Marc Rich v Bishop Rock

Legal Case Summary

Marc Rich & Co v Bishop Rock Marine Co Ltd [1996] AC 211

The requirements for the existence of a duty of care

Facts

During a voyage a ship developed a crack in its hull. The ships owners requested its classification society to inspect the damage. An employee of the classification society advised that the ship should be put into dry dock in order for repairs to be carried out. However, after complaints from the ship owner as to the cost of such an action, the advice was altered and temporary repairs were carried out. Shortly afterwards, the ship sank and the claimant lost cargo valued at USD 17.6 million. The claimant recovered USD 17.5 million from the ship owner being the total extent of the liability in relation to the tonnage of the ship. The claimant sought to recover the difference from the classification society. The claim succeeded at first instance, but was overturned on appeal. The Claimant appealed to the House of Lords.

Issue

Whether, on these facts, the elements necessary to impose a duty of care on the classification society were made out.

Decision / Outcome

It was held that a duty of care did not exist to the claimant by the classification society. The House of Lords reiterated the three elements necessary for the imposition of a duty of care set out in Caparo Industries plc v Dickman [1990] 2 AC 605: proximity of relationship, foreseeability of damage and it being fair, just and reasonable to impose a duty. It was held that the first two elements of the test were satisfied on these facts. However, it was held that it would be unfair, unjust and unreasonable to place a duty of care on a classification society as against a ship owner, it being the ship owner who would ordinarily be required to recover in circumstances such as this, because this went against the internationally recognised contractual structure that existed in this area. It would also be unfair, unjust and unreasonable to hold the classification society liable as against the cargo owner because classification societies act for collective welfare and could not rely on any limitation provisions.