Why it is vital for employers to have consistent reporting lines

20 October, 2016

When considering health and safety issues, employers shoulEmployment - workerd remind their employees to report any issues as soon as possible to avoid the issues highlighted by the case of Howmet Ltd v Economy Devices Ltd and others [2016] EWCA Civ 847.

What happened? 

In this case, Economy Devices manufactured what turned out to be defective thermolevel sensors. These were used to measure the temperature and level of liquid tanks in order to prevent a fire breaking out when metal castings were being dipped into hot acid and water. Howmet installed the thermolevel sensors at their factory in 2006.

In December 2006 and January 2007, there were two separate fires at Howmet’s factory. These were investigated and the cause was found to have been Economy Devices’ thermolevels. These had not switched off the heater at the relevant temperature and had caused the fire.

Howmet then ordered a new device to replace the defective thermolevels but, crucially, did not stop using the old thermolevels until the new one was installed. In this interim period, there were informal manual checks of the process by Howmet staff but this was not done consistently and, in February 2007, a fire broke out whilst no one was checking the levels. This caused £20m worth of damage. Howmet proceeded to bring claims against Economy Devices under the Consumer Protection Act and for negligence.

What was the issue? 

Because the facilities managers and plant engineering technicians were aware of the potential for the fire and had continued to use the defective product, the High Court decided that Howmet was relying on its own staff to ensure no fire broke out rather than the product from Economy Devices. This meant that even though Economy Devices’ product was defective and did not comply with health and safety legislation, it was deemed to be Howmet’s failure to properly review their equipment that caused the fire.

Howmet appealed this decision because they felt that the staff members who were reviewing the equipment were too junior for their knowledge to have been attributable to Howmet. The Court of Appeal found that the task of maintaining and assessing the thermolevels was delegated to a sufficient number of people within the organisation.

What can employers learn from this? 

When considering health and safety matters, it is essential that reporting lines are clear and that those who have been delegated responsibilities are aware that they must report any problems to the party who can correct those issues. This may be done by having regular review meetings, having a clear health and safety at work policy and by making the obligation to report part of an employee’s contract.

If this is not done and the company continues to use a product that someone in the company knows to be defective, any claim in negligence against the manufacturer will, at best, be reduced for the company’s failure to have the defect fixed but, at worst, will result in the claim failing completely.