Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION
	[2013] CSOH 159
CA65/11	OPINION OF LORD HODGE in the cause ICL TECH LIMITED, ICL PLASTICS LIMITED AND STOCKLINE PLASTICS LIMITED Pursuers; against JOHNSTON OILS LIMITED Defender: ________________

Pursuer: Dean of Faculty, Ms Springham; HBM Sayers

Defender: Gray QC, Pugh: Simpson & Marwick LLP

25 September 2013

[1] On 11 May 2004 at about noon an explosion occurred at Grovepark Mills, Maryhill, Glasgow ("the premises"). It killed nine people. Forty-five people were seriously injured or exposed to the risk of serious injury or death. Lord Gill chaired a public inquiry into the incident in 2008. Injured people and relatives of the deceased ("the injured parties") sued the pursuers and recovered damages from them. The pursuers now seek a contribution from the defender ("JO") under section 3(2) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1940 on the basis that JO would have been found liable in damages to the injured parties if they had sued it.

[2] This action is a claim to recover a contribution towards the damages of £191,451.88 and expenses of £23,370 which the pursuers paid to Mr Archibald Lindsay, who was seriously injured by the explosion. Parties have agreed that this is a test case for the other actions in which the pursuers seek a contribution from JO.

[3] The second pursuer ("IPL") has owned the premises since 1969. All three pursuers operated a business from the premises on the day of the explosion.

[4] There is no dispute as to the cause of the explosion. There was an oven in the coating shop of the premises which was fired by liquid petroleum gas ("LPG") in its vaporised form. The LPG was stored in a tank in the yard of the premises. The steel pipe which carried the gas from the tank to the premises was buried underground. It entered the premises in an unventilated basement area, where it crossed the area before rising to the ceiling of the ground floor and descending to the oven. The steel pipe, which was galvanised, was not protected by tape or any other protective covering. The backfill around the pipe comprised unsuitable material which created an aggressive environment that may have contributed to the corrosion of the pipe. Corrosion of, leading to a crack in, a bend in the pipe, which was not galvanised, caused a leak of LPG. The gas tracked within the ground along the outside of the pipe towards the premises. Because the pipe had not been sleeved and the hole where the pipe entered the premises had not been sealed, the gas accumulated in the basement area. The LPG mixed with the air to form a flammable gas/air mixture. It ignited and the resulting explosion caused part of the premises to collapse.

[5] Counsel did not make any significant challenge to the credibility or reliability of any of the factual witnesses. Where there were inconsistencies between the evidence which a witness gave to the ICL inquiry and his evidence to me, the Dean of Faculty invited me to prefer the former which was closer in time to the events in question. He also suggested that some witnesses' focus was skewed by their perception that their contractual arrangements, which limited the responsibility of the supplier, restricted their duties under the general law. I have borne those criticisms in mind in my assessment of the evidence.

[6] Between February 1998 and the date of the explosion JO provided LPG to the pursuers. In their written pleadings the pursuers asserted that JO had been in breach of its duties under the Dangerous Substances and Explosive Atmospheres Regulations 2002. But, at the end of the proof, the Dean of Faculty did not argue any breach of statutory duty. Accordingly, the only basis on which JO would be liable in contribution is if it were in breach of its common law duty of care to the injured parties.

Factual background

(i) The nature of LPG

[7] There was no disagreement between the expert witnesses, Dr Cox and Mr Sylvester-Evans, and the factual witnesses: LPG is a hazardous substance. Once vaporised, the gas is 1.5 to 2 times heavier than air. It therefore accumulates at low points. It is flammable when mixed with air in concentrations of between 2% and 10%. This was well known within the LPG supply industry at all material times. Operators within that industry also knew that pipework was susceptible to corrosion, particularly when located underground, and needed to be protected by a coating or wrapped in a suitable material such as wax or tar/bitumen impregnated tape wrapping ("Denso tape"). It was also well known within that industry that suitable backfill material should be used around an underground pipe in order to protect it from damage.

(ii)  The industrial practices of LPG suppliers

[8] Companies in the Calor group of companies ("Calor") were the largest suppliers in the LPG market at all material times. They were exposed to competition from other suppliers. But the commercial practices of and responsibilities undertaken by the various suppliers in the market to commercial users of LPG were similar. In particular, the supplier of LPG to a commercial customer would frequently provide its own LPG storage tank. It would retain ownership of that tank and the pipework in the immediate vicinity of the tank up to the first stage regulator. The regulator controlled the pressure of the LPG and by reducing the pressure allowed the LPG to vaporise. Some suppliers owned the pipework up to the second stage regulator. But it was a general practice in the LPG supply industry for the customer to own and be responsible for the pipework and the rest of the gas supply system beyond the relevant regulator. The suppliers took responsibility for the tank and the pipework to the regulator. It was general practice for the supplier to inspect the tank and the pipe up to the first stage regulator annually.

[9] I discuss in more detail in paragraphs [42] to [49] below the safety tests which suppliers undertook when they installed their equipment or otherwise interfered with the gas supply system. In brief, they carried out a pressure test of the system to ascertain if there was a leak in the pipe. This involved closing a valve, which was usually located at the outside of the customer's building, releasing gas from the tank into the pipe at a high pressure and monitoring whether the pressure fell. A fall in pressure would indicate a leak in the system. If the supplier discovered a leak in the pipework which was not in its ownership it would switch off the supply and advise the customer. It was also standard practice for the supplier to test the valves and fittings within its ownership by applying a leak detection fluid (which some witnesses described as a soapy liquid) and observing whether there were any leaks. It was also practice for suppliers to carry out such pressure tests when inspecting their tanks every ten years.

[10] The limitations of such tests are obvious. They could demonstrate the integrity of pipe system only at the time it was tested. They did not disclose the condition of the pipework which was not inspected or which was not visible. They did disclose corrosion of such pipework and the possibility of a future or imminent leak.

[11] It was not the practice of suppliers to give their commercial customers advice on the maintenance of the pipework and gas supply system which the customers owned. The central issue in this case is whether the common law duty of care of such suppliers, and in particular JO, for the safety of people in the vicinity of the gas supply system imposed on the suppliers duties to inquire about the condition of the customer's pipework and to give unsolicited advice to the customer to investigate and maintain it.

The installation of the LPG tank and the supply of LPG by Calor

[12] In 1969 IPL entered into a contract with Calor for the bulk supply of LPG to its premises and the hire of a bulk storage tank. IPL employed contractors to install the pipework. The pipe was not protected by a Denso tape wrapping and the materials placed around the pipe were not suitable. The buried pipework was exposed to an aggressive environment which contributed to its corrosion. In 1973 the pursuers raised the ground level of the yard. As a result thereafter the pipe, which had surfaced close to the factory wall to enter the premises above ground through a bricked up window, remained below ground until it entered the building.

[13] The pipe entered the premises through a hole in the wall. The pipe was not sleeved where it passed through the wall and the hole was not sealed around the pipe. Initially the pipe passed through an open pit area. In about 1980 the pursuers extended the ground floor by installing a steel plate floor over the pit area, creating a new basement room. The basement room was not ventilated. It was initially used as a workshop and to store papers in a strong-room. Later it was used to store equipment. There was a safety valve on the pipe on the inside of the wall, where it entered the basement. For some years the pursuers' practice was to isolate the LPG supply at the end of a day shift by switching off this valve. Later they avoided going into the basement and isolated the gas supply by switching off the valve above the pressure regulator adjacent to the gas tank in the yard.

(iii) The safety record of the Pursuers

[14] There was evidence that the pursuers had had a poor record of compliance with the requirements of the Health and Safety Executive ("HSE"). There was historical evidence of concerns recorded by HSE inspectors about fire risks in 1972 and 1973. HSE served an improvement notice in 1975. On a follow-up inspection to check compliance in 1976 the inspector found an unsatisfactory response. This resulted in a prohibition notice. There was also evidence of instances of unsafe practices thereafter. These events however have little bearing on the events with which this case is concerned.

[15] Mr Frank Stott was responsible for health and safety from about 1980 until 2000, as managing director and (from late 1998) as a director of the pursuers. There was undisputed evidence that he and Mr Campbell Downie, the chairman and financial manager of the pursuers, did not co-operate with the HSE. In about 1981 HSE inspectors expressed concerns about the storage of propane cylinders close to the LPG tank and about the siting of that tank. The pursuers' senior management for several years sought to put off expenditure on a water drench system to meet HSE's concerns. Mr Keddie, an HSE inspector, complained about this failure in a letter to Mr Stott dated 11 April 1988.

[16] Mr Stewart McColl, who became managing director of the pursuers in 2000, undertook responsibility for health and safety in the premises from that date. He was generally conscientious and sought to improve the health and safety regime within the premises. He died in the explosion. Mr Bill Masterton, who gave evidence, was coating shop manager of the first pursuer ("ITL"). He spoke of Mr McColl's work to formalise the health and safety system by arranging meetings with employees, documenting maintenance programmes, and enforcing the wearing of safety clothing. Mr James Smith, a facilities technician, gave evidence of Mr McColl's introduction of a fumes cabinet and his enforcement of rules about the wearing of protective clothing. He also sought to introduce a risk assessment system but the staff who were involved appear to have had no formal training. No attention was paid to the gas pipework within the premises, except in the immediate vicinity of the LPG oven, where it was affected by the flame. No consideration was given to the state of the pipe elsewhere in the premises, including in the basement. No one addressed the state of the underground pipe. This is despite the clear warning which the pursuers had received from the HSE, to which I turn.

(iv) The concerns of the Health and Safety Executive about the LPG tank and the underground pipe

[17] In August 1988 an HSE technical specialist, Mr Tyldesley, produced an internal report of a visit to the premises and recorded his concerns about the location of the bulk LPG tank in the yard. He also recommended a pressure test on the pipework and excavation of part of the underground pipework.

[18] On 8 September 1988 Mr J K Ives, a principal inspector of factories, wrote to ITL. He referred to a recent visit to the premises and his meeting with Mr Stott to discuss the bulk storage of LPG. He listed twelve recommendations to bring the storage of LPG within current standards. The eighth recommendation was that when the supplier delivered LPG to the tank, ITL should have at least one employee present and that employee should have been trained in the procedures for filling, the hazards of LPG and the action to be taken in an emergency. The pursuer initially complied with this request. But Mr McColl later stopped the practice because it was taking people away from the workshop.

[19] Recommendation 10 referred to the pipework in the basement and suggested the improved sealing of a 'T' joint. The eleventh recommendation stated:

"Part of the underground pipework carrying LPG vapour into the building should be excavated. The state of the pipework and any corrosion protective coating should be examined by a competent person and any recommendations made as a result of this inspection should be carried out. A pressure test of the pipework should also be carried out."

[20] Mr Stott instructed Calor to advise him on an appropriate response to Mr Ives' recommendations. Unfortunately, Calor's proposals in response sought to water down recommendation 11, avoiding an exploratory excavation of the underground pipe, and the HSE acceded to those proposals. In particular, in a letter dated 4 January 1989 Mr Maurice Colville, Calor's senior group safety inspector (Scotland), stated:

"With regard to paragraph 11 of your letter, the condition of the attendant vapour offtake pipe would be ascertained, during vessel-exchange, by examination of the 'riser pipe' at the vessel, and by pressure-test on the pipeline."

[21] In the event, the pursuers failed to implement Mr Colville's proposals for the ventilation of the brick wall beside the LPG tank.

(v)  The pursuers' knowledge of the risk of explosion

[22] Mr Masterton accepted on cross-examination that the pursuers' senior management knew the characteristics of LPG which I summarised in paragraph [7] above. He was shown a memorandum from Mr McColl to him dated 18 February 2002 which asked him to carry out a risk assessment on his department as ITL's insurers had asked each department to carry out such assessments. His manuscript risk assessment of gas appliances and pipework identified gas leaks as the risk and recommended that regular checks be set up and that the equipment be serviced on a regular basis. An earlier ITL health and safety exercise in October 2001 identified the propane gas pipes as a potential hazard and listed "leakage and explosion" as the potential harm. It also stated that regular inspections were the existing measure for dealing with the risk.

[23] Mr Masterton said that the pursuers' senior management knew that they were responsible for the condition of the gas pipes under the yard and within the premises. He was not aware of any inspection of the pipes under the yard or within the premises except in the immediate vicinity of the ovens. He acknowledged that it was well known that underground pipes were subject to corrosion and that the condition of pipework should be monitored.

[24] I found Mr Masteron a straightforward witness and accept his evidence on these matters.

[25] Mr Alistair McNab, who was head of operations (Scotland) of the HSE and had as a regulatory inspector visited the premises in 1992, confirmed that at that time the pursuers' managing director, Mr Stott, was "well aware" of the hazards of LPG and the standards required of his companies. The pursuers had been alerted to the issue of the underground pipework by Mr Ives' letter and knew of the relevant guidance (HS(G) 34).

[26] Some of the pursuers' work involved spraying plastic covering on metal baskets to prevent corrosion. The senior management must have been aware of the risk of corrosion even if they did not have a detailed knowledge of the precise mechanism by which metal was degraded. More particularly, the managers must also have been aware of the risk of corrosion in underground pipelines. Mr Sylvester-Evans gave evidence, which I accept, that during a search after the explosion, searchers found a Department of Industry booklet, "Corrosion Protection for Buried Pipelines" on the premises which explained the causes of corrosion and the need for investigation and maintenance.

[27] There is to my mind no doubt that the senior managers of the pursuers had acquired sufficient knowledge of the risks posed by the underground pipe before JO began to supply LPG to the premises. They failed to apply their knowledge to the underground pipes. In his evidence to the ICL inquiry and in this court Mr Masterton said that the pipe in the basement and underground was overlooked in the risk assessments.

(vi)   The switch to JO and the "like for like" exchange

[28] After receiving their LPG from Calor for about 29 years, the pursuers decided to change their suppliers and entered into a contract with JO on 10 February 1998. At that time it was not JO's practice to inspect a commercial site when it took over the supply of gas from another reputable supplier as the needed infrastructure was already in place. On 25 March 1998 JO made a "like for like" exchange. This entailed a driver from Calor removing its tank and pipework from the yard and a driver employed by JO depositing its tank, pipework and first stage regulator in its place. JO engaged a gas engineering contractor, J G Inglis trading as I B Contracts, to make the exchange by disconnecting the Calor tank and connecting its replacement.

[29] Mr David Inglis, who was Mr John G Inglis' son and worked at that time in I B Contracts, carried out the exchange. Mr Inglis was a gas engineer accredited to work on LPG vessels and pipework and had periodically attended safety courses. He explained his procedures in his evidence. A driver would bring the JO tank on a lorry with a crane. The Calor tank would be moved aside and the JO tank put in its place. Mr Inglis connected the new tank to the customer's pipework. He then conducted a test on the visible pipework by spraying it with leak detector fluid before switching on the gas supply at the vapour off-take valve. On discovering no leaks, he carried out a pressure test. This involved switching off the vapour off-take valve and arranging for the customer to switch off all connected appliances. The customer would also switch off a valve further down the pipeline. Normally that valve was located at the outer wall of a building. As there was no such external valve at the premises, the customer switched off the valve at the LPG oven. Mr Inglis fitted a portable test gauge to the first stage regulator and opened the vapour off-take valve. He monitored the pressure in the pipe for about fifteen minutes and satisfied himself that the pipe was not leaking. Although it was not required by his training, Mr Inglis then carried out a further test on the visible pipework with leak detection fluid.

[30] Mr Inglis did not inquire about the age or condition of the pursuers' pipe. Nor did he give the pursuers any advice on its maintenance. He was not aware that the pipe travelled through the unventilated basement in the premises. He said that, if he had known of that, he would have recommended that the pipe be re-routed.

[31] On 29 November 1998 JO replaced the LPG tank on the premises with another one. Mr Inglis did not remember performing that job. But he did recall his involvement in the only other time, before the explosion, when JO interfered with the LPG pipe system on the premises. That was on 8 April 2002, when he changed the first stage regulator. After doing so, he carried out essentially the same safety tests, including the pressure test.

[32] Mr Alan Elliott, the managing director of JO, gave evidence that he was not aware that the pursuers' gas pipe entered the premises in a basement room. He said that if he had known, he would probably have written to the pursuers to recommend that they carry out a risk assessment.

[33] JO's only other involvement with the premises before the explosion was the periodic delivery of LPG to its tank in the yard. JO used certificated drivers, such as Mr Thomas Dudgeon who gave evidence. The drivers' task was simply to refill the tank. If having done so and having sealed the tank, they smelled gas, they would check the tank and the pipework connections with leak detection fluid. If they detected a problem at the tank they were directed to telephone JO's office for instructions. They did not otherwise interfere with the gas supply system.

(vii)    JO's contractual terms

[34] On 7 December 1999, Mr Alan Elliott of JO wrote to IPL to ask it to sign and return its customer supply agreement which HSE required each customer to have. He also enclosed the sketch map of the yard which IPL had drawn in earlier. Mr Elliott explained that it was a requirement that the agreement should place liability for insurance, maintenance and testing of the tank(s), regulators and pipework with the LPG supplier. Condition 3(c) of JO's general conditions achieved this as it stated:

"J Gas is responsible for insurance, maintenance and testing of tanks, regulators and pipework supplied."

The conditions provided that JO would continue to own all tanks, regulators and pipework which it supplied (clause 3(a)). In Clause 4(a) the customer undertook to take such safety precautions as JO considered desirable. Clause 6 entitled JO to cancel the contract and remove its equipment if the customer failed to observe any terms of the agreement. On 21 December 1999 IPL returned the signed contract and the plan.

(viii)       JO's response to the explosion

[35] It is no surprise that, after the tragedy, JO altered its procedures. Since about April 2006, JO, like other LPG suppliers, has sent customers copies of HSE guidance which sets out their responsibilities for their pipework and advises them to have their pipework tested. JO performs those tests for a fee. JO also drafted a pipeline risk assessment, using a standard risk assessment matrix. The assessment showed that old, unprotected buried pipework risked catastrophic consequences. It recommended in such circumstances a detailed inspection strategy with a high frequency. In response to questions by the Dean of Faculty, several witnesses, including Mr Inglis, Dr Cox, and Mr Betts of Calor, accepted that JO before the tragedy had all the information that was needed to create such a pipeline risk assessment. That was not disputed.

[36] JO also carry out site visits and surveys for every customer. If they find steel risers they advise customers to replace them. Mr Elliot explained that in so doing, JO went beyond normal practice in the LPG supply industry.

(ix) The guidance of the Liquid Petroleum Gas Industry Technical Association

[37] An important component of the pursuers' case against JO was that it failed to comply with the guidance of its technical association, the Liquid Petroleum Gas Industry Technical Association ("LPGITA"). Although the association has over the years had more than one change of name, I refer to it as the LPGITA for simplicity.

[38] In its code of practice 1 "Installation and maintenance of bulk LPG storage at consumers' premises" ("CoP1") dated 1986, the LPGITA sought to "set safety standards and requirements for the inspection and testing of bulk LPG storage plant at consumers' premises" (para 1.2.1). In section 2 of CoP1 the LPGITA suggested that a scheme of inspection, examination and tests be undertaken. In paragraph 2.2 it stated:

"LPG suppliers should ensure that users are aware of the importance of carrying out a scheme in accordance with this code. Suppliers to those consumers who cannot be expected to arrange this for themselves should make available such a service or direct them to other competent organisations."

Among the matters which it recommended should be covered in routine inspections was whether the external condition of visible pipework and equipment was satisfactory (page 9). It also recommended (in para 6.2) that underground pipes conveying vapour below 5 bar should be surveyed for leakage "at a frequency dictated by the risks associated with their location, pressure of operation and aggressiveness of their environment".

[39] In its code of practice 22, "LPG piping system - design and installation" ("CoP22") which it issued in 1990, the LPGITA made recommendations with which suppliers in the industry were familiar. Among them were recommendations that pipework should not be installed in an unventilated space, and that pipework passing through a wall should be sleeved and also sealed with a suitable building material (paras 2.1.3.7 and 2.1.3.9). The LPGITA made similar recommendations in its update of CoP22 in 2002.

[40] In 2000 the LPGITA issued a new edition of CoP1 in which it set out its recommendations for the examination and inspection of bulk LPG storage plant, including underground pipework. Significantly, it omitted the recommendation that suppliers should ensure that users were aware of the scheme (paragraph [38] above). The revised CoP1 stated (in para 2.2):

"Examinations described in this Code form the basis of an examination by a competent person in accordance with the written scheme of examination required under the PSSR."

The PSSR are the Pressure Systems Safety Regulations 2000 (SI 2000 no. 128).

[41] Mr Sylvester-Evans gave evidence, which I accept, that the reason the LPGITA removed the recommendation to advise the uninformed user was because the PSSR had clarified the demarcation of responsibility between the supplier and the customer and placed the obligation to have a scheme of inspection on the customer. He thought that commercial users were well aware of their obligations by then. He stated that there had been a prolonged period for the users to become aware of their statutory obligations, since the passing of the Pressure Systems and Transportable Gas Containers Regulations 1989 (SI 1989 no 2169), which imposed on the users the obligation to set up a scheme of periodic examination by 1 July 1994 (regs 8 and 9). By the late 1990s CoP1's recommendation to inform users had become otiose. It was therefore omitted from the 2000 version of CoP1. Mr Patrick Ardis, who was the managing director of Cambrian Gas Ltd and who had chaired a LPGITA working group which attempted to create a protocol for tank exchange in the early 1990s, suggested in his evidence that the change in the text of CoP1 had been to make clear the limits of the suppliers' responsibility.

(x)  Industry practice

[42] I have described JO's practice before the tragedy in my summary of the evidence of Mr Inglis (paragraphs [29] and [30] above). In a "like for like" exchange for a commercial customer, the tank was installed by an experienced fitter who carried out checks to satisfy himself that his work had not damaged the customer's gas pipes. The pressure test was usually confined to the pipe up to the safety valve outside the customer's building. JO drew a clear distinction in their contracts with commercial customers between the responsibility which they undertook for what they provided and the customer's responsibility for the pipework which belonged to it.

[43] Mr Elliott gave evidence at the ICL inquiry, which he confirmed in his evidence in this case, that if JO had undertaken responsibility for the safety of a customer's pipework, he would have asked where the pipework went, what it was made of and its age. The tests which JO and other suppliers carried out at that time, after installing a tank or a new regulator, were simply to ensure that they had not created any leaks when they interfered with their customer's gas supply systems.

[44] The pursuers led witnesses from Calor, Mr Henry Betts, Mr Robin Irons and Mr Kenneth Platt. Mr Betts has been employed by Calor since 1987 and is its national engineering standards manager. On one reading of Mr Betts' written witness statement he appeared to suggest that Calor did significantly more than JO to inspect a user's equipment on a "like for like" exchange. But on closer investigation on cross-examination a different picture emerged. Mr Betts gave evidence that Calor prepared a sketch drawing of the site showing the route of the pipework when it installed a tank. He also suggested that Calor would make inquiries if it observed that there was no Denso tape on a visible pipe or if it discovered that a pipe was under ground or passed through a basement. He also described Calor's current (post -tragedy) practices. He accepted on cross‑examination that the sales force manual to which he had referred did not apply to "like for like" exchanges. He also accepted that Calor's practices had changed markedly after Lord Gill's inquiry. Before the tragedy, the general approach of Calor, like other suppliers, was that the supplier was not responsible for the parts of the pipeline which it did not control. Mr Betts accepted that engineers such as Mr Kenneth Platt had direct experience of Calor's pre-2004 practices on "like for like" exchanges in commercial premises.

[45] Mr Irons was employed by Calor from 1966 until he retired in 2005. He worked on bulk gas sales from about 1980 and was a commercial manager from 1995. He described the various options for the installation of pipework at commercial premises which Calor undertook. From the mid-1980s Calor did not quote for installation of internal pipework. It concentrated on the supply of gas with the minimum of installation. From then, the options were to install pipework to the external wall of the building or "tank to base", from the tank, past the first stage regulator to a point just above ground level at the concrete base of the tank. The standard method of safety check was the pressure test. Calor sent commercial customers advisory leaflets on the PSSR to alert them as to their responsibilities under the regulations. He suggested in his written statement that, before the PSSR, a Calor representative would have asked a potential new customer about the route of its pipework, what the pipe was made of and its age. He also said that the representative would want to see the isolation valve. He stated that Calor would have insisted on the upgrading of the pipework at the premises if it had known that it passed through a basement. But he said on cross-examination that it was practice simply to pressure test the pipes on which a fitter had been working. It was not suggested that Calor's literature drew attention to the specific dangers that eventuated in this case.

[46] Mr Platt had been employed by Calor for 29 years as a gas fitter and eventually as a service engineer inspector. He gave evidence, confirming his evidence at Lord Gill's inquiry, that Calor's standard test on a "like for like" exchange was the pressure test. A fitter would not look at buried pipework or conduct visual examination of a commercial customer's internal pipework. He did not ask a customer about its installation. He would not report to Calor if he found a customer's internal pipe in a basement unless there was an appliance there or the pipe had a joint in it. He thought that a fitter would probably not make any inquiry if he observed that there was no Denso tape on a pipe above ground level.

[47] I am not persuaded that Calor's practices before 2004 were materially different from those of JO. Calor acted as the pursuers' supplier of LPG from 1969 to 1998 and did not alert them to any danger. Indeed, when the HSE pointed out the need to inspect the underground pipework in 1988, Calor persuaded it to accept a much less rigorous test. Calor's practice, like that of other suppliers, was to treat the commercial customer as being responsible for the pipeline in its ownership from vapour off-take valve, the first stage regulator, or the base below the first stage regulator.

[48] Mr Patrick Ardis, the managing director of Cambrian Gas Ltd ("Camgas"), gave evidence of his company's practice. It was not the practice of Camgas for a representative to attend site before a "like for like" exchange. Camgas did not take responsibility for pipework beyond the first stage or second stage regulator. The established test on installing a new tank was the pressure test to the customer's isolation valve. The fitter did not inquire about age or condition of the customer's pipe before making a like for like exchange. He would not worry about the absence of visible Denso tape wrapping on a pipe if the pipe passed the pressure test. Often the underground pipe was made of polyethylene. Mr Ardis's account was consistent with JO's practice and also with the behaviour of Calor's fitters before the tragedy.

[49] The evidence from the industrial witnesses was consistent with Mr Sylvester‑Evans' evidence, which I accept, about the practice of LPG suppliers before the tragedy. He spoke of the typical practice of delineating their responsibilities by contract and not taking on the responsibilities of the customers as users of LPG. Suppliers would provide technical advice if asked to do so. It was not a common practice to remind commercial customers about the need to inspect and maintain their pipes and LPG system if a customer did not request advice.

[50] Mr Alistair McNab of HSE (see paragraph [25] above) criticised the practice of the suppliers. He suggested that it was best custom and practice for a supplier to inquire about the age, protection and route of underground pipework and to advise a commercial customer to consider the state of such pipework. But he recognised, from the findings of Lord Gill's inquiry, that that was not what happened in practice in the LPG supply industry.

The case of common law negligence against JO

(a)  The pursuers' submissions

[51] The Dean of Faculty submitted that JO as a supplier of LPG owed a duty to take reasonable care for the safety of persons on or in the vicinity of the premises. He submitted that the duty extended to employees of the pursuers and other persons visiting the premises, and also people working in neighbouring facilities or simply passing by in the street. They were the persons potentially affected by the hazardous substance. In his closing submissions he argued that JO had specific duties:

(i)        To advise the pursuers that they needed to investigate the condition of the underground piping, including an exploratory excavation, and if necessary replace the pipework; and

(ii)      To satisfy itself about the age, condition and route of the pipework by assessing the risks to its employees and to third parties.

The pursuers also asserted in their written pleadings that JO owed a duty to alert the pursuers to the risk of service pipes which entered a building without a sleeve and with the hole in the wall unsealed, and which then passed through unventilated spaces. But the Dean of Faculty did not focus on that case in his closing submission.

[52] The Dean of Faculty relied on the tripartite test in Caparo v Dickman [1990] 2 AC 605, Lord Bridge at 617-618. In relation to the scope of the duty of care, including a duty to warn, he also referred to Donoghue v Stevenson 1932 SC (HL) 31, Lord Atkin at 45; Sutradhar v Natural Environmental Research Council [2006] 4 All ER 490, Lord Hoffmann at para 38; Wattlewood v Goodwood Road Racing Co Ltd [2004] PIQR P 25, Davis J at para 122; and Mitchell v Glasgow City Council 2007 SC (HL) 21, Lord Hope at paras 25 and 26.

[53] In relation to the duty of care on suppliers of hazardous products he referred to Dominion Natural Gas Co Ltd v Collins [1909] AC 640, Lord Dunedin at 646 and Read v J Lyons & Co Ltd [1947] AC 156, Lord MacMillan at 172 and 174. In support of the proposition that a widely used trade or industrial practice did not determine the existence or scope of a duty to take reasonable care he referred to Cavanagh v Ulster Weaving Co Ltd [1960] AC 145, Lord Keith at 166, Watson v British Boxing Board of Control Ltd [2001] QB 1134, Lord Phillips at para 111 and Baker v Quantum Clothing Group Ltd [2011] 1 WLR 1103, Lord Mance at paras 9-10 and Lord Dyson at para 101.

[54] The Dean of Faculty urged me not to consider the question of the scope of the duty of care of a person, who supplied a hazardous substance, with the knowledge that the pursuers or their insurers had had the means to pay compensation to the injured parties. He invited me to test the case on the hypothesis that a hypothetical person in the shoes of the pursuers had been insolvent and had not had, or had insufficient, public liability insurance. In a question with third parties visiting the premises or passers by the delimitation of responsibility for safety between the supplier and the commercial customer, whether by contract or industrial practice, was of no consequence.

(b)  JO's response

[55] In arguing that the scope of JO's duty of care did not extend to those duties, Mr Gray discussed Caparo, Mitchell and Sutradhar (above) and also referred me to Charlesworth & Percy on Negligence (12^th ed.) para 2.63 and Marc Rich & Co AG v Bishop Rock Marine Co Ltd [1996] 1 AC 211, Lord Steyn at 236. He submitted that the circumstances of this case did not fall within, and were not analogous to, the distinct and recognisable situations in which the courts have imposed a duty of care. He accepted that it was reasonably foreseeable that pipework could corrode and that if LPG escaped it could cause an explosion. This was known to the pursuers as well as JO. But there was not sufficient proximity between JO and the injured parties, including Mr Lindsay, as JO did not have sufficient control over or responsibility for the underground pipe. It was not fair, just and reasonable that the pleaded duties should be imposed on JO whom the pursuers had not engaged as an adviser and on whom they did not rely in relation to their own duties to take care for the health and safety of persons in and in the vicinity of their premises. JO had not actually assumed a responsibility to advise the pursuers and the law did not impose such a responsibility on it.

[56] He submitted that the law did not as a general rule impose an obligation on a professional to give unsolicited advice. While a duty might arise to give advice to an ignorant and inexperienced client, there was no such duty to a client who had knowledge and experience in the relevant field (Carradine v D J Freeman & Co (firm) [1999] WL 651194). Mr Gray also submitted that industry practice at the time achieved a clear delineation of responsibility between the supplier of LPG and the commercial customer. The court should be slow to impose further and different delictual duties (Tai Hing v Lui Chong Hing Bank [1986]1 AC 80, at 107).

(c) Discussion

[57] The central issue in this case is the scope of JO's duty of care to the injured parties including Mr Lindsay. There is no real issue on foreseeability; if the pursuers did not carry out their duties and allowed their pipework to corrode and to leak, JO could reasonably foresee that persons, such as the injured parties, might suffer fatal or very serious injury. The area of dispute is essentially the overlapping concepts of proximity and whether it is fair, just and reasonable for the law to impose liability on the supplier.

[58] Foreseeability is not in issue because the LPG supply industry were aware of

(a) the danger of corrosion in unprotected underground pipes, (b) the need to sleeve a pipe where it enters a building and seal the hole if the pipe outside a building is below ground and (c) the danger of installing service pipes in unventilated spaces, such as basements. JO had expertise in this area. It knew or should have known the advice in the Codes of Practice of the LPGITA.

[59] But I am not persuaded that there was the needed proximity between JO and the injured parties for a duty of care to arise. I have reached this view for the following six reasons.

[60] First, the pursuers knew of the risks of corrosion of pipes, the escape of LPG, and explosion. All three pursuers accept that they failed in their duty of care to the injured parties. The failure occurred in pipework which IPL owned and which it and the other pursuers had a duty to maintain. The pursuers had duties under sections 2 and 3 of the Health and Safety at Work Act 1974 ("the 1974 Act") and under regulation 3 of the Management of Health and Safety at Work Regulations 1992 and 1998. They had a duty to carry out a suitable and sufficient assessment of risks. Their senior management were aware of their general duties but failed to pay adequate attention to the LPG pipework. They were under an obligation to engage a competent person to assist them to perform those duties if they did not have the needed expertise within their organisation to carry out such assessments. It was their duty to take reasonable care to inspect and maintain the LPG pipework. ITL and IPL pleaded guilty to offences under the 1974 Act.

[61] Dr Cox accepted Lord Gill's finding in relation to a future safety regime that:

"The primary responsibility for the safety of the LPG pipework should rest with the user of the installation. It is he who brings a hazardous substance onto the site. It is he who has the means at hand to inspect and maintain the pipework. The user cannot ... rely on the oversight of the HSE or on the expertise of the supplier to absolve him of that responsibility."

(The ICL Inquiry Report p 134)

I agree and hold that that is the position under the common law as it existed in 2004. In fairness, the pursuers did not argue otherwise. But the existence of that primary responsibility is very material to the question of proximity between JO and the injured parties.

[62] Secondly, I have regard to the practice of the LPG supply industry which was to confine its service and the responsibility which it undertook to the equipment which it provided. That was usually the tank and the pipework up to the first stage regulator. The supply industry confined its testing of the commercial customer's pipework to the use of leak detection fluid on visible pipework on the riser and the pressure test which I described in paragraphs [9] and [29] above. Those tests were designed to satisfy the supplier that its interference with the gas supply system, as when installing a new LPG tank, had not compromised the integrity of its customer's pipework. I accept that industry practice is not determinative of the scope of a duty of care. There was evidence of other explosions in the UK caused by leakage from mains gas service pipes as well as an explosion at Daventry caused by propane gas escaping from a corroded underground pipe. But the Daventry incident was not well known in the industry. An explosion caused by the escape of gas from an underground LPG pipe was and is, fortunately, a very rare event.

[63] Thirdly, I see force in Mr Gray's submission that there was an advantage to the supplier, the customer and potentially affected parties for there to be a clear demarcation of responsibility for particular parts of the LPG pipework. The supplier and customer would each know what it had to do. It is in my view significant that the LPGITA altered CoP1 in 2000 to reflect the clarity which the PSSR brought to the location of responsibility for a customer's pipework. I accept Mr Sylvester-Evans' evidence that it is consistent with good health and safety practice for there to be a clear delineation of responsibility at interfaces between equipment which different people control.

[64] Fourthly, the pursuers did not seek JO's advice on the condition of their pipework or rely on JO's agreement to supply LPG as an indicator that all was well.

[65] Fifthly, JO's fitters did not know that the pipework entered the unventilated basement. If that information had been available Mr Alan Elliott would have advised the pursuers to carry out a risk assessment. JO's fitters were aware of an underground pipe of indeterminate age and condition. There was no evidence that the visible part of the pipe was corroded and the absence of Denso tape from that part of the pipe was not indicative of a problem underground because the underground pipe might have been so taped or might have been made of polyethylene. The pursuers' pipework passed the leak detection and pressure tests. The involvement of JO began in the context of a "like for like" exchange which followed the apparently uneventful supply of LPG to the premises by Calor.

[66] Sixthly, I consider that it is also relevant to take into account the duty on the pursuers to have third party insurance. I do not accept the invitation of the Dean of Faculty to assess the circumstances on the basis that the pursuers might have breached their duty to have such insurance in place. In the normal run of events, therefore, an injured party would be able to obtain financial compensation from the commercial customer or its insurers.

[67] In Donoghue v Stevenson Lord Atkin famously emphasised the concept of direct effect in his definition of proximity. He spoke (at p 45) of

"such close and direct relations that the act complained of directly affects a person whom the person alleged to be bound to take care would know would be directly affected by his act."

I do not see such direct effect in this case, where it was the pursuers' failures of duty when they had the knowledge to perform those duties that directly caused the tragedy. Further, in Sutradhar Lord Hoffmann spoke (at para 38) of the need for the person on whom a duty of care was imposed to have "a measure of control and responsibility for the potentially dangerous situation" and for "a proximate relationship with the source of the danger". JO was simply the supplier of LPG. Its fitters were on the premises only on the three occasions to which I referred in paragraphs [28] and [31] above. Its drivers who periodically refilled the tank had no wider role than to do so in the absence of patent dangers.

[68] Turning to the related question of whether it would be fair, just and reasonable to impose delictual liability on JO, I am satisfied that it would not. It was not disputed that JO owed a duty of care to those in the vicinity of the gas tank when it delivered LPG or altered the equipment. Further, Mr Alan Elliott accepted, correctly in my view, that JO would owe a duty not to supply LPG to premises if he was aware that the pipe was open-ended and the gas would inevitably escape. That was an understandable and responsible stance in the face of a hypothesis of patent danger. The Dean of Faculty eloquently urged me to take the "small step" from acknowledging JO's obvious duty in the face of patent danger to recognise its duty to make straightforward inquiries when it was unaware of the age, route or condition of the pipe. I do not consider that to be a small step in law because of the absence of proximity for the reasons which I have given.

[69] I therefore conclude that JO did not owe the duties of care to the injured parties on which the pursuers have built their case.

[70] That is sufficient to determine the case. But I comment briefly on the separate issue of causation.

[71] In relation to the case of failure to give advice, I am not persuaded that Mr Stott who was responsible for health and safety until 2000, would have taken advice and carried out an exploratory excavation of the underground pipe. He was reluctant to spend money on such matters. Mr McColl, who was responsible for health and safety after 2000, achieved a higher standard of safety in the premises. But the evidence does not suggest that he addressed the known dangers of LPG. The pursuers took no steps to monitor, inspect and maintain the underground pipeline after they received a clear warning from the HSE in 1989. Mr McColl also chose to ignore the HSE recommendation to have a trained employee present at the LPG tank during deliveries of LPG. I am not persuaded that the pursuers have established that, if JO advised them in 1998 or in 2002 to investigate the state of the underground pipe, they would have acted in a way which would have averted the tragedy.

[72] There is also a question of causation in relation to the alleged duty on JO to inquire into the age and condition of the pipe and to refuse to supply LPG unless the pipe was investigated and rendered safe. If JO had discovered that the pipe might be unsafe and had refused to supply LPG, it is probable that another supplier would have provided the gas in the context of the competitive market that existed in 2004. It is possible that, as Mr Inglis suggested in his evidence, JO would have laid a new pipe in order to win the pursuers' business. But the pursuers would still have had to incur expense in digging up the pipe in the yard and re-routing the pipework within their premises. I am not persuaded on the evidence that the pursuers would have done so unless they were convinced of an imminent danger or were unable to obtain LPG from another supplier.

[73] Accordingly, if the pursuers had succeeded in establishing a breach of a duty of care, their claim would have failed on causation.

Comment on use of expert evidence

[74] I am grateful to Dr Cox and Mr Sylvester-Evans for their detailed reports and careful evidence. Both had ample relevant experience. Dr Cox has extensive experience as a consulting engineer in the fields of industrial and public safety and has advised on several significant gas explosions. Mr Sylvester-Evans is a consulting engineer with expertise in process and safety engineering, safety management and hazard and risk assessment. He previously advised Calor on LPG bulk storage in the domestic sector. He was retained as an independent expert by the Crown in the prosecution of the pursuers and by the ICL inquiry. I have had regard to their evidence on the causes of leakage from metal pipes, the gas supply industry's knowledge of risk and its practice from time to time and on the changes to the regulatory regime which I have found to be very helpful. I have been assisted by their careful reports which set out coherently the sequence of events and the context in which they occurred. But I have not relied on Dr Cox's evidence on the duties of the parties, which he offered "from an engineering and safety perspective". Nor have I taken into account the evidence of Mr Sylvester-Evans where he opined on the duties of the parties "from a technical viewpoint". In each case, notwithstanding his characterisation of perspective or viewpoint, the skilled witness strayed into giving his opinion on the legal duties of the parties.

[75] Dr Cox's views on the duties of suppliers of LPG to commercial customers assumed that the customer was not aware of the risks of LPG and of buried pipelines. That was not so in this case. The pursuers had the knowledge but did not act on it.

Counsel's presentation of the case

[76] I wish to acknowledge the skill with which counsel presented their cases. Their efficient use of written witness statements, their selection of the evidence which was needed to allow the court to determine the dispute, and their careful written submissions have greatly assisted me in performing my task.

Conclusion

[77] I therefore sustain the second and third pleas in law for the defender, repel the pleas in law for the pursuers and pronounce decree of absolvitor. I will have the case put out by order before one of my colleagues to deal with the question of expenses.