No.4 - Overseas Tankship (UK) Ltd v Morts Dock and Engineering Co Ltd – “The Wagon Mound”

Ten cases every consulting engineer should know

Overseas Tankship (UK) Ltd v Morts Dock and Engineering Co Ltd – “The Wagon Mound” [1961] AC 388

In summary

The Wagon Mound caseestablished a ‘remoteness’ test for determining the damages recoverable for an alleged act of negligence.

Facts:

Due to negligence on the defendant’s part large quantities of furnace oil from a ship escaped into a harbour. The oil spread over the water to a wharf which was some 600 feet away and was owned by the claimant. 

The claimant was carrying out work to a ship at the wharf which involved the welding of metal. Molten metal from the wharf fell onto cotton waste which was floating on the water and thereby came into contact with the oil.  The cotton waste acted as a wick and ignited the oil, and the wharf sustained substantial damage when the fire quickly spread.  

The court held that: 

The defendants did not know, nor could they reasonably have been expected to know, that there was a risk of the furnace oil being set alight when floating on the water. 

Liability for the damage caused by the fire depended on the forseeability of that damage.  The court found that a reasonable person would not, on the facts of this case, have foreseen such damage, and therefore the defendant was not liable in negligence for that damage, notwithstanding that the damage had in fact been caused by its carelessness. 

As such, the defendant was not liable to compensate the claimant for damage to the wharf arising out of the fire.

Damages for negligence are only recoverable if the particular damage in question could have been foreseen by a reasonable person. It isn’t enough that the damage was a direct consequence of the negligent act.  The type of damage must therefore be reasonably foreseeable in order for damages to be recoverable in negligence.