Last edited 18 Nov 2020

Pirelli General Cable Works Ltd v Oscar Faber & Partners

The case of Pirelli General Cable Works Ltd v Oscar Faber & Partners [1983] has been used as precedent for the limitation period applicable to claims of negligent design.

Damage to a factory arose out of the use of a material in constructing a factory chimney that was unsuitable for the purpose. The chimney had been built in 1969 but the faulty condition of the chimney could not have been discovered with reasonable diligence until 1972 and was not in fact discovered until 1977. A writ was issued in 1978. The question was whether the six year period ran from the date the faulty chimney was built or from the date when the fault could have been or was discovered.

The House of Lords held that the owner of a building had a legitimate cause of action against the consulting engineer for a negligent design at the point at which physical damage to the building first occurred.

The subsequent case of Abbott v Will Gannon & Smith Ltd [2005] challenged the Pirelli law at the Court of Appeal on the basis that the case of Murphy v Brentwood DC [1991] decided that the cause of action accrued, not when physical damage first occurred but when the building owner suffered economic loss.

The Court held that the Murphy decision had not expressly or impliedly overruled the Pirelli decision. It held that if the claimant’s cause of action accrued at the time they suffered economic loss, then the loss only occurred when it became apparent in some way which would affect the building’s value. Therefore, they rejected the argument that economic loss was suffered when negligent works were completed.

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