The plaintiffs sought damages for economic loss and property damage after a fire broke out on an oil drilling rig.
The fire was caused by arcing in a heat trace system that ignited inflammable Thermaclad wrap.
The Supreme Court of Canada held that the manufacturer, Raychem, breached its duty to warn the rig owner of the product's inflammability and could not rely on the learned intermediary defence.
However, the builder, SJSL, was shielded from liability by an exclusion clause in its contract with the owner.
The Court declined to allow the rig's lessees to recover contractual relational economic loss due to policy concerns over indeterminate liability.
Finally, the Court abolished the common law maritime rule that contributory negligence acts as a complete bar to recovery, allowing the rig owner to recover 40% of its damages despite being 60% at fault.
