they should be allowed the cost of replacement. True it is they got new for old; but I do not think that the wrongdoer can diminish the claim on that account. If they added extra accommodation or made extra improvements, they would have to give credit. But that is not this case." [my emphasis]

126. In my judgment Sainsbury was adding extra accommodation for which credit would have had to be given. I do not consider that the value of that accommodation can be assessed looking at the overall area of the building for the claim is being made in respect of the sales area. Mr Jervis's approach is correct and on his estimates the cost of reconstruction could have been reduced by £150,000.

9.3 The external works to which exception was taken - new pedestrian areas (£29,200), new shop front street furniture etc (£13,700) and new fire escape path (£21,100) - all seem to be integral to the need to reconstruct the sales area to the standards of the 1990's and on settled principles are not betterment. Whilst they might have been excluded I cannot say that they should be taken out, especially since Mr Jervis's descriptions did not match those of Mr Suckling.

9.4 Mr Jervis also took out £395,000 for further piling works, ground beams and other foundation works, concrete ground floor slabs, etc, in the sales area as he believed that they were attributable to Sainsbury's decision to have a differently arranged building. Mr Suckling agreed that this sum was reasonable for such groundworks but justified its inclusion on the basis that the fire damage could well have extended to the ground floor slab and below, especially since the fact that the site was a former tip made the foundations unusually complex.

9.5 At first sight the structural engineering evidence provides some support for the view expressed by Mr Suckling that the substructure was damaged by the fire or by the collapsing roof since Mr Skilton's report of May 1997 in the main action said that in the stores or service area work would be needed below the ground floor slab and there might have to be work to determine whether the methane barrier was intact. However paragraph 3.2(e) of the supplemental statement of Mr Chadwick (who was Chairman and Managing Director of RGCM and, a little ironically, had been the Technical Director of EGP in 1984) stated "following the actual fire, the floor slabs remained largely intact. The bulk stock slab was scabbled down by 50mm and a new power float finish applied." The provision of additional piling and ground beams, etc would be needed if the original plan were not followed. These items seem to me to be additional works. On the evidence available I consider that £395,000 could have been deducted.

9.6 Mr Jervis thought that Sainsbury spent about 5% (or £80,088) more than it needed to have done by not obtaining competitive tenders for some of the rebuilding works packages but instead by negotiating prices with the contractors for work to an approximate value of £2.7m (from which £1.1m had to be deducted for other reasons). Mr Suckling, whilst not questioning Mr Jervis's proposition that the best prices are obtained by competitive tender, demonstrated in his report that the negotiated prices were not above market rates.

9.7 In my judgment this suggested deduction is untenable. The evidence is clear: in December 1993 Sainsbury was faced with the need to rebuild an established supermarket as soon as possible so as not to lose any more of its share of the local market than was necessary. Obtaining competitive tenders for work presupposes that the prices obtained will not only be significantly better than negotiated prices but that any such advantage will not be offset by the time needed to obtain competitive tenders and later by the successful contractors seeking to recover the effects of competition. It is a well-established principle that damages are not to be reduced because the need to take a decision urgently resulted in costs which in retrospect can be seen to have been reasonably avoidable: see British Westinghouse v Underground Railways [1912 AC 673 in which it was also said (at page 689) a plaintiff is not obliged "to take any step which a reasonable and prudent man would not ordinarily take in the ordinary course of business." In addition Mr Suckling's report suggests that Mr Jervis's analysis is theoretical. If Mr Jervis's view were to be accepted he would have had to deal convincingly with Mr Suckling's report and to overcome the hurdles set out above. When dealing with the appointment of consultants Mr Jervis accepted that the need for a rapid start made a negotiated fee arrangement the most expedient.

9.8 However Mr Jervis said that the fees paid to RGCM for Management and Supervision services were too high at the equivalent of 8.7% of the building and equipment costs (£603,000). It ought to have been 6% which on the cost referable to the sales area was £173,786. Mr Suckling analysed Sainsbury's other fees and showed that the fee for Chichester was less than the average paid by Sainsbury. In my judgment bearing in mind the circumstances in which Sainsbury found itself in 1993 it would not be criticised either for appointing a construction manager (who would thus be providing management services which might otherwise be the responsibility of a main contractor and paid for as such) or for the fees paid which do not seem to me to be so untoward that there could have been any significant reduction.

9.9 EGP contended that even if the fire had been contained at the wall there would in any event have been damage to the sales area, exemplified by one of the matters agreed between Sainsbury's and BM's structural engineers on 2 July 1997:

128. On this basis Mr Jervis arrived at an estimate of £380,000 as the minimum work likely to be required. Mr Suckling's estimate was £31,000, which I regard as wholly unrealistic, since I accept Mr Whitaker's evidence on the effect of the fire (see paragraph 6.19.3 of his supplementary report). I think that Sainsbury's costs could well have been reduced by about £350,000 which Mr Moxon-Browne suggested was a reasonable figure.

Allowance for Realistic Rebuilding Programme

9.10 It was suggested by BM that if the sales area had escaped largely unscathed it could have been completed on a limited but sufficient basis for trading to restart by early April 1994, ie two months earlier than was the case. Thus at least £1m by way of loss of profits would have been avoided. Somewhat paradoxically this case assumes that Mr Jervis's lowest estimate of the work needed is correct (which in itself shows the delicate nature of the balance between some of these items) and that the fire at Cheltenham provides a useful and comparable indication of the likely effect if the fire had been contained. Mr Irvin referred me to a number of statements in which Sainsbury's witnesses had criticised BM's case which EGP had adopted and submitted that Sainsbury had an answer to every point which suggested BM's programme was unrealistic and that on that basis an opening in February could have been achieved and that Mr Jervis would have had an uphill task to fault their analysis.

9.11 To decide such a complex issue as a "desk study" with no more than a little oral evidence from Mr Jervis is a challenge. I shall however take a simple approach, as I have concluded that I cannot otherwise decide this issue satisfactorily. First, whilst I can understand why BM had to rely on expert opinion, EGP was involved with the rebuilding and one might ordinarily have expected to have had some direct evidence from its staff, if any of them had any disquiet about the manner in which the rebuilding project was carried out or could have given useful evidence bearing on the hypothetical situations raised by BM in the main action and adopted by EGP in these proceedings. However, as no such evidence is available, I draw no adverse inference but deal with the issue as a matter of impression. Secondly, I therefore turn to the witness statements proffered by Sainsbury from those who were directly involved at the time. As a rule of thumb evidence from those with first-hand knowledge is generally to be preferred to the opinions from people without such knowledge. They include evidence from RGCM: Mr Chadwick, who was also a main Board Director of EGP until he resigned in 1994, and, in particular, Mr Tomkins, RGCM's planner whose statements dealt fully and, in my view, convincingly, with the points made by Mr Jervis. Mr Tomkins pertinently observed that Mr Jervis is a quantity surveyor, and whilst quantity surveyors may nowadays be well qualified to express opinions on planning and programming, Mr Tomkins is in my opinion right in saying that "programming has become very much a specialist area." Every one of RGCM's projects has run to programme so weight must be given to his opinions. Thirdly, although the contents of these witness statements were not tested, I see no reason why they should be discarded in any way as they appear to be entirely justified. Many of them were accompanied by detailed and helpful annexes. Reading them against Mr Jervis's views I have to say that for the purposes for which I have consider them they are to be preferred to his views so that I am not prepared to find that the sales area would have been completed as Mr Jervis suggests.

9.12 Sainsbury claimed £3,430,000 for loss of profit between 16 December 1993 and the re-opening of store on 16 August 1994 and for losses thereafter. In addition under the heading "Cost of Salaries" (item 7 of the amended appendix 2 to Sainsbury's statement of claim) a claim was made on the basis of calculations carried out by Mr Granville (a Sainsbury employee) for some £544,000 of which the largest item was for labour costs for staff from the Chichester store for whom work was found elsewhere until the store re-opened (see below).

9.13 Sainsbury's claim for £3,430,000 for loss of profit was the total of £2,548,000 for loss of profit during the period when the store was shut and £882,000 for losses sustained in the "recovery period", the period before trading returned to the level that might have been expected but for the closure. Mr Hobbs suggested that the amount claimed by Sainsbury for losses in the "recovery period" were due to the fire and not to the fire reaching the sales area since any closure for a significant period of time would have led to customers going elsewhere. If therefore the sales area had been relatively undamaged and had re-opened temporarily in February 1994 there would still have had to be a recovery period in which such losses would have been suffered. Mr Hobbs relied on an imprecise statement by Mr Coull, who was director of Sainsbury's property division: "I understand that based on other experience there would not have been such a recovery period had the store re-opened in February 1994."

9.14 Even if the fire had been held at the wall there would have sufficient damage to the sales area for the store to have been closed and on the evidence of Sainsbury's witnesses it is in my view likely that the store would have been shut for about two months. I find it difficult to accept that if the store had been closed for two months there would not have been some continuing loss of business. 96% of the customers came by car. The fire occurred just before Christmas so with the exception of the exceptionally prudent most regular customers would have had to drive to Tesco or elsewhere and it is inevitable that if the store was shut for two months many would have found that Tesco or Waitrose met their needs just as well as Sainsbury, despite loyalty campaigns. (Professor Percy's report provided a helpful survey of likely patterns of behaviour, which I have taken into account.) Part of the amount claimed for the recovery period may therefore be attributed to the fire and could have been deducted. I do not have the material to make a precise assessment of what might have been achieved by BM but a pro rata approach suggested by Mr Irvin is attractive. On this basis the claim might have been reduced by 2:6 months, ie by one-third of £882,000 = £294,000, say £300,000.

9.15 Mr Hobbs' first report said that part of the total salary costs of £527,839 (included in the claim for £544,000) might represent salary costs that were saved. Staff for whom work was no longer available at Chichester were redeployed elsewhere and it is conceivable that some were not employed as productively as they might have been. I doubt very much if any reduction would have been made unless it could be shown that some salary costs were unreasonably incurred for it was in Sainsbury's interest to retain staff who would be needed when the Chichester re-opened. Some of these costs would have due to the fire alone but they would have had to be isolated or quantified in some way. I do not think it right to find that there could have been a reduction of any sum, even a nominal amount. In addition although EGP claimed that there should have been a reduction of £91,724 I understood Mr Hobbs, BM's forensic accountant, to accept that this adjustment (which is mentioned by Mr Hobbs at paragraph 3.14 of his first report and is the subject of Mr Granville's supplementary statement) had been made in the sum claimed. It is in any event not a sum which would affect significantly the assessment of damages on the basis sought by EGP for if the salaries were not included then Sainsbury's other losses would have increased.

9.16 The statement of Mr Geoffrey Brown, Sainsbury's Technical Manager in 1993/4, whilst having no direct knowledge of the damage suffered at Chichester, prepared assessments of what he thought was destroyed and what might have been salvaged even if the fire had been contained at the wall. He thought that stock to a value of £387,404 would have been salvaged, of which 61.1% would have been resold at cost (£236,703) and the balance sold to salvage companies at a discount (£75,350). The two figures made up the stock loss figure of £312,053 claimed by Sainsbury. EGP thought that this assessment assumed that too high of proportion of stock would be destroyed given that the total value of stock was approximately £750,000. On the face of it the amount of stock salvaged does appear to be relatively low, even allowing for the fact that the electricity and other services would fail so that the contents of refrigerated units would be lost after four hours, and that all unpackaged goods would be affected by smoke. In my judgment Mr Moxon-Browne was right to submit that the claim could be reduced by about £150,000 on that account.

10. Conclusion

10.1 Accordingly if all these reductions were made Sainsbury's claim could have been reduced by about £1,345,000 so that, using EGP's figure for Sainsbury's claim and not that in its appendix 2, and its approach to the calculation: £11,884,769 - £1,345,000 = £10,539,769. If there had been liability the contribution would therefore have been: £10,539,769 x 35% = £3,688,919 plus £1,106,676 as interest at 30% = "4,795,595, less £959,119 for contributory negligence at 20% = £3,836,476, for which EGP's share of responsibility would thus be 12.5% = £479,560.