Argos and Homebase can reclaim toxic sofa damages

Retailers Argos and Homebase have won a High Court battle to reclaim millions of pounds in compensation owed to customers who suffered health problems from a toxic chemical used to treat leather sofas.
The victims' claims were brought under a group litigation order, with Russell Jones & Walker acting as lead solicitor on behalf of 200 law firms (see solicitorsjournal.com, 4 May 2010).
The High Court heard last week that the retailers started buying leather sofas from China in 2004 or 2005.

Argos, Homebase and two other retailers, the Hampden Group and Argos Distributors (Ireland), told the court that they were liable to pay around £17m to people who suffered skin reactions and respiratory problems as a result of contact with an anti-mould chemical attached to the sofas and packaged in a sachet.

Delivering judgment in Argos and others v Leather Trade House (formerly BLC Leather Technology Centre) [2012] EWHC 1348 (QB), Mrs Justice Thirlwall said the retailers' claims were brought in contract and tort.

'They contend that as early as December 2005, in breach of contract and negligently, the defendants advised them that an anti-mould chemical contained in sachets attached to the furniture and in the packaging was safe, i.e not harmful to human health,' Thirlwall J said.

'Alternatively they claim that the defendant (again in breach of contract and negligently) failed over a prolonged period to alert them to the fact that the anti-mould chemical in the sachets was not safe. As a result, they claim, they permitted the sachets to be used by the suppliers of the furniture.

'The chemical in the sachets, Dimethyl Fumarate (DMF), was absorbed into the leather.

'Initial contact sensitised the skin which lead to a significant immune response at the next contact with the skin. This led to the injuries and consequent significant financial losses to the claimants.'

Thirlwall J said the third claimant, Hampden, had sustained only 'modest losses' and would not be pursuing its claim.

She said the defendant, referred to as BLC, denied a contractual relationship with any but the first claimant, Argos.

'It denies any breach of contract. It denies that it owed a duty of care at common law to any but the first claimant and it denies breach,' Thirlwall J said.

'It denies that any of its employees told the claimants that the chemical was safe or that it was not unsafe for use on the furniture, and if the claimants suffered loss as a result of their supply of the furniture it was as a result of their own negligence.'

The court heard that the anti-mould chemical, known as DMF, was a 'biocide' and heavily regulated by the EU.

Thirlwall J said she was satisfied that the defendant's contractual obligations extended to a review of packaging materials and methods to ensure that they were fit for purpose.

'Fitness for purpose plainly includes safety,' she said. 'There was a term of the contract and a duty at common law that the work would be carried out with reasonable care and skill.

'I add that there was no contractual relationship between the defendant and the second and fourth claimants.

'However, the relationship between the second claimant and the defendant was unchanged and for the same reasons as I articulated earlier I find that the defendant owed to the second claimant a duty of care at common law when carrying out this inspection and report.'

Thirlwall J concluded that Argos had proved breach of contract and breach of duty of care at common law and causation, and Homebase had proved breach of duty at common law and causation.

She said the third and fourth claimants had proved nothing.