You are a claims handler for an insurer. One of the insurer's policyholders XYZ Ltd, is a wholesale firework
distributor. XYZ Ltd has a public liability insurance policy with an excess of £5,000.
XYZ Ltd have stored all its fireworks in the same industrial premises for over 20 years. Recently a small
residential housing estate has been built close by the industrial premises.
Richard who owns a property on the housing estate that is closest to the industrial premises, has made a
complaint to XYZ Ltd. The complaint related to the noise, dust and traffic caused by its company motor
vehicles.
Residents of the housing estate have also complained to XYZ Ltd about its vehicles regularly blocking
access to their homes.
A sub-contractor carried out maintenance work on the roof of the industrial premises. During the
maintenance work a fire broke out, resulting in a number of explosions. These explosions caused extensive
damage to several properties on the housing estate.
XYZ Ltd made a claim.
(a) Identify, with justification, two torts XYZ Ltd may have committed. (6)
(b) Explain, with justification, one defence available to XYZ Ltd in respect of one of the torts you have
identified in (a) above. Refer to one statute in support of your explanation. (4)
(c) Identify, with justification, two legal remedies that could be pursued by Richard. (4)
(d) Explain, with justification, the potential liability for XYZ Ltd with regards to the property damage
caused by the explosions. Refer to one relevent case in support of your explanation. (8)
(e) Explain, with justification, whether the insurer has any right of recovery against the sub-contractor. (8)
Sample Solution