• In the case of Hobbs Farms Ltd v Baxenden Chemical Co [1992] 1 Lloyd’s Rep. 54, it was held that the manufacturer of defective goods has a duty to warn its customers of the defects, even when the defects only come to light after the goods have been sold.

Facts of the Case

  • D manufactured foam insulation and provided technical trade information to suppliers that it was ‘self-extinguishing.’
  • C, a farmer, rented out a hanger located just a few feet from their barn to a tenant (C2). This hangar had been fitted with D’s foam by a contractor.
  • The contractor relied on D’s information to assert that the foam would not be flammable when installing the foam between 1977 and 1980. However, by 1974, D had knowledge that this information was inaccurate.
  • When an employee in the barn was using a grinding machine, a spark fell on flammable material that the employee had negligently failed to move.
  • The fire spread to the hangar and the foam proved to be highly flammable. The entire hangar was engulfed in flames.
  • In response to C2 suing for negligence and under Rylands v Fletcher, C sued D on the grounds for negligent misinformation and breach of warranty.

Issues

  • Was D liable for negligent misstatement if they only became aware of the defect after the foam had been sold?
  • Was C liable to C2 for the spread of the fire despite being misled as to the highly flammable nature of the foam?

Held by the Queen’s Bench Division

  • Finding for C, that describing the foam as self-extinguishing was inaccurate and misleading. It was foreseeable to D that statements made to contractors would be passed onto customers who could suffer loss by relying on such statements.
  • Since D realised that failing to warn past customers like C might result in them suffering injury, D’s duty of care extended to taking reasonable steps to warn them.
  • D was therefore liable to C, but C was contributorily negligent due to their employee’s carelessness in using the grinding machine.
  • Finding for C2, that C’s employee had acted negligently by not moving the flammable material before using the grinding machine. Even if C believed the foam would mitigate the damage, the risk of fire should have been avoided entirely.
  • C’s negligence had led to the fire escaping from C’s barn to the hanger. As such C was liable under both negligence and the Rylands v Fletcher rule.

Sir Michael Ogden QC

  • “A manufacturer’s duty of care does end when the goods are sold. A manufacturer, who realises that omitting to warn past customers about something might result in injury to them, must take reasonable steps to attempt to warn them, however lacking in negligence he may have been at the time the goods were sold” [65].
  • The Fire Prevention (Metropolis) Act 1774 s86 states that no action can be laid against a person where a fire begins accidentally. However, this exception does not apply to C. Their employee was negligent in not acknowledging the risk that the flammable material would allow fire to spread out of the barn and moving the material accordingly. Damage being accidental is no defence for negligence.
  • Furthermore, since the fire spread from C’s barn to the hangar, which was occupied by C2 at the time, it moved from an area under C’s control to one where they did not have control. As such, it represents an escape of an inherently dangerous thing under the Rylands v Fletcher rule.

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