Jeffery Onions QC and Alexander Polley acted for Network Rail Infrastructure Limited, in appeals brought by Conarken Group and Farrell Transport against the judgment of Akenhead J [2010] EWHC 1852 (TCC) in favour of Network Rail at first instance. The Court of Appeal (Pill, Moore-Bick and Jackson LJJ) unanimously dismissed the appeals.
The claims arose out of so-called ‘bridge strikes’ in which drivers of vehicles collided with parts of the rail network infrastructure owned by Network Rail causing physical damage to the infrastructure. The appellants disputed on appeal Network Rail’s claim for financial loss under contracts (“track access agreements”) it had made with train operating companies, by which Network Rail made the network available to them in return for payments. Under the TAAs, if the unavailability of the infrastructure causes delays to trains, the periodic payments due to Network Rail are reduced according to formulae that reflect the rail industry’s best estimate of lost future revenue for the TOCs as a result of passengers’ dissatisfaction attributable to the incident in question.
The appeal raised issues as to the extent to which financial loss consequent on physical damage (and in particular the sums that an innocent party becomes liable to pay third parties under contracts relating to the use of the property damaged) is recoverable on the basis of the principle in cases such as SCM v Whittall [1971] 1 QB 337 and Spartan Steel v Martin [1973] 1 QB 27.
The appellants contended, amongst other things, that the sums claimed were irrecoverable in the tort of negligence either because they were not sufficiently connected with the damage to Network Rail’s property, and therefore amounted to pure economic loss; or because they were too remote; or because they were not reasonable as between claimant and defendant in all the circumstances. They contended in particular that the loss claimed was irrecoverable because loss of future business cannot be claimed in negligence.
The Court of Appeal rejected these submissions and held that the loss Network Rail claimed, which was a reasonable pre-estimate of its liabilities to the TOCs, was recoverable.
Jeffery Onions QC and Alex Polley were instructed by Hay & Kilner Solicitors.