European & International Investments Inc v McLaren Building Services Ltd & Anor [2001] ScotCS 67 (21 March 2001)

European & International Investments Inc v McLaren Building Services Ltd & Anor [2001] ScotCS 67 (21 March 2001)

Clause 8.3B of the Scottish Minor Works Contract does not require the employer to insure against the consequences of the contractor's negligence, nor does it exclude the contractor's liability for negligence under clause 8.2. The provisions for joint names insurance do not, in themselves or in combination with other factors, import that the cover must extend to the contractor's negligence. The contractor remains liable for its own negligence unless expressly excluded.

Citation
[2001] ScotCS 67
Parties
Pursuer: European and International Investments Inc; First Defender: McLaren Building Services Limited; Second Defender: Another (Second Defender)
Jurisdiction
Scotland
Judgment Date
21 March 2001
Procedural Posture
Civil (reparation/contract) / Procedure Roll Discussion (interlocutory)
Outcome
Proof before answer allowed; no dismissal of action against first defenders at this stage.
Legal Topics
Interpretation of Standard Form Building Contracts, Joint Names Insurance, Contractual Indemnity, Negligence, Allocation of Risk in Construction Contracts
Contract Law Construction Law Insurance Law Interpretation of Standard Form Building Contracts Joint Names Insurance Contractual Indemnity Negligence Allocation of Risk in Construction Contracts

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Parties

European and International Investments Inc

Pursuer

McLaren Building Services Limited

First Defender

Another (Second Defender)

Second Defender

Procedural Posture

Civil (reparation/contract) / Procedure Roll Discussion (interlocutory)

Legal Issues

  1. 1 Whether clause 8.3B of the Scottish Minor Works Contract requires the employer to insure against loss or damage caused by the contractor's negligence, thereby precluding the employer's right to recover from the contractor for such loss.
  2. 2 Whether the existence of joint names insurance under the contract excludes the contractor's liability for negligence under clause 8.2.

Ratio Decidendi

Clause 8.3B of the Scottish Minor Works Contract does not require the employer to insure against the consequences of the contractor's negligence, nor does it exclude the contractor's liability for negligence under clause 8.2. The provisions for joint names insurance do not, in themselves or in combination with other factors, import that the cover must extend to the contractor's negligence. The contractor remains liable for its own negligence unless expressly excluded.

Court Disposition

Proof before answer allowed; no dismissal of action against first defenders at this stage.

Orders

  • All parties allowed a proof before answer of their respective averments on record.