The Peterborough-based company launched the High Court action against its brokers after a claim to insurers following the September 16, 2007 fire (see letsrecycle.com story) was rejected.
But, following an eight-day court hearing held in February 2010, Mr Justice David Steel last week (April 15) threw out environCom’s bid for £6 million in damages.
Lawyers for environCom argued that the brokers, Miles Smith, had been “negligent” when arranging insurance for the plant and that, as a result, key facts were not disclosed to insurers.
As a result, environCom’s insurance claim was knocked back, after insurers said they had not been told about the use of high-temperature plasma guns, which can reach temperatures up to 15,000 degrees centigrade, at the plant, and a March 15, 2007 fire.
At the High Court, Mr Justice Steel said that documents the brokers relied on to back up their case that they had explained things properly were “seriously inadequate”.
But he concluded that, even if the brokers had done all they should have done, the use of the plasma guns would probably not have been disclosed to insurers.
The judge did rule that the occurrence of a number of small fires would have been disclosed, but said that, as a result of such disclosures, environCom would have been unlikely to have obtained the insurance required to protect it.
Mr Justice Steel said the prospects of environCom obtaining cover were “purely speculative”, and despite the brokers’ “breach of duty”, the claim should be dismissed.
The court heard that environCom, established in 2002, was based in Houghton Road Industrial Estate, Grantham, when the huge September 2007 fire broke out. EnvironCom had moved there in June 2004
environCom used state-of-the-art equipment to recycle waste electrical and electronic equipment and turn it into plastics, metals and foam.
In March 2008, environCom secured a five-year deal with DSG International, the owner of 650 PC World and Currys stores nationwide, to handle all its WEEE recycling and reuse needs (see letsrecycle.com story).
And, since the blaze, the company has opened a new facility in Grantham, unveiling what it claims is the “UK’s largest” WEEE reprocessing plant in March 2010 (see letsrecycle.com story).
environCom had no comment to make at time of publication on the judge’s ruling.
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