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ryan_dolby-stevens_phFactual Background

Mr Renford Braganza worked as the Chief Engineer on an oil tanker managed by the Respondents. Some time between 1am and 7am on 11 May 2009, whilst the vessel was in the mid-North Atlantic, Mr Braganza tragically disappeared and has never been found.

Following an internal inquiry, BP identified six factors which were supportive of the conclusion that the most likely explanation for Mr Braganza’s disappearance was that he had committed suicide by jumping overboard. This had the consequence that Mr Braganza’s widow was not entitled to receive any compensation under Mr Braganza’s employment contract, which stipulated that death in service benefits would not be payable where “in the opinion of the Company or its insurers, the death… resulted from… the Officer’s wilful act, default or misconduct”.

Mrs Braganza accordingly brought a contractual claim against BP for the death in service benefits, along with a claim in negligence under the Fatal Accidents Act 1976 and the Law Reform (Miscellaneous Provisions) Act 1934.

Appellate History

Further detail regarding the decisions of the High Court and the Court of Appeal are set out in the Case Preview on this blog, but briefly they are as follows:

At first instance, the High Court allowed Mrs Braganza’s contractual claim on the basis that BP had not been reasonable when forming the opinion that it did. Teare J pointed out that the weight of evidence was not proportionate to the seriousness of the consequences of the finding and that BP had failed properly to take account of the possibility that Mr Braganza had been involved in an accident. The High Court rejected the claim in negligence (which was not appealed by Mrs Braganza).

BP brought an appeal in respect of the contractual claim to the Court of Appeal, which was unanimously allowed. The Court of Appeal disagreed with Teare J’s finding that Mr Sullivan of BP should have given himself “legal” directions and that a decision based on the ordinary language of probability was appropriate. The Court also held that BP’s report had been careful to consider the probability of an accident, and that the conclusion of the report was not unreasonable.

Mrs Braganza appealed to the Supreme Court, and the appeal was heard on 10 November 2014 by Lord Neuberger, Lady Hale, Lord Kerr, Lord Wilson and Lord Hodge. Judgment was given on 18 March 2015.

 Supreme Court Decision

The Supreme Court allowed the appeal by a majority of 3:2. The lead judgment was given by Lady Hale (with whom Lord Hodge and Lord Kerr agreed). A dissenting judgment was given by Lord Neuberger (with which Lord Wilson agreed).

The appeal principally concerned two inter-linked issues:

  1. The meaning of the general requirement that the decision of a contractual fact-finder must be a reasonable one; and
  1. The proper approach of a contractual fact-finder who is considering whether a person may have committed suicide.

Giving the majority judgment, Lady Hale stated that the standard required when reviewing a contractual decision is akin to that adopted for judicial review of administrative action, and held that the court will imply a contractual term into the contract that the decision making process be “lawful and rational in the public law sense” (paragraph 30), but that recourse should of course be had to the context of the particular contract. Additionally, the positive finding of a conclusion of suicide should be held to a higher evidential standard of inquiry than a simple finding that the cause of death could not be concluded on.

Mr Sullivan should not simply have accepted the view of the inquiry that suicide was the most likely explanation for Mr Braganza’s disappearance; to make a positive finding of suicide he had to direct himself that there was cogent evidence which was sufficient to overcome the inherent improbability of such a conclusion. Lady Hale commented that there were no positive indications of suicide and the six factors relied on in the report were “straws in the wind” (paragraph 40). It was therefore held that Teare J had been correct to find that the decision was unreasonable in the public law sense of having been formed without taking relevant matters into account.

Lord Neuberger agreed with the majority that the court should review the decision of a contractual fact-finder in the same way it reviews administrative decisions, and BP had to carry out their inquiry with “honesty, good faith, and genuineness” and had to avoid “arbitrariness, capriciousness, perversity and irrationality” (per Lord Neuberger at paragraph 104). However, on the facts of the present case, Lord Neuberger was satisfied that the investigation had been rigorously carried out:  “The two Reports are, as I have indicated, impressive both in the extent of the investigations on which they were based and the care with which they were compiled, and the conclusion they reached was carefully and rationally explained, and Mr Sullivan cannot be criticised for relying on them” (paragraph 126).

Comment

This decision will be of interest to all contractual fact-finders, and of particular relevance to employers and their insurers. Perhaps the most crucial point coming out of the Supreme Court’s decision is, per Lady Hale, that the less likely a given factual conclusion is, the larger the weight of evidence which will be required in order to support it.