United Kingdom
Marine Pollution, Contract, Liability, Property, Damages
A ship called “Sea Empress” grounded in the sea around Wales in 1996, leading to the escape of some 72,000 tonnes of crude oil into the sea. There followed a fishing ban over several months in the area based on dangers to human health by consumption of fish deriving from the polluted sea. The prohibited area included whelk fisheries. The appellant had a business which included the processing of whelks some 200 miles from the site of the accident. Processing involved removal of the shells and packing in tins, which were in turn packaged in boxes for export. The appellant had a long term contract for the supply of Welsh whelks to a Korean buyer. The appellant had also contracted with 8 fishing vessels to take such whelks, but the ban brought an immediate end to the catching of Welsh whelks, and destroyed the appellant’s business with its Korean buyers. The appellant thus suffered loss of profits. The Court examined the possibility of liability of the owner of the ship under the Merchant Shipping Act 1995. It referred to a decision by the House of Lords holding that such liability was not unlimited. The claims were localized and confined to the area of the contamination. The House of Lords had concluded that while claims for economic loss could not be excluded per se, the statutory liabilities on which they were founded were not indeterminate in extent. The Court of Appeal quoted the general attitude of the common law that in order to enable a person to claim in negligence for loss caused to him by reason of loss of or damage to property, he must have had either the legal ownership of or a possessory title to the property concerned at the time when the loss or damage occurred, and it is not enough for him to have only had contractual rights in relation to such property which have been adversely affected by the loss of or damage to it. The appellant acknowledged that the statute could not cover all economic loss resulting from contamination, but submitted that the present case was to be distinguished from the House of Lords’ case by virtue of the close physical association between the contamination and the appellant’s loss. The Court was emphasized that the appellant was not engaged in any local activity in the physical area of the contamination. Its interest was in landed whelks, not in the whelks in their natural habitat. The contamination had prevented local fishermen, whose physical activities were closely affected by the contamination of the waters and of whelks, from supplying the appellant with the landed whelks for which it had contracted. The appellant’s resulting loss arose from its inability to carry out processing and deliveries of whelks at points far away from the contaminated areas. This was a form of secondary economic loss, which was outside the intended scope of a statute which was closely focused on physical contamination and its consequences. The appeal was dismissed.