It is quicker, cheaper and easier to learn from the mistakes of others, than to make you own.
After a hot oil popcorn factory burnt down, the courts reviewed the risk analysis that the designers/installers and owners carried out when contracting for a fire suppression system. They were not impressed!
The court called the idea that the owner “might be over-spending, by installing a system costing a few thousand pounds, in order to protect building and equipment now said to be worth £110 million” unfathomable. The court said this idea “betrays an absence of understanding of what the fire risks really were, and restates the false cost=significance proposition.”
Time to learn the lessons from this case (Trebor v ADT).
What should you do?
The court suggested that in future the parties should:
- Assess and appreciate the risk of each project separately: in this case, the buyer “never fully appreciated the increased risk” that the project would bring.
- Assess “the risks before the project workscope was defined.”
- Avoid preparing “a specification based on a ‘minimum spend'” which decision could be exacerbated by “a refusal to consider any recommendation which might add to the workscope, even if [it] provided the only way of truly controlling the risk.”
- Never assume that what worked on a previous project will work on the new one.
- Ascertain and then discuss any risks which occurred on similar projects, especially to the designer of a system intended to protect against or minimise the consequences of similar risk events. Your designer needs to appreciate all significant risks.
- Carry out a proper technical appraisal of the risks, ideally in conjunction with the supplier of relevant risk protection equipment.
- Identify precisely the risks and hazards on each project “and/or how those risks could be best dealt with.”
- Make sure one person within your organisation ‘owns the risk.’ Often this is the project manager who is responsible for “recognising and then minimising all the risks created by that project.”
- Check all assumptions made for significant risk factors (i.e. those with potentially catastrophic consequences). “This erroneous assumption gave rise to the conclusion that there was no health and safety issue; it follows that, if the [buyers] had bothered to check the as-built drawings, they would have seen that the assumption was wrong, and that therefore there was a major health and safety issue.” In this case “A critical assumption about the existence of fire segregation turned out to be entirely misplaced”
- Take advice from risk professionals, but make sure their advice is based on evidence and not assumptions.
- Ensure all recommendations from risk managers are properly followed through: “one significant recommendation made by the [buyer’s own risk managers]…was not followed” and that none are ignored.
- Where the best option to protect against a risk event is not adopted, ensure that the alternative means of protecting against risk events are adopted.
- Keep records of meetings with Fire Officers.
- Not “decide what to do and then assess the risk” but the other way round.
- Not determine the significance of risks on the “value of the proposed works“ but on “the value of the building and equipment at risk if those works were not properly specified and designed.”
- Not assume that Certification by the Fire Brigade is sufficient to establish risks have been managed and the process is not hazardous, such as “an industrial process involving naked flames.”
Case: Trebor Bassett Holdings Ltd & Anor v ADT Fire and Security Plc [2011] EWHC 1936 (TCC) and Appeal [2012] EWCA Civ 249
