Sunday 22 April 2018

Kingspan fails in €49m damages claim at UK court

John Mulligan

John Mulligan

INSULATION maker Kingspan, which has its headquarters in Co Cavan, has lost a UK court case in which it was seeking £40m (€49m) in damages from an Austrian chemical and plastics manufacturer.

Four units of Kingspan used a polyethylene called Borecene, produced by Borealis, to manufacture domestic oil and water tanks. Kingspan claimed product liability against Borealis after it was forced to replace units that had been installed.

Court documents indicate that Kingspan's subsidiaries had initially sought damages totalling £100m (€123m).

Kingspan claimed that a substantial number of the oil tanks manufactured using Borecene and which were supplied to it between 2002 and 2003 failed.

They had been overly susceptible to the effects of ultraviolet light due to the Borecene that had been used, it argued.

Tanks

Kingspan and its subsidiaries claimed that the tank failures were a consequence of breaches of the contract for the sale of Borecene to them.

The judge hearing the case said the parties involved had "swamped the court" with a vast amount of material that they had prepared over several years.

Justice Christopher Clarke, sitting in London's High Court, criticised Kingspan's submissions, commenting: "The inordinate size of the material and the scatter-gun approach adopted, particularly by the claimants, is an enemy to understanding."

The judge ruled against Kingspan. He said the company had not proved that Borecene was inherently more susceptible to ultraviolet degradation to a degree that would explain the increased failure of tanks made using the product.

He found that the failures were more likely caused by failures on behalf of Kingspan, including the use of angular-designed tanks, the "use on the shop floor of a thickness standard which was less than the design standard" and the "failure to optimise processing parameters in the light of the use of a new material with different characteristics".

Even if Kingspan had been entitled to recover damages, the liability of Borealis would have been limited to the Austrian group's invoiced price of the relevant material, he added.

Kingspan has already accounted for the cost of repairing the affected tanks.

"The earnings impact for the company is neutral as the costs have been provided for over a number of years," a spokesman said.

Irish Independent

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