Defendant insurers have won a preliminary battle against Tesco in its £155m legal battle, relating to the Gerrard’s Cross tunnel collapse.
The court narrowed the scope for Tesco to claim back money it paid out to the Chiltern Railways following the collapse of the tunnel in 2005.
In a preliminary hearing, the court held that the insurers’ public liability cover responded only to liability in tort and coextensive liability in contract. Because damage had been caused to Network Rail’s property rather than Chiltern’s property, this meant that no tort had been committed, as Network Rail was a third party.
The ruling means Tesco must now pursue its case based only on contract law.
Tesco was enclosing a railway line in a tunnel in order to build a supermarket on top, when the tunnel collapsed, causing 51 days of business interruption to Chiltern.
The retail giant paid compensation to Chiltern and attempted to claim back the money from insurers Ace, AIG, DA Constable, Abacus and Newline, under a public liability clause in its insurance contract.
Nick Rouse, associate for law firm Davies Lavery, which represented the insurers, said: “The judge’s refusal to divorce the law of tort from the scope of public liability cover serves to remove any doubt or ambiguity about the ambit of this type of cover.
“The judge is to be commended for resisting the temptation to drop public liability cover into the murky waters of private, contractual relationships.”