Should reciprocal indemnities in shipbuilding contract be operative regardless of fault or qualified by exceptions?
In the shipbuilding and offshore industry, the risk of loss or damage to property, personal injury including fatal injury and disease are frequently allocated by means of "knock for knock" or reciprocal indemnity in the contract. Essentially, this means that respective parties undertake responsibility for loss or damage to their own property or for injury or death to their own employees and identified parties. Thus, in the case of Caledonia North Sea Limited v British Telecommunications Plc (Scotland) and others [2002] UKHL 4, Lord Bingham, commenting on the market practice to take account of the peculiar features of offshore operations, referred to an article on the standard practice during construction as described by Sharp, Offshore Oil and Gas Insurance (1994), p 108: "(iv) Injury or Death of Employees The position in respect of employers' liability is invariably dealt with by the exchange of mutual indemnities in respect of injuries to or deaths of employees. T...