Sean O'Hare
THE INSURANCE policy taken out by Tesco did not cover the supermarket for the collapse of the Gerrards Cross Tunnel, a judge has ruled at a preliminary issues hearing.
At The Commercial Court in The Strand, Mr Justice Field ruled that Tesco, not its public liability insurers, was responsible for compensating Chiltern Railway Company Ltd following the 1995 tunnel collapse and the subsequent 51-day railway line closure.
Considering Tesco already agreed a "mutually acceptable settlement with Chiltern" back in June, the purpose of the ongoing case against their own insurers, D A Constable, New Line Corporate and Ace Insurers, is to decide who actually foots the 'settlement' bill. On the basis of the preliminary issues hearing held at the end of July, Tesco currently look the most likely. Both parties have said the settlement amount is confidential, but it is believed to amount to millions of pounds.
During the hearing, it came to light that the policy taken out by Tesco before the project began offered to pay damages to Chiltern in respect of, among other things, damage to material property and obstruction, loss of amenities, trespass, nuisance and any like cause.
Due to the fact that the infrastructure and railway lines were owned by Network Rail, it was agreed that no material property belonging to Chiltern was lost or damaged.
Having reviewed the relevant authorities, Mr Justice Field affirmed that public liability policies were generally regarded as not affording cover against pure economic loss, as was the case with the 51-day closure of the station.
A spokesman for Davies Lavery, the solicitors acting on behalf of the public liability insurers, said: "This robust decision by the court should be welcomed by insurers. The essential purpose of such policies is to provide an indemnity in respect of certain types of tortious liability. Such liability normally only arises where there has been damage to property belonging to the claimant. This was not the case here.
"The judge's refusal to divorce the law of tort from the scope of public liability cover serves to remove any doubt or